Many developers and operators see affordable senior housing as a strong area of potential growth in the future, but the sector is not without its challenges, writes National Real Estate Investor.
Citing $55.1 million provided recently by U.S. Bank toward the development by Retirement Housing Foundation of two affordable seniors housing properties near Los Angeles, which comprises both construction debt and Low-Income Housing Tax Credit, the publication outlines several success stories across the nation from California to Illinois. In spite of the successes, there is still some stigma attached to the concept of “affordable” in any property type, NREI writes.
“Across the country there’s still a stigma for “affordable” anything in a community, where neighbors and even civic leaders fight the “A” word at city council meetings and planning board hearings, even if it’s just the elderly who will live there,” according to the article.
“People have this perception that it’s this magnet for illegal activities, that they’re slums,” Chris Ragon, a director with Retirement Housing Foundation told NREI. “Well, our residents aren’t partying until 4 a.m. and throwing beer out the window. We enhance the community. At the property in Georgia, in Stone Mountain, the community did an investigation on us before we could build, but now they’re asking us to build another one.”
An additional obstacle is the government, which has faced funding cuts across programs that have historically supported affordable housing for seniors.
“With new tax-credit application requirements, trying to accomplish more with less, I think the smaller non-profit firms are going to have a hard time maintaining business,” Ragon told NREI. “We’re fortunate to have a strong reputation and relationships with lenders such as U.S. Bank, as today in this industry you need almost all the moon and stars aligned to get appropriate funding.”
Written by Elizabeth Ecker