Office of Multifamily Housing Programs U.S. Department of Housing and Urban Development

March 18, 2014

Section 202 Supportive Housing Program

for the Elderly

Growing Need for Section 202 Housing

Today, approximately 13 million low-income 50+ households in America cannot afford their housing costs and/or live in inadequate housing. [AARP]

1.45 million very-low income elderly renters paying more

than 50% of their income in rent and/or living in substandard housing. [HUD, Worst Case Housing Needs 2013]

550,000 extremely low-income elderly households with at least one disability paying more than 50% of their income in rent with 16,000 new households forming each year... [HUD,

Special Tabulation 2011 American Housing Survey]

Section 202 Program Purpose

For more than 50 years, the Section 202 program has expanded the supply of affordable supportive housing for very low-income elderly. • Funded 8,120 projects representing 390,700 units; • Supports 1,560 service coordinators around the country

connecting elderly residents to community based services. Residents are old, poor, and frail/at-risk. • Median income is $10,000 per year; • Median age is 76 years old; • 38% have one or more disabilities.

Funding Levels

Lowered Section 202 appropriations reflects broader fiscal environment. Even the 2010 highest levels couldn’t address demand and only produced about 3,500 new units. On average, properties have a waiting list of one year or longer Critical need to move to a new

funding model.

Appropriation Levels

Section 202

2003 $783 million

2004 $778 million

2005 $747 million

2006 $742 million

2007 $735 million

2008 $735 million

2009 $765 million

2010 $825 million

2011 $399 million

2012 $375 million

2013 $356 million

2014 $383 million

2015 $440 million

Budget Request for Fiscal Year 2015

$440 million for the Section 202 Program

• $350 million for Project Rental Assistance Contract (PRAC) renewals for 77,505 existing units.

• $70 million for Service Coordinators. This funding supported 1,560 existing service coordinators.

• $20 million for new awards of Elderly Project Rental Assistance (PRA) to support the funding of new affordable housing with services models for very low-income elderly to age in place.

Section 202 New Investments in FY2014

The Consolidated Appropriations Act, 2014 provided HUD the authority to use residual receipt and other available funds for a demonstration program to test housing with services models for the elderly that demonstrate the potential to delay or avoid the need for nursing home care.

• In FY 2014 HUD will issue an Elderly Project Rental

Assistance Demonstration Program (Section 202 PRA Demo) Notice of Funding Award (NOFA) to support affordable housing with services models

• Appropriations language provided broad authority allowing HUD to provide project rental assistance only.

Section 202 New Investments in FY2014

Elderly Project Rental Assistance (Section 202 PRA Demo) New Model for Section 202 Program Allows for: • Awarding of project rental assistance to serve larger number of

very-low income (VLI) elderly households.

• Funding levels of $20 million would make 3,400 new affordable units available compared to 190 new units under traditional Section 202 capital advance program.

• PRA only model covers debt service for certain construction cost and provides

operating subsidy for rents to be affordable to VLI elderly households.

• Flexibility to provide long-term rental assistance funding to leverage private capital.

Section 202 New Investments in FY2014

Elderly Project Rental Assistance (Section 202 PRA Demo) New Model for Section 202 Program:

• Allows properties to set-aside housing for elderly population that is older, poorer, and frailer than those who normally access housing subsidized through LIHTC and/or HOME.

• Strong emphasis on Service Coordination linked to community-based services.

• Conduct rigorous evaluation of the impact of 202 housing plus service model and demonstrate outcome.

Section 202 – Cost Effective Alternative

The annual housing assistance cost of a traditional Section 202 unit is $5,590. Adding in $14,660 for the annual cost of typical Medicaid home and community-based waiver services, provides for a total cost of housing, home care, and supportive services assistance of $20,250 per household.

• $17,720 less than the average cost paid by Medicaid for residents in assisted living facilities and $52,740 less than a nursing home alternative.

• If appropriately designed and targeted, $20 million would assist an

estimated 3,400 VLI elderly households and could provide a cost savings to State and federal Medicaid budgets as high as $179 million a year.

The Genworth 2012 Cost of Care Survey estimated the national average cost of nursing home at $73,000 a year for a semi private room. The cost of this type of facility

has been growing at 5 percent a year in the past 5 years. The 2010 National Survey of Residential Care Facilities found that 2 out of 10 residents in Assisted Living

Facilities are Medicaid beneficiaries. This represents approximately 97,000 people over 65 years of age, living in these facilities who are Medicaid beneficiaries. In 2010,

the mean national total monthly charge per resident for residential care was $3,165 (or $37,980 a year).

Section 202 – Cost Effective Alternative

Evidence-based housing with services models can significantly reduce Medicare expenditures on hospitalization and Emergency Room visits for people who:

• Have chronic conditions • Need support with Activities of Daily Living and/or Instrumental

Activities of Daily Living (IADL) • Eligible for Home and Community Based Services

Among this group, almost 2/3 of health expenditures were for inpatient stays, emergency room visits and prescription drugs and only 1/5 was for home health.

• Housing with service model can reduce these high health costs by allowing residents to age in place and facilitating the provision of supportive services.

Emerging Body of Research on

Housing with Services

• Supported by HUD and Department of Health and Human Services (HHS)

• Identifying “promising practices” and evaluating existing models of affordable housing paired with supportive services

• Identifying target populations: • Focus on elderly populations most at risk of institutionalization

hospitalization and emergency room utilization? • Other effective model?

Goals: • Increases in quality of life for residents • Reduce avoidable hospitalizations • Delay or prevent nursing home • Realize cost savings at the individual, state,

and federal levels.

Emerging Body of Research on

Housing with Services

“Enhancing Aging in Place for Older Adults: Design of a Demonstration Program of Housing with Services”, funded by HUD and HHS: • Lewin Group and Leading Age are analyzing effective models

of pairing affordable housing with supportive services that allow elderly to age in place to both improve quality of life and provide cost savings.

• Pilot testing administrative data matching between HUD and

CMS to identify the appropriate target populations and potential intervention.

Emerging Body of Research on

Housing with Services

“Evaluation of Vermont’s Support And Services at Home (SASH)”, funded by HUD and HHS: • Place-based community health team coordinates care and

long-term services and supports. • Focused on reducing unnecessary Medicare and Medicaid

expenditures: supporting hospital transitions, self-management coaching, and care coordination.

• Study compares Vermont elderly households to comparable households in New York, Massachusetts, and New Hampshire

• Will also compare SASH participants in HUD housing to individuals not in HUD housing.

Please watch our website for news and updates:

http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/mfh

/grants/section202ptl