A new analysis by LeadingAge and the National Housing Trust examines how state finance agencies around the country prioritize affordable senior housing when allocating low-income housing tax credits.
The report reveals that seven states — California, Florida, Michigan, New Jersey, New York, Pennsylvania and Ohio — set aside a portion of their housing credits specifically for affordable senior housing. Although federal law requires that every state set aside 10% of its total allocation each year for projects sponsored by nonprofit organizations, individual states have the authority to establish other set-asides of their choosing. For example, in its 2020 qualified allocation plan, California established a goal of allocating 15% of its total credits to older adults.
The analysis also found that 27 states / jurisdictions, including the District of Columbia, award points to projects specifically serving older adults. Proposals earning the most points then are awarded the credits. It’s the most common way for states to incentivize senior housing in their qualified allocation plans.
In addition, three states — Arizona, Michigan, and Mississippi — provide a basis boost for projects serving older adults. A basis boost allows states to increase a property’s eligible basis, effectively increasing the amount of housing credits awarded to it. Although a basis boost will not increase a project’s likelihood of being awarded credits, it can increase a property’s financial feasibility, the report noted.
Housing credits, along with the Department of Housing and Urban Development programs such as the Section 202 Supportive Housing for the Elderly program, play a critical role in addressing the current and forthcoming lack of housing affordability for older adults, noted LeadingAge President and CEO Katie Smith Sloan, adding that the report is intended to serve as a resource for understanding the various ways states are working to ensure that older adults have access to affordable rental housing as they age.
“We hope this report helps stakeholders understand states’ use of housing credits, by far the largest annual federal expenditure for affordable housing, for seniors with low incomes,” Sloan said. “The shortage of homes affordable to older adults with low incomes is nationwide. Each state has a responsibility to use its affordable housing resources commensurate with current and projected needs.”