On Feb. 1, 2010, the Obama Administration released its proposed HUD budget for the fiscal year 2011. There’s some good news and some bad news for senior housing providers and AAHSA members. First the good news: The administration has heard our message – senior housing, specifically the section 202 program, should be the platform for the delivery of supportive services to allow seniors to age in place and to prevent premature entry into higher levels of care and repeat hospitalizations. The administration wants to allow project sponsors to build larger projects with greater economies of scale, to reduce regulatory barriers, and to improve service provision by encouraging partnerships with programs of HHS. The budget also provides $90 million for service coordinators and $183.7 million for the renewal of PRAC.
Now the bad news: The budget proposes the elimination of funding for new capital advances so that the program can be redesigned to ensure according that “future projects are more cost effective and well targeted.” However, all the problems that the budget cites that the reforms are supposed to correct – project delays, lack of effective mixed financing or leveraging, cost overruns, lengthy development times, the difficulty in developing housing with services, among others, can be addressed administratively, with changes in the HUD processing and the NOFA. There is only one change that requires legislation – the ability to build larger projects. The law now requires fair share distribution of units and dollars which leads to smaller projects in more places. AAHSA highlighted all these issues for HUD more than two years ago in a report about and analysis of the barriers to development of new 202s.
Last year HUD lauded the Section 202 program in a series of national events celebrating the program's 50th anniversary. In a 2008 report HUD supported the need for 10,000 new Section 202 units to be built annually to meet the growing demand. Despite the recent suggestion by officials that the Low Income Housing Tax Credit program could build senior projects faster and with more units, that program does not serve the lowest income seniors and is currently hampered by the lack of tax credit investors.
There is an old saying in Washington about the budget: “The President proposes, the Congress disposes.” So with your help and with your voices, AAHSA will take our message of support for funding the Section 202 capital advance program to Congress starting with the Future of Aging Services Conference Lobbying Day and through the appropriations season. We’ll kick off our campaign for funding the 202 program at FASC with new Contact Congress letters.
Please stay tuned. For more information contact Nancy Libson or Alayna Waldrum.