California State Capitol in Sacramento. (Credit: slobo / Getty Images)

A bill expanding funding eligibility for state financing and funding programs to residential care facilities for the elderly could add more care and service options for older adults in California, according to senior living advocates.

The California Health Facilities Financing Authority Act, AB 839, provides loans for projects by participating health institutions, including construction, expansion, remodeling, renovation, furnishing or equipping or funding, financing or refinancing of a health facility. 

Under existing law, the CHFFA program now serves community care facility settings but does not recognize similar stand-alone residential care facilities for the elderly. Right now, only residential care facilities associated with skilled nursing facilities have access to the program. 

AB 839, which passed the California legislature and awaits the signature of Gov. Gavin Newsom (D), would correct that discrepancy, adding RCFEs to the definition of “health facility” under the program, according to the California Assisted Living Association. A CALA representative told McKnight’s Senior Living that the association supported the bill because it would expand funding eligibility for RCFEs to reduce borrowing costs and support affordable senior living communities.

“The bill is needed because the cost of developing new residential care settings for older adults or updating existing settings is significant and continues to rise,” CALA Senior Vice President of Public Policy and Public Affairs Heather Harrison said. “Our hope is that this legislation will increase the ability of providers to add even more care and service offerings for older adults in California and increase access to those options for seniors who desire to live in the least restrictive setting possible.”

LeadingAge California, which sponsored the bill, added that the legislation would reduce overall costs for older adults living in residential care facilities and increase the availability of assisted living options. 

“As the state’s older adult population continues to rapidly change and grow, the market is seeing a dual change in the long-term care environment for older adults — more and more skilled nursing providers are closing or right-sizing their facilities, shrinking the available stock of care facilities, while at the same time consumer preference is leaning toward aging in a residential or home-like environment,” LeadingAge California Vice President of Legislative Affairs Amber King told McKnight’s Senior Living. “This bill plays an important role in meeting the needs of this growing population through the creation of more nonprofit assisted living and memory care communities.”

The bill falls under the “housing for all ages and stages” goal in California’s Master Plan for Aging, the master play was released by Newsom in 2021, laying out a 10-year plan to prepare the state for an aging and changing population.