Low Income Housing

Help with Finding Affordable Living Arrangements

According to the U.S. census bureau, one in three of all elderly households are struggling to get by. For those elderly poor paying rent or still paying mortgages the census bureau estimates well over 50% of household income goes towards housing costs. It's not surprising that at least 1/3 of all housing for the poor is occupied by people over age 65. Nationwide there are 2.9 million subsidized apartments available for 5.1 million low-income families that could qualify for government assistance with affordable housing. Many of these are elderly. Many others for various reasons do not apply.

The elderly frequently do not know about low income housing options and many are missing out on opportunities for comfortable housing at affordable prices. The best source for those over age 65 to find out about low income housing in their area is to contact their local Area Agency On Aging. This is an extremely valuable resource and should be utilized. There are about 655 AAA's serving every urban and rural corner of the United States.

HUD Section 202 and Section 811 Support Programs

In 2004, the department of Housing and Urban Development (HUD) made available $789 million in housing assistance grants to help the nation's very low-income elderly and people with disabilities. The grants include $643.6 million for the elderly under Section 202 and $145.6 million for people with disabilities, many of whom are elderly, under Section 801.

HUD's Section 202 program helps expand the supply of affordable housing with supportive services for the elderly. It provides very low-income elderly with options that allow them to live independently but in an environment that provides support activities such as cleaning, cooking, transportation, etc. HUD provides two forms of Section 202 funds for senior housing:

• Interest-free capital advances to private, nonprofit sponsors to finance the development of supportive housing for the elderly. The capital advance does not have to be repaid as long as the project serves very low-income elderly persons for 40 years.
• Project rental assistance funds provided to cover the difference between the HUD-approved operating cost for the project and the tenants' contribution towards rent. Project rental assistance contracts are approved initially for 5 years and are renewable based on the availability of funds.
• The available program funds for a fiscal year are allocated to HUD's local offices according to factors established by the Department.

Private nonprofit organizations can apply to develop a Section 202 project if they can, among other requirements, submit a resolution that they will provide a minimum capital investment equal to 0.5 percent of the HUD-approved capital advance, up to a maximum of $25,000 for national sponsors or $10,000 for other sponsors. Public entities are not eligible for funding under this program although in 2004 HUD amended its rules to allow private developers to share funds with the nonprofit and receive tax benefits. There are just too many nonprofit's that find it difficult to qualify for these funds and the money is being underutilized.

Occupancy in Section 202 housing is open to any very low-income household comprised of at least one person who is at least 62 years old at the time of initial occupancy. To be classified as "very low-income," a household income cannot exceed 50 percent of the area median income. Contact your local housing authority to determine eligibility. Low-income senior housing may be available in your area. The website of the US Department of Housing and Urban Development (HUD) can help you locate local HUD offices that can supply you with a list of low-income senior apartments in your area. Please be aware that waiting lists may be lengthy for such housing as it is in very high demand in most places.

Some Section 202 apartments have Section 8 Vouchers so that the tenant only pays 30% of his or her income for the rent. Section 8 rental subsidies are discussed below. Other Section 202 apartments may have set rents that are usually well below the rents charged by private apartments.

HUD's Section 811 program provides housing for households with one or more very low-income individuals, at least one of whom is at least 18 years old and has a disability, such as a physical or developmental disability or chronic mental illness. The term "person with disabilities" also includes two or more people with disabilities living together, and one or more persons with disabilities living with one or more live-in attendants. The program allows persons with disabilities to live independently in their communities by increasing the supply of rental housing with the availability of supportive services. Many of the elderly have disabilities and might qualify under this program.

To be classified as "very low-income," a household income cannot exceed 50 percent of the area median income. However, most households that receive Section 811 assistance have an income less than 30 percent of the area median. Generally, this means that a one-person household will have an annual income of about $12,075. Low-income senior housing may be available in your area. The website of the US Department of Housing and Urban Development (HUD) can help you locate local HUD offices that can supply you with a list of low-income senior apartments in your area. Please be aware that waiting lists may be lengthy for such housing as it is in very high demand in most places. The rental cost is typically 30% of one's income.

HUD provides the Section 811 funds to non-profits in two forms:

• Capital advances.This is money that covers the cost of developing the housing. It does not need to be repaid as long as the housing is available for at least 40 years for occupancy by very low-income people with disabilities.
• Project rental assistance. This is money that goes to each non-profit group to cover the difference between the residents' contributions toward rent and the cost of operating the project.

Section 8 Housing and Rent Subsidies

A form of subsidized housing grew in popularity in the early 1970s. Congress created the Section 8 housing program in 1974, including elements that allowed local authorities to subsidize housing rehabilitation, initiate new construction, and subsidize rents in existing private-market housing. Congress also authorized a rent subsidy voucher, issued to an eligible low-income family, which allows the family to search for and lease housing in the private rental market. Under this Section 8 Program-now known as the housing choice voucher program - the family pays 30% of its income toward the privately set rent, while the housing agency pays the difference, up to a certain "fair market rent" level, set by HUD. Property owners who honor these vouchers must allow the renter to receive assistance in an apartment for at least one year. Owners must also abide by HUD rental rules and submit periodic government paperwork.

Qualification for section 8 rental assistance follows the same rules outlined in the section above. Adjusted individual household income cannot exceed 50 percent of the area median income. Section 8 pays any rent which exceeds 30% of a tenants adjusted monthly income. For example, if your landlord charges $500 per month for rent and you make $1,000 per month, you would pay $300 (30% of your monthly income) and Section 8 would pay $200 (the difference between what you can afford and what your landlord charges).

The voucher program has continued to win broad support from policy makers who see it as an efficient, effective alternative to public housing. In 2001 the bipartisan Millennial Housing Commission called it the "linchpin" of federal housing policy. Today it serves about 1.9 million households in communities around the country and is a vital means of addressing the housing needs of low-income people.

The Section 8 program is also overburdened and it is getting difficult to get the subsidy. Many people now wait for years to receive the subsidy. And things are getting worse. In recent years the demand for this subsidy has outgrown available funds.

To add to this dilemma, much grant-based Section 8 housing was built in the seventies and eighties and the required twenty year commitment to the government to maintain subsidized rentals on these properties has expired. Property owners are converting subsidized projects at an alarming rate into market-based rental properties. This is further cutting back on the amount of available housing for the poor.

Local Government Housing Authorities and Subsidized Housing

State and local governments also provide money and tax incentives for affordable housing for the poor. In partnership with public, private and non-profit agencies, local government housing authorities develop and manage a continuum of affordable housing options from special needs housing to large apartment communities to elder housing.

Local housing owned and administered by a housing authority might be built by donated money, money generated through issuing municipal bonds, grants from the state or other sources of money. In addition, the authority might manage properties created through special tax incentives.

Housing authorities also administer Federal programs, including:

• Public housing. These are "the projects" which blight many cities. Now that they are recognized as a general failure, they are being slowly phased out. This program is of little interest to landlords as there is no way for them to participate, nor would many want to do so if they could.
• Privately owned subsidized housing consisting of privately owned buildings, subsidized directly by HUD, with a rent charged to the tenants which is set by HUD.
• Block grants. In this scheme, money is channeled through Washington to individual States and local governments, who administer programs tailored to their own needs, but approved by HUD. Such programs are growing in popularity because they permit politicians to fulfill the requirement that Federal money be spent as far away as possible from its source. Thus, money from Massachusetts is sent to California to fund housing programs while money from California is sent to Illinois, and from Illinois to New York, and so on. The true cost of the "Federal money," i.e., the cost of everybody else's program, is effectively concealed from the people of Massachusetts by this stratagem, that State's congressional delegation getting credit for the subsidy, without having to explain the cost.
• Section 8 funds. Already discussed in the previous section.

To find out what your local housing authority has to offer in the way of affordable elder housing contact your local Area Agency on Aging.

Energy Assistance and Weatherization

Federal funding through the Low Income Home Energy Assistance Act of 1981 provides funds to pay utility costs for low income families. Funds are provided through the Department Of Health And Human Services. Eligible families include households at or below 125 percent of federal poverty guidelines; and households who provide documented need (as determined through the application process). Once eligibility has been met priorities are given to:

• Roughly equivalent to extremely low- to very low-income households (0-60 percent of the area median family income);
• Elderly
• Disabled
• Families with small children or special health conditions.

Funds are also available for an emergency relief program during times of severe weather conditions. Eligibility is determined by proclamation of the president of the United States.

The Weatherization Assistance Program for Low Income Persons is designed to promote energy efficiency in the residences of low income Americans. The program provides for energy related improvements to homes, and educates consumers about energy conservation. Grants are made available through the Department of Health And Human Services. The program goal is to reduce the energy cost burden of low-income households through energy efficiency. The structure must be able to benefit from being weatherized. Qualifying households are those at or below 125 percent of federal poverty guidelines. Once qualified, priority is given to the following:

• Families at or below 125% of the federal poverty guideline.
• Roughly equivalent to extremely low- to very low-income households (0-60 percent of the area median family income).
• Households with small children (under the age of 6).
• Households with the highest energy cost and lowest income.
• Households with an elderly resident.
• Households with a disabled resident.

Once again, contacting your local Area Agency on Aging can put you in touch with this program in your area.