By Robert Carr
June 23, 2014
It’s a sure bet that the market-rate seniors housing pipeline will catch up to the retiring baby boom demand during the next two decades—supply usually follows abundant money—but what’s more uncertain is how the sector will fill the expected boom in need for affordable seniors living.
According to a recent housing survey from the MacArthur Foundation, more than 60 percent of respondents believe it will be very challenging for seniors to find affordable, quality housing when they need it. The survey was conducted in April by Hart Research Associates, with 1,355 adults and seniors contacted by phone. “The main message we gathered from this survey is that a majority of people don’t think the housing crisis is behind us,” says Rebecca Naser, senior vice president with Hart. “More than half of the respondents saying they had to make sacrifices to meet mortgage payments in the past three years. As they age, they believe it will get even tougher to find affordable housing.”
…The developers agree that cuts to state incentive programs, such as’s nixing of its Redevelopment Agencies, have severely limited the pipeline for new projects by spreading the gap for financing. Bruce Gerhart, a Midwest regional director for Love Funding, says while market-rate seniors housing demand is likely being met now, the gap for affordable housing is dangerous because of slowed funding from government subsidies. The 4 percent credits are in use, but more states need to take advantage of the program to avert a housing crisis, he says. “We’re now faced with receiving less subsidies but needing to build more properties,” Gerhart says.
His Washington, D.C.-based firm has made loans with incentives for affordable seniors housing projects all across the country. In Michigan, for example, Love closed a loan with a 9 percent low income housing tax credit for the 114-unit Lakeside Towers in Sterling Heights, a 4 percent tax credit loan for Canton Place in Canton and another 4 percent tax credit loan for the redevelopment of Presbyterian Villages of Michigan in Redford. However, he bemoans that even Michigan is cutting back on these incentives…
The above content includes excerpts from Carr’s article, “Incentives Dwindle as Affordable Seniors Housing Gap Widens.” Read the full article on NREI