LeadingAge Magazine · May-June 2017 • Volume 07 • Number 03

Stewardship of Affordable Housing Must Be a LeadingAge Priority

May 16, 2017 | by Gene Mitchell

A conversation with Retirement Housing Foundation’s Laverne Joseph on why the HUD 202 program must be revitalized.

Stewardship, according to one definition, is “the responsible overseeing and protection of something considered worth caring for and preserving.” Providers of affordable senior housing wholly endorse that as their job description—something to be proud of.

Historically, the HUD 202 program—from the Department of Housing and Urban Development— helped build many senior housing communities, but in recent years funding cuts have halted construction of new units. LeadingAge’s new “Save HUD 202/Protect Affordable Housing for Older Adults” campaign is focused on securing full funding for HUD’s Section 202 Housing for the Elderly program, along with resources to create new affordable housing for older adults. The campaign, launched in May 2017, will extend through the fall of 2017. For more information visit the Save HUD 202 page at LeadingAge.org.

For perspective on the importance of the HUD 202 program, we spoke with Dr. Laverne Joseph, president and CEO of California-based Retirement Housing Foundation (RHF), one of the nation’s largest providers of affordable senior housing. Joseph has led RHF for 30 years and is a long-time champion of affordable housing for the nation’s older adults.

LeadingAge: Can you describe the significance of the HUD 202 program during your long career in senior housing? What problems has it solved and how has it enabled quality housing for low-income seniors?

Dr. Laverne Joseph
Dr. Laverne Joseph

Laverne Joseph: I’ve been CEO for RHF since 1987 and our involvement with HUD goes back to the 236 program and some of the earlier ones that later evolved into the HUD 202 program. At one time, the HUD 202 program was funding as many as 20,000 new apartments a year nationally. RHF has 185 communities today, and 102 of them were financed through the HUD 202 program.

Originally, this program funded [construction] and did not provide a [rental] subsidy. Later on, it provided the funding to construct the building, and then a subsidy so that residents would pay only 30% of their income, after a deduction for utilities if they paid utilities, and then also for health expenses. The balance was paid through a HUD subsidy, including a payment back to the government for the loan. Interest rates varied a lot and went up over 9% at one time. In essence, the government was paying itself back with interest through the subsidy program.

When I was chair of the housing committee at [LeadingAge], HUD said they could no longer afford to do that, so we suggested to them that instead of a loan for the money to build the structure, a loan that had to be serviced, they would provide funds for building the structure and the nonprofit would agree it would be kept affordable for a period of 40 years. If they did so, the original loan would go away. The result was that it reduced the subsidy considerably for the units.

As I said, at one point the HUD 202 program was funding 20,000 new apartments per year, but that has been reduced to the point that 6 years ago HUD said they would take a one-year hiatus, and that hiatus has continued for 6 years.

With 10,000 people a day turning 65 and many not having a whole lot of resources, the waiting lists for our properties, except in some small towns or rural areas, are horrific and in many cases they are closed.

“What’s at stake is the well-being of older adults in our nation.”

LeadingAge: Would RHF have been able to provide housing for so many people if there had not been such a program?

Laverne Joseph: Definitely not. When I came to RHF, we had as many as 17 properties in the pre-development stage. HUD was awarding vast numbers of units then. Some of these units were in small towns, so there might have been 19 or 20 units where there wasn’t as big a demand as in larger areas, where the size of the projects was considerably larger. In recent years, they’ve been about 30-50 units in size. In fact, we’re dedicating 2 new properties this week in Texas that have a few tax credit units in them to make them a little bigger. But definitely, there would not have been as many people taken care of if there had not been a HUD 202 program.

In the past, the Office of Management and Budget was always pressuring HUD to reduce its budget, but HUD knew the members of Congress loved the program because it meant new units in their districts. I testified about a dozen times before various Congressional committees about the HUD 202 program, and once when I was back there for a testimony, I went to a press conference that the former senator from Missouri, Kit Bond, was holding to talk about how the program was being funded again. He said that HUD had proposed cancelling the 202 new construction program, and the Senate, by a vote of something like 96-2, had reinstated and funded the program. [Bond] said, when you get a nonpartisan vote like that in the Senate, you know it’s not a matter of politics, it’s a matter of morals. A very strong statement.

At the LeadingAge [Annual Meeting & Expo, 2015] Boston, we raised a question about the 202 program to a HUD representative, who said, “Where is the outcry?” That’s what we’re trying to put in place with the Seniors Action Network. Think about the study that LeadingAge did last year, which showed that housing with service coordinators connecting people with services in the community reduces hospitalizations by 18%. The cost of a day or two in the hospital, running through all the tests, will cost you as much as an entire year’s [rental] subsidy.

The problem is that the expenses for the program are on the discretionary side of the budget, and the savings are on the health and human services side, which is nondiscretionary. We’ve got to get both of these departments working together so that we can provide housing with services for seniors because it’s only going to get worse.

LeadingAge: What is at stake if the program cannot be revitalized for the future?

Laverne Joseph: What’s at stake isn’t the well-being of sponsors like RHF, because there are other programs like the tax credit program, as long as it stays in place. The tax credit program is very valuable because it permits you to offer rents at 50-70% of what the market is, and that does serve some seniors and also low-income families. The issue is in the major cities, where a rent of 50-75% of market is not affordable for seniors getting $1,000 or $1,200 a month in Social Security income.

What’s at stake is the well-being of older adults in our nation.

"What this program does is not just provide for the well-being of persons, but saves the government money because it keeps them out of hospitals, which is much more expensive than providing them with good housing."

LeadingAge: Why is it so important to launch a campaign focused on the HUD 202 program now, and why should it be a priority for LeadingAge in particular?

Laverne Joseph: We need a strong advocacy program to get the attention of Congress, because with all of the financial pressures, it won’t happen without one.

Here’s a story from my past, when I was testifying before a Congressional committee: At the end of my testimony they had a Q&A. One person said, “Your comments about the HUD 202 program are really important, but tell us, where do we get the money?”

I said, first, I am not anti-military, but let’s put this in perspective. One B-1 bomber is all we’re asking for. They looked at each other and nodded their heads and smiled and we were funded.

We have to put the program into perspective and make strong statements. What this program does is not just provide for the well-being of persons, but saves the government money because it keeps them out of hospitals, which is much more expensive than providing them with good housing. It’s important that LeadingAge lead the program and that we raise our voices.

The rally coming up in June is important in getting members of Congress to address this issue. Unless there’s strong advocacy it won’t happen and LeadingAge is a leading advocate for affordable senior housing. There are others too, like the American Seniors Housing Association, and the Affordable Housing Network. We’ve all got to work together on that.

LeadingAge: What is your “ask” for other LeadingAge members? What can they do to help this campaign succeed?

Laverne Joseph: What I’d ask other members to do is to get as many people to DC, to the Capitol on June 27th, as you can, and secondly, ask residents, their families and staff to write letters 4 times a year to members of Congress to support the HUD 202 program. Give community stakeholders information on the latest policy and funding developments around the 202 program, and, if they want, the tools they need to communicate with Congress about what they’ve heard.

At RHF, because we were started by 2 United Church of Christ clergy and a layman, and are still are a recognized ministry of the UCC, we are planning to get our denomination involved in this program to get many more people corresponding with members of Congress.

Gene Mitchell is editor of LeadingAge magazine.