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89–741 PDF 2003

S. HRG. 107–985

THE PRELIMINARY FINDINGS OF THE

COMMISSION ON AFFORDABLE HOUSING AND

HEALTH FACILITY NEEDS FOR SENIORS

IN THE 21ST CENTURY

HEARING

BEFORE THE

COMMITTEE ON

BANKING, HOUSING, AND URBAN AFFAIRS

UNITED STATES SENATE

ONE HUNDRED SEVENTH CONGRESS

SECOND SESSION

ON

HOW WE CAN WORK BETTER TO MEET THE NEEDS OF A GROWING

SENIOR POPULATION IN THIS COUNTRY

JUNE 27, 2002

Printed for the use of the Committee on Banking, Housing, and Urban Affairs

(

COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS

PAUL S. SARBANES, Maryland, Chairman

CHRISTOPHER J. DODD, Connecticut

TIM JOHNSON, South Dakota

JACK REED, Rhode Island

CHARLES E. SCHUMER, New York

EVAN BAYH, Indiana

ZELL MILLER, Georgia

THOMAS R. CARPER, Delaware

DEBBIE STABENOW, Michigan

JON S. CORZINE, New Jersey

DANIEL K. AKAKA, Hawaii

PHIL GRAMM, Texas

RICHARD C. SHELBY, Alabama

ROBERT F. BENNETT, Utah

WAYNE ALLARD, Colorado

MICHAEL B. ENZI, Wyoming

CHUCK HAGEL, Nebraska

RICK SANTORUM, Pennsylvania

JIM BUNNING, Kentucky

MIKE CRAPO, Idaho

JOHN ENSIGN, Nevada

STEVEN B. HARRIS, Staff Director and Chief Counsel

WAYNE A. ABERNATHY, Republican Staff Director

MARTIN J. GRUENBERG, Senior Counsel

JENNIFER FOGEL-BUBLICK, Counsel

JONATHAN MILLER, Professional Staff Member

MARK A. CALABRIA, Republican Economist

SHERRY E. LITTLE, Republican Legislative Assistant

JOSEPH R. KOLINSKI, Chief Clerk and Computer Systems Administrator

GEORGE E. WHITTLE, Editor

(II)

CONTENTS

THURSDAY, JUNE 27, 2002

Page

Opening statement of Chairman Sarbanes ........................................................... 1

Opening statements, comments, or prepared statements of:

Senator Allard ................................................................................................... 2

Prepared statement ................................................................................... 18

Senator Reed ..................................................................................................... 2

Prepared statement ................................................................................... 18

Senator Corzine ................................................................................................ 18

WITNESSES

Ellen Feingold, Co-Chair, The Commission on Affordable Housing and Health

Facility Needs for Seniors in the 21st Century ................................................. 4

Prepared statement .......................................................................................... 19

John Erickson, Commissioner, The Commission on Affordable Housing and

Health Facility Needs for Seniors in the 21st Century; on behalf of Nancy

Hooks, Co-Chair ................................................................................................... 4

Prepared statement of Nancy Hooks .............................................................. 22

(III)

(1)

THE PRELIMINARY FINDINGS OF THE

COMMISSION ON AFFORDABLE HOUSING

AND HEALTH FACILITY NEEDS FOR

SENIORS IN THE 21ST CENTURY

THURSDAY, JUNE 27, 2002

U.S. SENATE,

COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS,

Washington, DC.

The Committee met at 10:18 a.m. in room SD–538 of the Dirksen

Senate Office Building, Senator Paul S. Sarbanes (Chairman of the

Committee) presiding.

STATEMENT OF CHAIRMAN PAUL S. SARBANES

Chairman SARBANES. The hearing will come to order.

I want to thank our witnesses, Ellen Feingold, who is the CoChair of the Commission on Affordable Housing and Health Facility Needs for Seniors in the 21st Century, and John Erickson, who

is a Commissioner, for appearing before us this morning.

Nancy Hooks, who is the Co-Chair with Ellen Feingold, was

scheduled to be here, but she had a family emergency and was not

able to be present.

John, we are most appreciative to you for your willingness to

step in on very short notice.

We are very much looking forward to hearing our witnesses on

how we can work better to meet the needs of a growing senior population in this country. In fact, as I understand it, by 2030, less

than three decades from now, the elderly population in America

will double to 70 million people, and it will then comprise 20 percent of our population.

Currently, the figure is 121⁄2 percent. So in 30 years, we will go

from 121⁄2 percent to 20 percent of our population being elderly.

In our work on this Committee, it has become apparent that

there is an affordable housing crisis, one that touches every part

of the country, every segment of society. In hearings that were held

earlier this year, we heard that the need for affordable housing

continues to grow with almost 13 million American families paying

over half their income toward rent. Working people are finding it

more and more difficult to afford a decent home for their families.

We have reviewed the general housing problems of Americans,

but we have not fully focused on the housing needs of this fastgrowing segment of our population, the elderly. For too many seniors, especially those who rent their homes or those living on fixed

incomes, decent and safe housing is not within reach.

2

There are currently six needy seniors for every available unit of

affordable senior housing. There are over 300,000 units of affordable senior housing at risk of being lost, and it is estimated that

35 percent of all seniors pay more than they can afford for housing.

As the Seniors Commission finds in its Report, the housing shortage will become worse in the coming years. The Commission referred to this as a ‘‘quiet crisis,’’ a crisis that has not yet come to

the public’s attention, but one that we cannot deny or ignore, and

of course, one purpose of this hearing is to help to bring it to the

public’s attention.

As we look ahead, as I indicated, in the not too distant future,

one out of every five Americans will be a senior citizen and we need

to begin to address new programs and services to meet their needs.

The Commission outlined the housing and health care needs they

would face, and given the current shortage of housing, it is clear

we must start preparing now to meet these needs.

I want to make this observation.

When we talk about the housing needs of elderly people, we are

not only discussing bricks and mortar, the physical structure, we

also need to address the necessary supportive services. Housing

and services are interrelated. In fact, the ability of an elderly person to remain in their home is frequently dependent upon the

availability of adequate services. Too often, the only options available to seniors are to remain in their homes, which are lacking the

necessary services, or move to restrictive institutionalized settings.

Not everyone is fortunate enough to have the kind of imaginative

and responsive lifestyle that John Erickson has developed with

great success in meeting this challenge.

When the Congress established the Commission on Affordable

Housing and Health Facility Needs for Seniors in the 21st Century,

that was established in the 2000 HUD/VA Appropriations Act. We

charged the Commission with conducting a study, and submitting

a report to Congress outlining the housing and health facility needs

of the elderly and making recommendations for how to best meet

these needs.

Originally, there was a deadline of this past December 31. This

was extended to June 30 of this year. In fact, we are almost there.

Mr. ERICKSON. To the edge.

Chairman SARBANES. With the data compiled by the Commission, we will have a better understanding of just how large a problem we face. I understand that the Commission will have both the

Majority and Minority Report, which, as I understand it, differ in

the extent of their recommendations.

But there is much common ground in the two statements. Both

ask us to continue pushing for greater funding of housing programs, to ensure that we maintain the housing supply and that we

have and expand the stock of affordable housing. Both seek better

coordination of Federal housing and health care programs. And the

Report will obviously reinforce the work that this Committee has

been doing on the affordable housing issue.

I look forward to hearing from our witnesses this morning on the

findings of the Commission and the ways that the Congress might

address their recommendations to make sure that our senior citizens can live a life of dignity.

3

These, after all, are the men and the women who have built the

strength of this country and it is only appropriate and, in fact,

meeting an important responsibility that in their senior years, they

be able to live in dignity.

I think these Reports will help us to counter this coming crisis.

Senator Reed and Senator Allard, who are the Chairman and

Ranking Member of the Subcommittee on Housing, have been conducting a series of hearings on this important question. Both have

had a very keen interest in the issue and I am delighted that both

are here with us this morning.

Since I go in this direction first, I will yield to Senator Allard,

and then to Senator Reed.

Senator Allard.

COMMENTS OF SENATOR WAYNE ALLARD

Senator ALLARD. Mr. Chairman, I understand we have a vote

about 10:50. Is that correct?

Chairman SARBANES. It is sometime shortly.

Senator ALLARD. Yes. So, I would just like to put my statement

in the record, so we can move forward and hear from the panel.

But I would also express appreciation for Rita Poundstone, who

works with the Colorado Housing and Finance Authority, serving

on this Commission. I have worked closely with the Colorado Housing and Finance Authority and think it is a great organization.

Chairman SARBANES. Thank you. Your full statement will be included in the record.

I say to the witnesses, that was a very gracious gesture on Senator Allard’s part.

[Laughter.]

Given the way things work around here.

Senator Reed.

COMMENTS OF SENATOR JACK REED

Senator REED. Thank you, Mr. Chairman. I will also graciously

ask that my statement be placed in the record.

[Laughter.]

Let me just quickly welcome Commissioner Feingold and Commissioner Erickson and thank them for their work and the fellow

Commissioners for their great work.

Our challenge is to preserve senior housing. It is to expand senior housing through increased production programs. And it is also

to ensure that the services are available. This is a particularly vital

issue in my home State of Rhode Island. We rank sixth in population of people age 65 years and older.

So these are critical issues for all of us, but particularly for my

home State. I look forward to working with Chairman Sarbanes

and Senator Allard, my colleague on the Subcommittee.

Thank you, Mr. Chairman.

Chairman SARBANES. Very good. Thank you, Senator Reed.

Now, we are ready to hear from the witnesses. And Ellen, as the

Co-Chair, I think we will turn to you first. If you want to take a

moment or two to introduce your fellow Commissioners that are

here with you today, we invite you to do that as well.

4

STATEMENT OF ELLEN FEINGOLD

CO-CHAIR, THE COMMISSION ON AFFORDABLE HOUSING

AND HEALTH FACILITY NEEDS FOR SENIORS

IN THE 21ST CENTURY

Ms. FEINGOLD. Thank you, Mr. Chairman. I would be very glad

to do that. And then after I have made the introductions, I would

like, with your consent, to ask Mr. John Erickson to present the

Majority Report.

It seems to me appropriate that the Majority Report come before

the Minority. But I will accept your invitation to introduce our

Commissioners.

Chairman SARBANES. Fine.

Ms. FEINGOLD. We have with us, starting at the end, Commissioner Baumgarten from——

Chairman SARBANES. Why don’t each of you stand as you are

introduced?

Ms. FEINGOLD. —the State of Oregon. We have Commissioner

Poundstone, whom Senator Allard introduced, from the State of

Colorado. We have Commissioner Sykes from Madison, Wisconsin.

We have Commissioner Thomas from Seattle, Washington. We

have Commissioner Protulis, who I think at the moment is from

Florida. Is that correct?

Mr. PROTULIS. Maryland. Maryland.

[Laughter.]

Ms. FEINGOLD. Maryland. Maryland.

[Laughter.]

Yes.

Mr. PROTULIS. And everybody else behind me is from Maryland.

[Laughter.]

Chairman SARBANES. Yes.

Ms. FEINGOLD. We have our Executive Director Gerard Holder

and our Associate Director Dina Elani. And I am very pleased to

introduce you to our principal consultant on the demographics of

this problem. This is Dr. Stephen Golant, from the University of

Florida.

We asked him to join us at the very last minute because we

thought you would probably have more serious questions about the

numbers than either John or I are expert about. Steve Golant is

here to be of help to all of you.

Now, with your consent, may I turn this over to Commissioner

John Erickson?

Chairman SARBANES. We would be very happy to hear from you,

Commissioner.

STATEMENT OF JOHN ERICKSON

COMMISSIONER, THE COMMISSION ON AFFORDABLE

HOUSING AND HEALTH FACILITY NEEDS FOR

SENIORS IN THE 21ST CENTURY

ON BEHALF OF NANCY HOOKS, CO-CHAIR

Mr. ERICKSON. Thank you very much, Chairman Sarbanes, and

Senators. I appreciate the opportunity to be here today, and for

holding this hearing.

5

As you said, I am John Erickson, and for the record, Chairman

of Erickson Retirement Communities, a Baltimore-based company

that is a national provider of senior housing.

As 14 Commissioners, with vastly different backgrounds and life

experiences, we brought a great deal of diversity of opinion to this

responsibility—and that diversity is a strength that has led us to

an array of thoughtful recommendations. Our Report offers over 40

specific recommendations and a wealth of new data to lay the

groundwork for the changes that are needed if we are to provide

Americans with the assurance that they will not be abandoned in

their later years.

Our Congressional mandate laid out extensive expectations, and

I am pleased to report on the vigorous effort that has been undertaken to meet them. Serving the seniors to come is a task requiring

considerable preparatory work—it cannot be handled overnight and ‘‘more money’’ is an oversimplified and inadequate solution.

The Seniors Commission has launched a nationwide dialogue on

senior housing, health care, and supportive service issues. We organized and conducted a series of coast-to-coast field hearings that

resulted in our exposure to an array of innovative thinking and

best practices.

At each of the five field hearings, we allocated time to allow seniors to address the Commission and we listened closely and were

moved deeply as seniors and their loved ones told us about their

own difficulties in housing and health challenges that they faced

every day.

As a result, the Commission learned that the needs of seniors are

quite diverse and that the ways in which these needs need to be

met are equally diverse. What works in some cities does not necessarily work in others or in rural or suburban communities. What

works for some seniors doesn’t for others, or is even unavailable altogether. We learned that many Government programs do not function collaboratively, and that their failure to do so imposes added

burdens on the very people that they hope to try and serve.

The Seniors Commission has highlighted America’s ‘‘quiet crisis’’—the senior housing and health care challenges we will face as

the Baby Boomer generation reaches retirement age. Today, as we

summarize our key findings, we call upon the Congress, the Administration, State and local governments, the private sector, nonprofits and faith-based organizations to recognize that senior housing and health services must become a national priority. President

Bush recently announced his progressive housing initiative to promote homeownership and to increase the supply of affordable

homes, and has demonstrated his leadership by identifying housing

as a national imperative.

The Commission’s Report contains data reflecting the present

needs of seniors, and allows us to predict the range of the future

need. Fortunately, all of the people that will be seniors using up

our health services are currently alive today, so we have a lot of

information about what to expect.

Right now, more than 80 percent of seniors own their own

homes. And of those, above the age of 50, almost 60 percent have

their homes free and clear. This pattern is likely to prevail, and in

the future, it might even extend to a greater condition. So, aware

6

of this, the Commission took a serious look at health policy, especially with regard to long-term care affordability, availability, and

accessibility. It is apparent that health policy, especially long-term

care, compels people to leave their homes in order to receive care,

favors an institutional settings and is often prohibitively expensive.

Therefore, the Commission recommends encouraging the provision

of Home- and Community-Based Services wherever possible.

In general, we expected Baby Boomers to begin their retirement

years in better financial position than their parents. They will, nevertheless, test the limits of our housing and health system. Even

if increasing incomes are assumed, large numbers of low-income

seniors will continue to require significant assistance, and many

middle-income seniors will find themselves on the precipice of

hardship due to unforeseen health or housing expenses that may

not be addressed by present policy.

The Commission heard one, consistent message—seniors wish to

age as best as they can in place, which may mean in a private

home, a congregate community environment, or another location of

their choosing. If it can be done safely and efficiently, it should be

done. Smart policy, providing the appropriate level of care and securing effective assistance in the home can avoid premature placement in institutional settings and save scarce resources for those

who truly need these extensive and costly levels of care.

The Senate Aging Committee has recently conducted 13 hearings, and if you extrapolate the current usage for long-term care

costs, it would ultimately absorb 75 percent of the total budget in

the year 2030.

So, obviously, we have to make some changes.

Modest assistance for home modifications or repairs can allow

seniors to remain in their homes, thereby reducing the need to

build additional, affordable rental housing. Furthermore, servicerelated assistance for seniors, once again, in the home, will allow

them to remain in the community, reducing the overall cost to taxpayers. In an institutional setting, for many seniors receiving Government assistance, the Government is not only paying for their

health services, but also for their housing. By subsidizing health

services in the home setting, substantial savings could be realized.

So providing home-based assistance allows seniors to maintain

their independence and their dignity, and we certainly encourage

you to make it available at every possible intersection.

Enactment of a shelter deduction will help the Home- and Community-Based Services gain parity with institutional settings, just

by changing the home from a liability in terms of qualifying for

assistance to an asset that reduces the overall cost of providing

services by removing the costs associated with this institutional

component. Currently, it works against seniors to stay home and

is qualified as income. But if it allowed them to have services, we

could take that as a deduction.

The Commission strongly recommends private-sector solutions.

We encourage Congress to provide incentives to purchase long-term

care insurance, to reduce the overwhelming out-of-pocket burden

on seniors, and the pressure on the public support systems. Deductibility of long-term care insurance should be a part of any tax

planning in the future.

7

I focused on our health recommendations since, as we delved into

these issues, the levels of frailty and the fragmentation of services

combined with a large number of senior homeowners of all incomes

indicates to us that perhaps health and health-related services are

an even wider problem than the lack of affordable housing. Clearly,

however, there are shortages of affordable housing and there is a

need for more of it. There is no doubt about that.

There is a need for such housing to be modified and constructed

with the needs of seniors in mind. Although the American Housing

Survey is, perhaps, the best data set available on housing, several

Commissioners identified serious flaws with that housing index,

and additional research using other data sets, especially on income,

serve to reinforce their concerns.

These, coupled with the Harvard Joint Center for Housing Studies’ projections of greatly increased senior homeownership and an

awareness that, in some communities, subsidized housing units remain vacant, raises a cautionary flag about proceeding too vigorously with housing production. What is clear is that shortages

exist, and in some communities, they are extremely serious.

Some key recommendations in our Report: The preservation,

modernization, and retrofitting of existing affordable senior housing—very important; expansion of all types of assisted housing programs in order to meet market demand; expansion of the role of

Government Sponsored Enterprises, GSE’s, in supporting senior

housing needs; encouragement of service-enriched, senior housing

developments by streamlining regulatory processes and by coordinating agencies that interface in the provision of housing and services at the Federal, State, and local levels; and finally, the redesign

of programs to reflect the real needs of individual seniors, while

providing enough flexibility to ensure that localities have the most

appropriate tools to meet local needs, rather than imposing a ‘‘onesize-fits-all’’ type of solution.

By moving in these directions, the needs of the growing senior

population can be met. To reiterate, our Report has more than 40

recommendations; it is a tool for change, a document that looks to

the future in a realistic manner. I encourage you to examine the

recommendations closely and to explore their implications and

their impacts.

On behalf of Nancy Hooks, I thank you for this experience and

the opportunity to participate in developing a comprehensive, bipartisan, and national policy statement on issues that we all care

so deeply about.

Thank you, Senator Sarbanes.

Chairman SARBANES. Thank you very much, John.

Those lights up there on the clock indicate that we are now more

than halfway through the time for the vote. That is why my colleagues have been leaving. So, I have to recess the hearing for a

few minutes while we go and vote, and then we will return and will

hear Ms. Feingold’s statement and have a question period.

The hearing stands in recess.

[Recess.]

Chairman SARBANES. The hearing will now resume and we will

hear from Ms. Feingold.

Ms. FEINGOLD. Thank you, Mr. Chairman.

8

For the record, I am Ellen Feingold. I am the Co-Chair of the

Commission on Affordable Housing and Health Facility Needs for

Seniors in the 21st Century. I am also the President of Jewish

Community Housing for the Elderly in Boston, which is a nonprofit

nonsectarian developer, owner, and manager of over 1,000 units of

Government-funded housing for low-income elderly.

It is relevant for this Commission that I am also a founder of an

organization called the Committee to End Elder Homelessness.

Every year in Boston, we do a census of elder homelessness. And

this year, there were over 400 seniors who were homeless in the

month of January in Boston. If you want to see the problem of lack

of housing for seniors writ large, look at seniors who have become

homeless.

I want to thank the Committee and especially thank Chairman

Sarbanes for inviting me and the rest of the Commission to testify

before you.

I also want to thank Congressman Barney Frank for the privilege of appointing me in concert with Senators Kerry and Mikulski,

and Congressman Mollohan.

This has been a rare opportunity for me, I appreciate it deeply.

When we were doing introductions before, I did not introduce you

to the people who represent those whose problems we have solved.

I would like to introduce you to about 60 seniors in this room who

are residents of Government-supported senior housing. Will you all

stand up?

[Applause.]

They are residents of housing which has been developed by the

Elderly Housing and Development Corporation of which Commissioner Protulis is the Director. Commissioner Protulis has made

sure that there have been seniors at every single one of our public

hearings. Some of them have testified before us, but many have sat

and listened and they have applauded our efforts because there is

nobody who understands the problems, and also the value of the

solutions, the way these people do.

I am thrilled that you are all here. Thank you so much.

I come before the Committee as someone who has dealt with the

problem of providing decent, supportive housing for elderly persons

for over 20 years. The average age of residents in my housing is

over 80, and their incomes average $10,000 a year or less. They are

very old. They are very poor. And they are increasingly frail. I

know first-hand how valuable the programs are that the Federal

Government provides for helping people to live decent lives.

In the Commission’s Report, you will find examples of how these

programs are used creatively, how they are blended together, how

we make a great stew out of some very disparate Government

products that were never designed to work together. But we also

know the inadequacy of the quantity of the resources we have.

My organization has 1,050 apartments. They are all occupied all

the time. We have no vacancy rate. And there are 1,800 people on

our waiting list.

The Section 202 program allocates around 150 to 175 apartments

per year to Massachusetts. I could use all of it for 10 years and I

still wouldn’t house my waiting list. We need resources desperately.

9

Every day, people call me and my staff pleading, desperate, looking for housing. They probably call your staff, Mr. Chairman, and

your staff probably calls me or people like me, saying, what can

you do for my boss’ constituent? My answer is nothing, for 6 years.

They have to get on the waiting list. And I wind up telling people

who are 80 that they have to wait 6 years for housing.

Now, Mr. Erickson referred to some places in the country that

have vacancies in subsidized housing. That is true. But it is the

rare exception, it is not the rule. The rule is massive waiting lists.

The rule is people who are desperate. And we come before you to

ask the Congress to really address this problem.

The question is, how much more do we need?

Dr. Stephen Golant prepared for the Commission a piece of

groundbreaking research which is in the Appendix to our Report,

which quantifies and puts together in one place the issues of need,

the issues of affordability, and the issues of housing condition and

accessibility.

Let me say at this point that the Minority of the Commission

supports wholeheartedly almost the entirety of the Majority Report. The specifics that Mr. Erickson laid out before are all specifics

that are important. Where we depart from the Majority is in quantifying for you the dimension of the need, the crisis of the need and

to plead with you to change priorities so that we can begin to meet

the need.

The Minority Report differs from the Majority Report in four crucial areas. Number one, increased housing production goals. Number two, using our resources first to meet the needs of the poorest

and the frailest. Number three, begin to make major changes in the

funding system for services to seniors. And number four, to deal

with the issue of the resources that solving this problem will take.

We have to start now. We were asked to look at the crisis in 20

years. We have to start now because the crisis is now.

Right now, there are 1.2 million Government-subsidized rental

units that house 1.3 million people. But there are 6.1 million very

low- and extremely low-income seniors who have priority housing

problems, who are not now living in assisted housing. That is 6.1

million. That, in a sense, is the gap.

Not all of those 6 million want to live in rent-assisted housing.

But if you figured that a quarter to a half of them do, then we are

looking at a gap of 11⁄2 to 3 million badly housed, very poor old people today. Not 20 years from now. Today.

Now if you project that to 2020, Dr. Golant tells us there will be

9.5 million very low-income and extremely low-income persons with

priority housing needs. That is 9.5 million. If you figure a quarter

to a half of them would move into rent-assisted housing, that

means we would need 2.4 million units over the next 17 years,

which translates to 140,000 units a year, if we are going to catch

up in 2020.

Supposing we looked just at renters. The largest number of seniors at all income levels are homeowners, but look at renters. There

are 2.4 million senior renters who are very low-income or extremely

low-income who are not in rent-assisted housing. Figure half of

them—because they are renters—might be willing to move, would

be overjoyed to move into rent-assisted housing. So today, that

10

number is 1.2 million. In 2020, if you look just at renters, the very

poor, very needy renters, there will be 3.2 million. If we were going

to house half of them, we would need to produce 94,000 units a

year.

It is in the context of those numbers that the Minority recommends strongly to you that the Congress begin now to authorize

60,000 units a year of housing for low-income seniors, either

through the Section 202 program or the Rural Housing Services

Section 515 program, or public housing programs, or the low-income units in tax credit properties.

We also recommend to you, to prevent falling back even further, $200 million now for the Affordable Housing Preservation Act, to

prevent the loss of some 300,000 senior units that are at risk

today.

There is no cheap way to do it. If you do it by tax credits, you

are spending tax money. If you do it by budget outlays, you are

spending appropriated money. But the wood and bricks and steel

and plumbers and electricians cost the same. There is no way of

getting around that building housing costs money.

With respect to supportive services, we echo virtually all of the

recommendations of the Majority. There are some additional recommendations in the Minority Report which are worth mentioning.

One of the problems one faces trying to put housing and services

programs together is they do not even talk the same language. If

you ask what is the eligibility for housing, it is calculated according

to Area Median Income. So it is very sensitive to regional variations, local variations.

If you ask if someone is eligible for Medicaid, that is based on

a national poverty figure. There are some parts of the country

where those numbers are similar and there are some parts of the

country where there are wide disparities.

In Massachusetts, you can have an income of twice the Medicaid

income ceiling and be eligible for assisted housing. This means that

we have many people living in subsidized housing who cannot access the services that they need.

We cannot even understand that problem until we start talking

the same language.

So one of our recommendations, a small one, is to change the language, change the terminology, and use the Area Median Income

for both health programs and housing programs.

The two most dramatic recommendations that we make to you

have to do with Medicaid and Medicare. Both of those programs

have done a terrific job at some of what they do.

Medicare, which dates from 1965, originally cover hospital

costs—what in 1965 we knew to be the normal, extraordinary

health needs of older people. We now acknowledge that today’s normal, extraordinary needs include prescription drugs. So, Congress

is preparing to add that coverage, which the entire Commission

supports.

The Commission’s Minority urges you to think seriously of adding long-term care service benefits to the Medicare program. It will

cost both the users and the Government additional money in the

short run, but Medicare has to become the long-term care insurance program for most Americans. We cannot pretend that only

11

hospitals and doctors are what elders need. These changes will reduce costlier and often unnecessary institutionalization.

The second major change we recommend to you is a change in

the Medicaid program, which at this time entitles poor people to

go to nursing homes.

When Mr. Erickson mentioned someone who lives in his or her

own home, but for lack of services, has to go to an institution, the

missing link there is that if that low-income person was eligible for

services under Medicaid, they wouldn’t have to go to a nursing

home where Medicaid will pay their bill.

There is a Medicaid Home- and Community-Based Waiver Program now. It has been very successful. Different States use it in

different ways. We recommend strongly to the Congress that the

days of waiver and special demonstrations are over, that the Homeand Community-Based Services be rolled into the Medicaid program as a central part of that program.

Finally, I would say to you that we recognize the costs of what

we are asking for. That the costs are huge. But this country has

resources. The question is, how are we going to allocate our resources? We allocate them in many ways that are beautiful and we

accomplish great things.

One of the things we have been enormously successful at is stimulating homeownership for people at all income levels. We have the

highest proportion of homeownership in the world in the United

States. And that costs us. There is a tax cost to the stimulation of

homeownership of $60 to $80 billion a year. We would like to see Congress think of what $60 to $80 billion

a year would do for the housing needs of low-income renters. We

would like to see parity. We would like to see poor people’s housing

supported at a level like that. We would like to see services for lowand moderate-income seniors supported at a level like that.

The program has succeeded. But it has left people behind. And

we would urge you strongly to think about how to raise funding for

low-income assisted housing up to a level that begins to meet today’s and tomorrow’s needs. We shouldn’t have our mothers and

our fathers and our grandparents risking homelessness and risking

institutionalization.

We urge you strongly to look at our recommendations and to do

what needs to be done so that seniors live in health and dignity

and safety.

Thank you.

Chairman SARBANES. Good. Thank you very much.

One of the things the Commission did was some very important

new research, and we very much appreciate a lot of this additional

material. I think it is going to be very helpful to us.

As I understand it, there are about 325,000 units of senior housing that are at risk of being lost to the affordable housing stock.

Ms. FEINGOLD. Correct.

Chairman SARBANES. Through the problem of opt-outs. Correct?

Ms. FEINGOLD. That is correct.

Chairman SARBANES. I was curious. Is this housing that was

originally designated for seniors, or are these units that now house

elderly families through the process of aging in place? Do you

know?

12

Ms. FEINGOLD. I do not know. I can guess, but I do not know.

I would guess that it is mostly age-segregated housing. But I do not

know the answer.

Chairman SARBANES. Does Dr. Golant know?

[Pause.]

Ms. FEINGOLD. It includes everything. But my guess is that it is

largely senior housing. We will get you the answer. You will have

the answer shortly.

Michael Bodaken, who researched preservation issues for the

Commission, included all HUD-subsidized elderly housing and all

other assisted multifamily housing in which 50 percent or more of

the households are age 62 and over. See Appendix G3, page 13, in

the Commission’s Report.

Chairman SARBANES. I would be interested in that figure.

Ms. FEINGOLD. Yes.

Chairman SARBANES. You said a tiny change to equalize where

you have to be financially to qualify for affordable housing and

where you are in order to qualify for Medicaid. As I understand

your recommendation, it was to move the Medicaid qualification

standard up to the Area Median Income, which would correspond

with the housing.

Ms. FEINGOLD. Correct.

Chairman SARBANES. Do you have any idea how much additional

that would cost in terms of Medicaid benefits?

Ms. FEINGOLD. We are not reaching that point. What we are saying to you is, if Medicaid eligibility were calculated using the

standard of Area Median Income, we would be able to see what

that means. Right now, we label the eligibilities by two totally different standards and we only know when the human being comes

in and says, I am eligible for this, but I am not eligible for that.

We do not know what it means.

We do know that in Boston, you are eligible for housing when

you are not eligible for services. There are other places where you

are eligible for services and not eligible for housing. So until we are

talking the same language, it becomes very difficult to deal with.

Chairman SARBANES. But we need some factual basis if you are

going to—— Ms. FEINGOLD. We are not changing the eligibility yet. Using the

same standards will provide you with the factual basis.

Chairman SARBANES. The same language.

Ms. FEINGOLD. That comes later.

Chairman SARBANES. Pardon?

Ms. FEINGOLD. That comes later. Let me put it this way. If the

Area Median Income, say, is $50,000, so 50 percent of the Area Median Income is $25,000, that is the HUD eligibility ceiling. Perhaps

the Medicaid eligibility ceiling is $10,000. There is a huge gap. We

are not saying yet, fill the gap. We are just saying, at least talk

the same language so that people——

Chairman SARBANES. I am just trying to find out some figure as

to the cost if you were to talk the same language. That is all.

You are advocating talking the same language. And an important

factor in judging that, presumably, amongst other things, is what

the cost would be.

Ms. FEINGOLD. Only if you then changed the eligibility. Right?

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Chairman SARBANES. That is the only way you could talk the

same language.

Ms. FEINGOLD. No, no. Right now, if you have decided in your State that the Medicaid eligibility threshold is $10,000, and you define it as 100 percent of poverty, you could also describe it as 20

percent of the Area Median Income. The same number of dollars

could be described as 20 percent of Area Median Income or 100 percent of poverty.

Chairman SARBANES. So, then, what follows from that?

Ms. FEINGOLD. What would follow is one would look at it and

say, well, what makes sense? And you could then decide that it

doesn’t make sense to go much above that, or one could decide it

should go up 10 or 20 percent, and then one could cost it out. Just

changing the vocabulary doesn’t change the money.

Chairman SARBANES. What is the purpose of changing the vocabulary if it is not going to change the money?

Ms. FEINGOLD. So that the person who works for me and has to

recertify the housing eligibility of our tenants every year, also

knows without calling somebody else up in another agency who is

eligible for what.

HUD housing uses Area Median Income as a standard. And if

people’s eligibility for services were based on Area Median Income,

we would know who in our buildings was eligible for what. We

would not have to have them certified for eligibility by another

agency.

Chairman SARBANES. So, you all talk about predatory lending.

Abusive lending practices I think is the phrase that is used in the

Report, targeting seniors. This is an issue in which this Committee

has taken a keen interest. And we found in a series of hearings

that elderly homeowners are particular targets of predatory lending, often because they have accumulated a lot of equity in the

course of their lifetime.

What did the Commission find in its hearings and research regarding abusive lending practices?

Ms. FEINGOLD. John, do you want to take that?

Mr. ERICKSON. We found that the large entities like Fannie Mae

and the rest have actually developed very comprehensive programs

and they have been pretty good at policing to see that there are

no predatory practices.

Certainly in the small, less national policies, you could still have

some abuse. But the reverse mortgage program is much more detailed and spelled out so that seniors know what they are getting

into if they are using mortgages at a late time in life to finance

their health costs or some of their ability to stay at home.

So the disclosure policies have gotten much stronger. It is an

area that we did not find widespread abuse, but it was one of the

areas that did come up and we said that we should be particularly

cautious about making sure seniors are not targeted because they

do not have any earnings capacity if they do make a bad mistake.

Chairman SARBANES. Well, the AARP, of course, has taken a

keen interest in this issue and we have been trying to work closely

with them on it.

We have found evidence of repeated exploitation of the elderly,

which results in the equity being literally stripped away from them

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through excessive fees, repeated refinancing, single-premium credit

insurance that is built in, things of that sort. In fact, some of the

more responsible lenders in the field have now ruled out some of

these practices, which is a real step forward and an encouraging

development. We have some legislation in that we want to take a

look at.

But there are some very sharp and fast operators who just really

make victims out of the elderly, and the elderly seem to be one of

their target groups for exploiting. We are quite concerned about

that issue.

How much work did you do on the question of senior housing in

public housing?

Ms. FEINGOLD. The largest number of low-income people living in

Government-assisted housing live in public housing. And we are

very concerned about that group.

The Minority Report stresses the need for moving services into

public housing, for the ability to renovate and retrofit public housing so that it can do a better job of housing seniors.

I do not believe we heard a great deal of testimony, but it was

very clear in looking at the data that we saw. We also have among

our Commissioners Mr. Thomas, who is the Director of the Seattle,

Washington, public housing authority and very active nationally in

housing authority organizations. He brought us a lot of the information about this.

It is a serious problem and our recommendations are that we

reestablish public housing production programs for seniors. We recommend that, contingent on a large increase in Section 202 authorization, public housing authorities be made eligible to use those

funds. We do not recommend this change if funding remains at today’s limited levels because there is a large community of developers, nonprofit sponsors who make very good use of the Section

202 program.

But this is a program that really works, and when we get enough

of it out on the street, we think that public housing authorities who

exist in some 3,400 communities around the country are wellplaced to become developers of senior housing using that program.

Chairman SARBANES. Does the Commission have a view on

whether housing for the elderly should be, to what extent it should

be for the elderly and to what extent the elderly should be in an

affordable housing complex which embraces the nonelderly as well?

Ms. FEINGOLD. I think the watchword of the Commission was

choice. These are not mutually exclusive. There are some elderly

who want to live in seniors-only housing. There are some elders

who love living in a mixed-age community or a mixed-income community. The need is enormous. We should meet it in every way we

possibly can.

Chairman SARBANES. In the public housing reform bill we did

just a couple of years ago, there was an effort to move toward

greater diversity of income of the tenants.

Now this runs counter to the proposition that you should take

care of the poorest first because it means you would have people

in the affordable housing context who were not at the very bottom

of the income scale.

15

The argument that was made on its behalf was that a better mix

community in income terms—we are still talking about low-income

people. It is a question of whether you are talking about just the

very lowest or whether it is a mix in a somewhat broader context.

The argument was that that more diversified community would

be more stable, that you would have leadership models that would

be present in the community and that would therefore have an impact on a more stable housing environment.

There are good arguments in both directions, I think. But does

the same issue arise with respect to senior housing, as you see it?

Ms. FEINGOLD. Most of my buildings are 100 percent low income.

I have one building that is 15 percent market.

Chairman SARBANES. Let’s not go there. I mean, let’s not go to

market.

Ms. FEINGOLD. Market is pretty low. It is just not as low as low.

Chairman SARBANES. When you say low income, do you take the

lowest income first?

Ms. FEINGOLD. We are required to take a certain proportion of

our tenants with 30 percent of median income.

Chairman SARBANES. Right.

Ms. FEINGOLD. We have the same——

Chairman SARBANES. Presumably, all of your tenants could be at

30 percent of median income.

Ms. FEINGOLD. Absolutely.

Chairman SARBANES. All right. Well, why don’t you do that? Why

don’t you take the very poorest first?

Ms. FEINGOLD. Well, if you are asking me literally, because I am

governed by rules that say that I have to take people in chronological order that they get on my waiting list. In fact——

Chairman SARBANES. Do you think that you should take——

Ms. FEINGOLD. —most of our tenants are at 30 percent. I mean,

that is why we have tenants whose median income is $10,000 a

year. Most of our tenants are extremely low income.

Chairman SARBANES. Do you think that in some way weakens

the ability to have a stable housing environment as opposed to having more of a mix of income?

Ms. FEINGOLD. In senior housing, I do not think that this is as

much of a problem as it is in family housing.

Again, this is an area where I do not see a need to choose. I do

not see a need to say, it all must be mixed income or it all must

be very low income. My experience is that both work.

The bottom line is an issue of need and how vast the need is.

Whatever way we go about meeting the need is what we need to

do. And to get hung up on which is the best way when both are

good, I think is not productive.

Chairman SARBANES. I don’t really quarrel with that, and I am

one who is strongly committed to trying to get more resources into

affordable housing.

Ms. FEINGOLD. Good.

Chairman SARBANES. But as long as the resources fall well short

of the need, the kind of questions I have just been putting are

going to continue to come to the fore.

Ms. FEINGOLD. I know.

16

Chairman SARBANES. And that is why I was really trying to explore your thinking on that part.

How are we going to coordinate the housing needs and the health

care needs? What are the prime recommendations you would make

in order to accomplish that objective?

Ms. FEINGOLD. Well, we come down very strongly, both the Majority and the Minority Report come down very strongly on the

value of service coordination. Service coordinators are people who

are staff in senior housing who know the resources in the community. For years, I have been hiring them, calling them brokers.

They link users with resources. That works on the ground.

We would like to create programs that work, so that it is not constantly an exercise in creativity to make it work.

In the State of Massachusetts, we have a number of both Statefunded and Federally-funded service programs which service coordinators link. In some cases, we can run an entire program in a

housing building. But in many cases, you have to do it person-byperson-by-person.

In our Report, as I say, we come down strongly on the need for

service coordinators who become expert in what is available in

their areas and how to assess people for their needs and link them

with services.

We are also recommending in the Minority Report a program

that would enable housing sponsors to access both service money

and HUD housing money in one application.

We are suggesting to you that an allocation from HHS, from

DOT, from the Administration on Aging—that there be funds appropriated to those agencies and then provided to HUD, so that if

I come in applying for funding to build a supportive housing development, I go to HUD and I say, I need X-number of dollars to build

it. I need Y-number of dollars to subsidize the rents. I need Z-number of dollars to run transportation. I need V-number of dollars to

run a meal site.

These are all pieces of funding money that currently come from

different agencies. If a piece of money was coming from the agency

to HUD so that a single application from a sponsor could access

those funds, you would go a long way to making it easy for housers

to see that their residents are getting the services that they need.

Look, the bottom line is we have a Government structure that

separates functions. The silo term has become old hat. When I was

first appointed to this Commission, I thought, great, we are going

to figure out a way to punch holes in the silos. I had to give up

on that.

What we are looking for now are the small ways in which we can

make the silos work for us rather than creating constant barriers.

And one way is to have these pots of money that all go to a coherent program that is administered through HUD, using the same

standards each program establishes. For example, the recipients of

services would still have to qualify for Medicaid.

The housing sponsor who is getting this piece of Medicaid funding which is coming from HHS to HUD to the housing sponsor will

still have to follow the rules that govern that money. But the

money will come to one place in one application. You will make it

immensely easier to carry out the coordination of housing and servVerDate 11-MAY-2000 16:08 Oct 09, 2003 Jkt 000000 PO 00000 Frm 00020 Fmt 6633 Sfmt 6633 89741.TXT SBANK4 PsN: SBANK4
17

ices that you are interested in. So, we are recommending that you

do a demonstration program of this kind.

Mr. ERICKSON. Senator.

Chairman SARBANES. Yes, John.

Mr. ERICKSON. This is even more important for the 96 percent

of seniors that are not in public housing that are either in private

rental, or whatever.

If you look at the vast majority, that 96 percent that are in other

forms of housing, the ability to begin demonstration programs that

would capitate Medicare payments and do earlier interventions

would have a huge impact. The ability to have primary care at an

early point instead of urgent care in hospitals, would shift dollars

and make seniors have a much higher quality of life.

Currently, capitation rules are limited under Medicare by an entire county instead of by groups.

And so, we recommended being able to break that down into

much smaller entities, even a thousand seniors at a time, to say,

you put in a full-service program under capitation and try and cost

this and see if you can do a better delivery service and move from

acute care and institutional care to home and community care.

Chairman SARBANES. Well, this has been an extremely helpful

panel and we very much appreciate the Commission’s work and the

Report, which is about to be published, I guess.

When will it be published?

Mr. ERICKSON. We submit tomorrow and it should be printed

over the weekend.

Chairman SARBANES. I thank not only the two of you, but also

all of the Commissioners and the staff for the contributions they

have made. I think that it is going to contribute significantly to the

dialogue as we try to meet this challenge, which I think is an extremely important one.

Ms. FEINGOLD. Thank you so much, Chairman Sarbanes. I would

like to offer to the Committee staff who are here the time of Dr.

Golant, who is here for a little while longer. And those of you who

have questions about the research, he is available to you now.

Chairman SARBANES. Yes. We appreciate that very much.

Mr. ERICKSON. Thank you, Senator Sarbanes.

Chairman SARBANES. The hearing stands adjourned.

[Whereupon, at 11:50 a.m., the hearing was adjourned.]

[Prepared statements supplied for the record follow:]

18

PREPARED STATEMENT OF SENATOR WAYNE ALLARD

I want to thank the Chairman for holding this hearing. I appreciate the opportunity to hear a preview of the Commission’s Report today.

In 1999, Congress created the Commission on Affordable Housing and Health Facility Needs for Seniors in the 21st Century. I was pleased to be able to help select

some of the Commissioners. I was particularly pleased to nominate Rita Poundstone

to serve as a Commissioner. Rita works at the Colorado Housing and Finance Authority, an organization I have worked with closely over the years.

Over the past 2 years, the Commission has held hearings and public forums all

over the country, commissioned the collection of data and compiled data on housing

and services for seniors, and created a set of recommendations for Congress. We are

here today to hear these recommendations which will help Congress address the

needs of this increasing population of seniors in our country over the next decades.

Over the years, the Congress has enacted some very strong and effective housing

programs, such as the Low-Income Housing Tax Credit and Section 8 Voucher programs. These, and other programs, meet the housing needs of many Americans, including seniors. I am interested to hear from the Commissioners and to read in the

final Commission Report suggestions for continuing to met the needs of seniors in

our country.

Thank you, Mr. Chairman.

—————

PREPARED STATEMENT OF SENATOR JACK REED

Mr. Chairman, thank you for holding this hearing today.

We are happy that Co-Chairman Feingold and Commissioner Erickson of the Seniors Commission are here today to talk about such an important issue—the housing

and health facility needs of our Nation’s elderly. We are looking forward to hearing

your recommendations about how to address these needs.

This is an issue near and dear to my heart. In my own State of Rhode Island,

almost one-fifth of our residents are over the age of 60. Approximately 10 percent

of Rhode Island’s seniors are currently living in subsidized housing and many more

are currently on the waiting lists for such housing.

About 31 percent of Rhode Island’s seniors are paying more than 40 percent of

their income toward their housing. For those over the age of 75, 36 percent are paying over 40 percent for their housing.

As the Commissioners are going to testify today, not only do we need to start

building more units of affordable housing for the Baby Boomers that are beginning

to enter their senior years, but we also need to work together to preserve existing

affordable housing for seniors.

I believe this is one of the most important issues before the Congress at the moment—how we can preserve our existing senior housing stock without losing more

of it to market forces. In my own State, approximately 11 percent of Rhode Island’s

affordable senior housing is currently in danger of being lost to the market.

In addition to struggling with the affordable housing issues, many seniors are

struggling to obtain health care services. As our seniors live longer, they are having

a harder time meeting their long-term health care needs, even when they are Medicare eligible.

We clearly have a problem. I look forward to the Commission’s advice and recommendations regarding how the Government can help promote, encourage, and if

necessary, create elderly housing with services for some of our Nation’s most vulnerable citizens.

Most seniors want to remain in their own homes as long as possible. This is not

only the best choice for them, it is also the best choice for the American taxpayer.

—————

PREPARED STATEMENT OF SENATOR JON S. CORZINE

Mr. Chairman, I am very pleased that the Committee is holding this important

and timely hearing today to discuss what is a growing crisis in our country—the

crisis in long-term care. As we will hear from the Commission’s Co-Chairs, our country not only faces a long-term health care crisis, but also a long-term housing crisis.

Indeed, as the Commission’s preliminary findings show, housing and health needs

for our Nation’s seniors are inextricably linked. We cannot adequately address the

health needs of our Nation’s growing elderly population without providing them

access to affordable housing.

19

In the next 30 years, the senior population will grow to more than 20 percent of

the U.S. population. Currently, 20 percent of seniors have significant long-term care

needs, and as our population lives longer this number will only increase. Low-income families nationwide face severe housing problems, particularly in New Jersey

where rental costs are among the highest in the Nation. But, seniors, particularly

elderly women who generally outlive their spouses and are more likely to live alone,

face especially complex housing problems. Fifty-seven percent of seniors who rent

pay more than 30 percent of their income for housing and are likely to have significant health care needs.

Eighteen percent of seniors need assistance with at least one daily activity, such

as bathing or cooking. Too many of these seniors, however, lack access to the

support services they need to help them ‘‘age in place.’’ As a result of a shortage

of supportive housing and limited access to community-based services, too many of

our seniors have been institutionalized, a measure that is both costly and sometimes

unnecessary.

While most States provide access to certain home-based care services for elderly

Medicaid recipients, these services are not guaranteed and are only available to very

low-income seniors. Forty percent of our senior population has an income below 50

percent of the Area Median Income. Yet many of these seniors are not Medicaid

eligible, and are too poor to pay for home care services or assisted living. And, for

those who are eligible for Federally-subsidized supportive housing, there is too often

a long waiting list.

Nationally, for every one senior living in subsidized housing, there are an additional six seniors on waiting lists for such housing. In New Jersey, there are nine

applicants for every one available Section 202 unit. According to the Commission’s

preliminary findings, in order to keep pace with this 6 to 1 ratio, we will need to

create an additional 730,000 additional rent-assisted units by 2020. And that is

what we need just to maintain the status quo. The need for affordable housing production cannot be understated. There are currently 1.4 million elderly households

that are currently eligible for Federally-subsidized housing but are not receiving it.

Mr. Chairman, we have a crisis in this country today that will only continue to

worsen. As the Commission’s findings demonstrate, the puzzle of meeting seniors’

housing and health care needs requires not only creative solutions, but will also require a significant investment in the production of affordable and supportive housing that will enable our seniors to age with dignity.

Thank you, Mr. Chairman. I look forward to hearing from our panel.

—————

PREPARED STATEMENT OF ELLEN FEINGOLD

CO-CHAIR, COMMISSION ON AFFORDABLE HOUSING AND HEALTH FACILITY NEEDS

FOR SENIORS IN THE 21ST CENTURY

JUNE 27, 2002

I am Ellen Feingold, Co-Chair of the Commission on Affordable Housing and

Health Facility Needs for Seniors in the 21st Century and also President of Jewish

Community Housing for the Elderly, a nonprofit nonsectarian developer, owner, and

manager of over 1,000 units of Government-funded housing for low-income elders

in the Boston area.

I want to thank the Committee and especially Chairman Sarbanes for inviting me

and my Co-Chair Nancy Hooks to testify before you today. I also want to take this

opportunity to thank Congressman Barney Frank who, together with Senators John

Kerry and Barbara Mikulski and Congressman Alan Mollohan gave me the great

honor of serving on this Commission and the opportunity to work with my fellow

Commissioners toward ensuring that our Nation’s elders are well-housed and have

the health and supportive services they need as we move through the 21st century.

I come before you as someone who has dealt with the problem of providing decent

supportive housing for elderly persons every day for over 20 years. JCHE’s residents’ average age is over 80, and their incomes average around $10,000 a year.

They are very old, very poor, and increasingly frail. I know first-hand how valuable

the tools are that the Federal Government has given us to work with, and in the

Commission’s Report we describe the ways these tools are being used innovatively

to create housing environments in which people can grow old safely, with dignity,

and with the supports they need to be as independent as possible.

But we also know how inadequate the quantity of resources we have are NOW.

My organization has 1,050 apartments, all occupied all the time, and 1,800 people

on our waiting list at any one time. Every day, people call me and my staff, pleading

20

for housing for themselves or their family members. Often, your staff call me and

my colleagues in your States on behalf of your constituents who are frantic with

worry and need. The Commission Report has numbers and statistics describing

what has become a crisis; but I hear the need from desperate seniors first-hand, as

do you. What do you tell them? I have to tell them it will take years before there

will be a JCHE apartment for them. Can you imagine telling an 80-year-old that

they will have to wait 6 years for an apartment? This need for decent, supportive,

affordable housing is not an abstract issue. These are real people, our own parents

and grandparents, and their need is critical and urgent.

The Commission heard this story over and over—and we heard how very grateful

seniors who live in Government-assisted housing are for their quality affordable

housing, and we heard over and over that what is needed is MORE.

The Commission is presenting to you a piece of groundbreaking research, in which

Dr. Stephen Golant of the University of Florida quantified today’s housing need, and

projected this need in 2020. In Part III of the Commission Report, Key Findings and

Projections, you will find a summary of his work, and his analysis of the need and

the full report is in the Appendix. Dr. Golant found that, for every rent-assisted unit

currently occupied by a senior, there are almost six seniors with housing problems— either due to affordability, or poor conditions, or other problems—who cannot access

decent, affordable housing.

The Commission’s Minority supports most of the Commission Report—its findings

and many of its recommendations.

This Minority Report goes beyond the Majority Report in calling for greatly increased housing production goals, for using our resources first to meet the needs of

the poorest and frailest seniors, for major changes in the systems for providing and

funding services to seniors, and for a commitment to providing the major increase

in funding that these changes will require. We believe that the only way that our Nation can meet the anticipated crisis in supply is by starting NOW to meet today’s

huge need.

Just how great is the need? Looking at Dr. Golant’s Exhibit I (Part III, page 3),

you will see that there are currently 1.2 million Government-subsidized rental units

housing 1.3 million seniors. Exhibit 8 (Part III, page 9) shows that there are currently 6.1 million very low- and extremely low-income seniors with priority housing

problems who are NOT living in those 1.2 million units. In other words, today’s gap

is 6.1 million units. Even assuming that only one-half or one-third or even one-quarter of those 6.1 million urgently needy very poor seniors want to live in decent rentassisted housing, you can see we are looking at a current deficit of 1.5 million to

3 million units.

Projecting to 2020, and such projections are, of course, very approximate and subject to all kinds of caveats, Dr. Golant estimates there will be 9.5 million very lowand extremely low-income seniors with priority housing problems. Again, assuming

that only one-quarter of those seniors want to live in rent-assisted housing, this

means we should produce 2.4 million units over the next 17 years, or 140,000 units

a year, if we want to be able to provide decent affordable supportive housing to the

country’s seniors in 2020.

Those numbers are huge! Suppose we do the same set of calculations just looking

at very low- and extremely low-income renters with priority housing problems.

Today, there are 2.4 million seniors in that category, NOT living in rent-assisted

housing. Since they are renters, one could predict that a higher proportion of them

would live in rent-assisted housing if it was available. If half of them would do so,

this means today’s deficit for renters is 1.2 million units.

Dr. Golant estimates that in 2020 there will be 3.2 million very low- and extremely low-income renters with priority housing problems. To provide decent affordable supportive housing to half of them, we should produce 94,000 units a year

between now and 2020.

It is in the context of these numbers that the Commission Minority recommends

to Congress that it authorize and fund an immediate production goal for subsidized

elderly housing with supportive services of at least 60,000 units a year for the foreseeable future. This housing could be developed through the highly successful Section 202 program, the Rural Housing Service’s Section 515 program, public housing

programs, and the low-income units in tax credit developments.

You might then ask the question: If we assume that it might take 94,000 units

a year to house those very poor senior renters with unmet priority housing needs,

and as many as an additional 46,000 units for very poor home owners with priority

housing problems who might want to move to such housing, why recommend only

60,000 units a year? It is the Minority’s view that it will take time and effort to

gear up at all levels—administration, producer capacity, regulatory, etc.—to be able

to utilize an authorization of even 60,000 units. This is a big jump in Federal comVerDate 11-MAY-2000 16:08 Oct 09, 2003 Jkt 000000 PO 00000 Frm 00024 Fmt 6621 Sfmt 6621 89741.TXT SBANK4 PsN: SBANK4
21

mitment—for example, this year’s Section 202 authorization was for only 5,800

units, just a few hundred for Section 515, and no additional public housing units.

The 60,000 units will be a serious start to meeting both today’s and tomorrow’s needs. But less than that would indicate an avoidance, a failure of will in heading

off the crisis.

The Minority also recommends major funding of at least $200 million for the Affordable Housing Preservation Act to stem the potential loss of any of the 324,000

affordable elderly housing units at risk.

With respect to the health and supportive services that seniors need to enable

them to age well in place, the Minority recommends a number of short-term and

long-term steps.

First, we make a series of recommendations that are similar to those in the Majority Report to strengthen the highly successful Service Coordination Program in

senior housing: That the HUD Service Coordinator grant program be expanded to

all Federally-assisted low-income housing and its funding increased to a realistic

level; that public housing authorities be funded to enable them to contract for services to their elderly residents; that Medicaid Home- and Community-Based Services

waiver funds be guaranteed for supportive services in all Federally-assisted senior

housing, including those projects utilizing the Assisted Living Conversion Program;

and a number of others.

More basic, it is obvious that the current Federal agency structure, in which housing and the various services seniors need are provided separately by separate Government departments which are governed by separate Congressional Committees

and separate OMB sections, does not lend itself to well-integrated and coordinated

housing and service programs. When the Commission began its work, I thought this

would be the single most important focus of our work. However, the Commission’s limited time-frame and mandate militated against in-depth consideration of structural reorganization proposals. Instead, the Minority proposes a number of concrete

steps that will begin the process of creating a coordinated system.

For example, the Minority recommends a simple change that will make eligibility

determinations in HUD-funded and HHS-funded programs easier to coordinate.

Currently, HUD determines program eligibility according to the regionally sensitive

Area Median Income standard. HHS programs use a national standard—either the

Federal Poverty Level or the Supplemental Security Income level. The Minority recommends that HHS program eligibility be based on the Area Median Income to facilitate the linking of HUD and HHS programs.

Similarly, the Minority recommends that HUD and HHS jointly develop a uniform

definition of assisted living and assisted living services for seniors.

In another more ground-breaking example, the Minority recommends a new Aging

in Place demonstration program that links funds provided through the HHS Homeand Community-Based Service waivers and other Federal senior supportive service

programs (through AoA and DOT, for example), with HUD and RHS rent subsidies

to support aging-in-place strategies for frail residents.

These are small steps that can perhaps lead to far greater linkages among the

programs that help support successful aging.

And finally, recognizing that the principal payment systems for services and

health care for seniors are the Medicare and Medicaid programs, the Minority offers

two recommendations that will begin the transformation of these programs for the

21st Century.

First, we join the call for a Medicare Prescription Drug Benefit. The new wonder

drugs available today have made possible declining hospital utilization rates as

more and more serious conditions can be treated out of the hospital. But seniors

often cannot afford these drugs and therefore wind up requiring the far more expensive hospital care. The Prescription Drug Benefit has become an essential prong of

a comprehensive and cost-effective health policy. Likewise, the success of today’s

health care measures is evident in keeping seniors alive and relatively well-functioning for many years longer, but brings with it a need for home care for the resulting chronic conditions and disabilities. Again, without necessary home care, seniors

will wind up in much more expensive hospital care. The Minority, therefore, recommends an expansion of Medicare coverage to include chronic and long-term care

and prescription drugs.

Similarly, the relatively complete coverage that Medicaid provides to low-income

seniors does not require that Home- and Community-Based Services be provided on

an equal basis with institutional care and other Medicaid entitlements. Since Medicaid is a joint Federal-State program within which States have wide latitude in designing their program, there has been a reluctance to impose a new entitlement on

States. The Minority believes that putting Home- and Community-Based Services

on an equal footing with institutional care will, in the long run, save money, as it

22

will avoid the far more expensive institutional care. More important, it will respect

the dignity and choice of seniors who wish to remain in their own homes as long

as possible. It will also enable States to respond positively to the mandate of the

Supreme Court’s Olmstead decision that individuals have the right to choose to live

in the least restrictive environment that will meet their needs.

The Minority also stresses the importance of adequate training and pay scales for

the workers who provide services to seniors and we provide a series of recommendations to improve their working conditions.

In closing, you gave the Commission an enormous mandate, to look ahead at a

problem that is clearly and dramatically growing in scope. The Minority believes

that denial and wishful thinking have no place in trying to solve a problem. We believe that Members of Congress asked to know the scope of the problem and the

hard realities of its solution. The country’s unprecedented success that makes possible many more years of life for the elderly of our country than were even dreamed

about just a generation ago has created an unprecedented demand for housing and

health and supportive services. The hard reality is that there are unprecedented

costs involved in meeting this demand.

This country has the resources to pay these costs. The country uses them according to our priorities and our commitments. We have used our resources with extraordinary success to create the highest rate of homeownership in the developed

world by permitting the interest we pay on home mortgages to be tax deductible— a subsidy amounting to $60 to $90 billion in 1999. We must now begin to bring parity in resource allocation to the housing and service needs of low-income elders that

we brought to stimulating homeownership.

The Minority urges Congress to commit the Nation once again to assuring a good

old age for its seniors who have contributed so much.

The effort of this Commission, both Majority and Minority members, has been to

provide Congress with information and with new tools to address the crisis ahead.

We have participated in a nationwide dialogue which we have reported to you. It

is our hope that the outcome will result in better health and greater independence

for the huge numbers of elderly people who will surely need both.

—————

PREPARED STATEMENT OF NANCY HOOKS

CO-CHAIR, COMMISSION ON AFFORDABLE HOUSING AND HEALTH FACILITY NEEDS

FOR SENIORS IN THE 21ST CENTURY

JUNE 27, 2002

PLEASE NOTE: Since Ms. Nancy Hooks was not able to be present at the hearing,

her testimony was presented by Mr. John Erickson, Commissioner, Commission on

Affordable Housing and Health Facility Needs for Seniors in the 21st Century.

Chairman Sarbanes, Senator Gramm, Members of the Committee—thank you for

holding this hearing to receive testimony regarding the impending Report of the

Commission on Affordable Housing and Health Facility Needs for Seniors in the

21st Century—the Seniors Commission.

I am Nancy Hooks of Albany, New York, and for the past 18 months I have CoChaired the Seniors Commission. It is a great honor to have been selected for this

important mission and to be invited to share our key findings with you.

Like many of my colleagues on the Commission, I have dedicated my professional

life to helping seniors live with a sense of fulfillment and of dignity. As fourteen

Commissioners, with vastly different backgrounds, occupations, and life experiences,

from 11 different States, we brought a great deal of diversity of opinion to this responsibility—and that diversity is a strength that has led us to an array of thoughtful recommendations. Our Report reflects a wide range of perspectives and solutions

to some extraordinarily pressing problems. We offer over 40 specific recommendations and a wealth of new data to lay the groundwork for the changes that are

needed if we are to provide Americans with the assurance that they will not be

abandoned in their later years.

Mr. Chairman, our Congressional mandate laid out extensive expectations, and I

am pleased to report on the vigorous effort that has been undertaken to meet them.

I would like to begin by explaining how we have evolved. Created in the fall of 1999

by bipartisan legislation sponsored by former Congressman Rick Lazio, the Seniors

Commission was not formally appointed until January 2, 2001. And we recognized

our creation as a rare opportunity to be proactive—to be creative. Serving the

23

1 United States Census, Housing Vacancy Survey, First Quarter, April 2002, Graph of Homeownership Rates. 2Older Americans 2000: Key Indicators of Well-Being, Federal Agency Forum on AgingRelated Statistics (August 2000): Indicator I. http://www.agingstats.gov/chartbook2000/

population.html

overwhelming and diverse population to come is a task requiring considerable

preparatory work—it cannot be handled overnight and ‘‘more money’’ is an oversimplified and inadequate solution. Rather, the task will necessitate substantial

changes in Federal, State, and local policies, service delivery and funding.

Throughout 2001, the Seniors Commission launched a nationwide dialogue on

senior housing, health care, and supportive service issues. We organized and we

conducted a series of coast-to-coast field hearings that resulted in our exposure to

some of the most innovative thinking and best practices impacting the lives of seniors today.

In Syracuse, NY, Columbus, OH, San Diego, CA, Miami, FL, and Baltimore, MD,

we listened not just to policy experts, researchers, demographers, Government officials, civic leaders, professionals and care providers, but to seniors themselves. At

each of our five, day-long field hearings we allocated time in the program to allow

every concerned senior present to address the Commission. We listened closely and

were moved deeply as seniors and their loved ones told us, in their own compelling

words, about the housing and health challenges they face each and every day.

As a result, the Commission learned that the needs of seniors are quite diverse

and that the ways in which those needs may be met are equally diverse. We learned

that there are policies that work for many, but not necessarily for all. What works

in some cities does not necessarily work in others or in rural or suburban areas.

What works for some seniors doesn’t for others, or is unavailable altogether. We

learned that many Government programs do not function collaboratively, and that

their failure to do so imposes added burdens on the very individuals they are intended to help. We learned that Government, the private sector, nonprofits, and

faith-based organizations can and must do more today to address the existing and

future needs of our growing senior population.

The Seniors Commission’s national dialogue highlighted what we consider to be

America’s ‘‘quiet crisis’’—the senior housing and health care challenges we will face

as the Baby Boomer generation reaches retirement age. Today, as we summarize

our key findings, the Seniors Commission urges broad acknowledgement of this crisis. The legacy of this panel, and that for which each Commissioner hopes, is for

Congress, the Administration, State and local government, the private sector, nonprofits and faith-based organizations to recognize that responding to the senior

housing and health concerns we have identified must be a national priority. President Bush, in his recently announced, progressive housing initiative to promote

homeownership and to increase the supply of affordable homes, has demonstrated

his leadership by identifying housing as a national imperative.

The Commission’s Report contains data reflecting the present needs of seniors and

how they are met, and allows us to predict the range of future need. Today, nearly

68 percent of Americans own their own home, and that figure is over 80 percent

among those aged 50 and above. Further, of those aged 50+ homeowners, 58 percent

own their home free and clear.1 This pattern is likely to prevail in the future, perhaps to an even greater extent if our projections hold true. Aware of this, the Commission took a serious look at health policy, especially with regard to long-term care

affordability, availability, and accessibility. It is apparent that health policy, especially long-term care, compels individuals to leave their homes to receive care, favors

institutional settings and is often prohibitively expensive. Therefore, the Commission strongly recommends encouraging the provision of the Home- and CommunityBased Services (HCBS).

The senior population is expected to grow dramatically over the next 30 years due

to the aging Baby Boomer generation. In 2011, this generation will begin to retire.

By 2020, they will number close to 54 million and by 2030, they are expected to

number 70 million. One in five Americans will be a senior.2 America’s future seniors

are now in their 30’s, 40’s, and 50’s. In 9 short years, the first wave of this generation will reach age 65, and begin to test our Nation’s senior resources.

The prime focus of our mandate is housing and health facility needs. Housing and

health-related needs data is vital to producing a picture of the future needs of senior

Americans. Information on income and Federal investment is also important to a

thorough analysis. Both factors give context to the scope of need demonstrated by

existing housing and health data. The income of seniors is an essential factor in predicting their ability to cope with the challenges of aging.

24

3One hundred percent SSI is approximately 74 percent FPL; both are national standards,

with minor exceptions. 4 Robert Mollica, Personal Care Services: A Comparison of Four States, AARP (March 2001).

5McKnight’s Online Daily Update (June 24, 2002). 6Lewin Group Report to the U.S. Department of Health and Human Services, as reported in

McKnight’s Online Daily Update (June 24, 2002). 7Senate Aging Committee Report, ‘‘Aging Committee: Hearing Finding Summary,’’ as reported

in McKnight’s Online Daily Update (June 24, 2002).

A key trend is the gradual percentage reduction in the low-income and poverty

level population. In general, we expect the Baby Boomers to begin their retirement

years in a better financial position than that of their parents. They will be a generation of consumers who are accustomed to personal independence, financial planning,

and consumer choice—their needs and expectations will differ greatly from those of

our current seniors, as will their health, wealth, and social attributes. While this

trend is expected to continue, the large volume of Baby Boomers moving through

the various age cohorts during the period beyond 2010 will, nevertheless, test the

limits of our housing and health system. Even if increasing incomes are assumed,

large numbers of low-income seniors will continue to require significant assistance,

and many middle-income seniors will find themselves on the precipice of hardship

due to some unforeseen health or housing expenses that may not be addressed by

present policy.

The different forms of assistance, the different benefits offered in each Government application, and the different income qualifications impact numerous seniors.

Rent-assisted housing often has the broadest eligibility of the means-tested programs because of the Department of Housing and Urban Development’s use of Area

Median Income (AMI) as a guide. Medicaid, on the other hand, uses variations of

Supplemental Security Income eligibility that relate to the Federal Poverty Level

(FPL).3 In many areas of the Nation, the differing standards do not make a great

difference. However, in high-cost areas, they are very important, because the HUD

standard tends to be more lenient, creating a disparity between eligibility for housing and eligibility for the types of health or health-related benefits many need, and

that are only subsidized effectively under Medicaid.4 In contrast, in other areas, individuals are eligible for Medicaid, but not for subsidized housing. The Commission

addresses these complex issues in its recommendations.

The Commission heard one, consistent message: Seniors wish to age in place,

which may mean in a private home, a congregate community, or another location

of their choosing. If it can be done safely and efficiently, it should be done. We have

always been a Nation that puts a high value on liberty and choices. Smart policy,

providing the appropriate level of care and securing effective assistance in the home

can avoid premature placement in institutional settings and save scarce resources

for those who truly need the extensive and the very costly level of care provided by

those settings.

The Senate Aging Committee has recently conducted 13 hearings, and has reported that Government program spending on long-term care will absorb nearly 75

percent of all Federal revenues by the year 2030.5 Already, in 2001, State Medicaid

programs paid about 62 percent of the $137 billion spent nationally on long-term

care.6 Key witnesses at the June 20, 2002, Senate hearing suggested that our Government could realize savings if Medicare and Medicaid funds could be blended to

evade service duplication and if States could utilize Medicare and Medicaid funding

to reimburse preventive care, thereby allowing seniors to remain at home, as opposed to moving to more costly institutional settings.7

Modest assistance for home modifications or repairs can allow seniors to remain

in their homes, thereby reducing the need to build additional, affordable rental

housing properties. Furthermore, service-related assistance for seniors, once again,

in the home, allows them to remain in the community, reducing the overall cost to

taxpayers. In an institutional setting, for many seniors receiving Government assistance, the Government is paying for their housing and their health services. By subsidizing health services in the home setting, substantial savings are realized. Only

in the most desperate of health situations, does an institutional setting achieve real

cost benefits. Providing home-based assistance allows seniors to maintain their independence and dignity, and it should be encouraged.

While there will always be a need for the skilled nursing facility level of care,

Home- and Community-Based Services offer an alternative that is appropriate for

most, except the very frail or seriously ill, who do not have the benefit of informal

caregivers and, therefore, require intensive and extensive support. The Federal Government’s involvement in the funding of such services under the Medicaid program

25

8 Valerie Lewis, Medicaid Waivers: California’s Use of a Federal Option, Medi-Cal Policy Institute (March 2000): 5–6. http://admin.chcf.org/documents/mcpi/medicaidwaivers.pdf 9 Enid Kassner, Loretta Williams, ‘‘Taking Care of Their Own: State-Funded Home- and Community-Based Care Programs for Older Persons, AARP (1997). http://research.aarp.org/health/

9704lfunded.html 10 Robert Mollica, Enid Kassner, Personal Care Services: A Comparison of Four States, AARP

(2001), 1–2. http://research.aarp.org/health/2001l04lcare.pdf 11Mollica, 4.

largely began with the use of Medicaid waivers.8 Many State-funded programs have

also recognized HCBS.9 Although the greatest use of HCBS has been to support the

de-institutionalization and expansion of community services for individuals with

developmental disabilities, the waivers have become increasingly useful as a means

to finance services for low-income seniors. States may also provide personal care

services through the ‘‘Personal Care Option’’ under Medicaid, though personal care

tends to be limited to nonmedical types of care.10

Commission research projects that, in 2020, 4.2 million seniors will need personal

care, including 2.4 million seniors with incomes under 250 percent of the poverty

level. Another 3.2 million will require skilled home care with 2.3 million under 250

percent of poverty. Coverage for such services under Federal and State programs

becomes more limited as income increases, since Medicare is far more restrictive in

its coverage of such services.11 Given the unprecedented growth in need for these

services and the present limited levels of access to such services, the Commission

has developed several recommendations to improve the availability of services to

seniors, regardless of their residential setting.

The Commission recommends that Congress encourage the States to continue to

develop Home- and Community-Based Services as the preferable and cost-effective

alternative to facility-based skilled nursing care under the Medicaid Program. For

example, enacting a ‘‘shelter deduction’’ will help HCBS gain parity with institutional settings by changing the home from a liability in terms of qualifying for assistance, to an asset that reduces the overall cost of providing services by removing

the costs associated with the institutional component.

26

The Commission also recommends that Congress examine ways in which Homeand Community-Based Services can be modified to more efficiently and effectively

support services to seniors with chronic disabilities or illnesses. The Commission believes that it is the reform, rather than the reduction of Medicare spending, that

has the potential for savings.

In addition, the Commission recommends private sector solutions. We encourage

Congress to provide incentives to purchase long-term care insurance to reduce both

the overwhelming out-of-pocket burden on seniors and the pressure on the public

support systems.

For many seniors, greater availability of, and investment in, long-term care insurance will provide them with a more secure future and allow them to save their

financial resources. It is important that diverse, quality products be developed and

promoted. Deductibility for long-term care insurance should be a part of any future

tax proposals.

I opened my remarks with a discussion of our health recommendations since, as

we delved into the issues, the level of frailties and the fragmentation of services

combined with the large number of senior homeowners of all incomes indicated to

us that perhaps health and health-related services are a wider problem than the

lack of affordable housing. Clearly, however, there are shortages of affordable housing and there is a need for more of it. There is also a need for such housing to be

modified or constructed with the needs of seniors in mind.

To accommodate those seniors who cannot afford market rate housing, there is

clearly a need for more affordable housing production. Although the American Housing Survey is, perhaps, the best data set available on housing, several Commissioners identified serious flaws in it, and additional research using other data sets,

especially on income, served to reinforce their concerns.

27

12State of the Nation’s Housing 2001, Harvard Joint Center for Housing Studies (2002), 29.

These, coupled with the Harvard Joint Center for Housing Studies’ projections of

greatly increased senior homeownership and an awareness that, in some communities, subsidized housing units remain vacant, raises a cautionary flag about proceeding too vigorously with housing production.12

What is clear is that shortages do exist, and in some communities they are very

serious. They are likely to continue unless relieved by significant increases in production. Some of the key recommendations in our Report are:

• Preservation, modernization, and retrofitting of existing affordable senior housing.

• Expansion of all types of assisted housing in order to meet market demand.

• Expansion of the role of Government Sponsored Enterprises in supporting senior

housing needs.

28

• Encouragement of service-enriched, senior housing development by streamlining

regulatory processes and coordinating agencies that interface in the provision of

housing and services at the Federal, State, and local levels.

• Redesign of programs to reflect the real needs of individual seniors, while providing enough flexibility to ensure that localities have the most appropriate tools

to meet local needs, rather than imposing ‘‘one-size-fits-all’’ solutions.

By moving in these directions, the needs of the growing senior population can be

met. To reiterate, our Report has more than forty recommendations; it is our tool

for change—a document that looks to the future in a realistic manner. I encourage

you to examine the recommendations very closely and to explore their implications

and impacts.

Will Rogers once said, ‘‘Even if you are on the right track, you are gonna get run

over if you just sit there.’’ The members of the Seniors Commission did not just sit

there. And we believe our recommendations will take the Nation farther down the

track toward ensuring affordable housing and addressing health facility needs for

seniors in the 21st Century.

Co-Chairing the Seniors Commission has been a valuable experience and opportunity for me to participate in developing a comprehensive, bipartisan and national

policy statement on the issues I care about so deeply, and I have enjoyed serving

you and working to find solutions to improve the lives of American seniors.

I thank you for this valuable opportunity.