An appropriation of $854 million is proposed for the Housing for Special Populations program for fiscal year 2000. This consists of $660 million for the elderly and $194 million for housing for persons with disabilities. Of the funding proposed for the elderly, $100million will be for a new initiative--the Capital Grants for Conversion to Assisted Living program--to address the growing needs (as discussed below) of the Nation's seniors. Also, $50 million of the funds proposed will be for an expanded Service Coordinator program. In addition to the $660 million in discretionary funding, the Budget also proposes $87 million in mandatory spending for 15,000 vouchers for the elderly. These will be used by States to make units developed with low-income tax credits affordable to extremely low-income elderly people (below 30percent of area median income).

The remaining $194 million is proposed for persons with disabilities. Up to 50 percent and no less than 25 percent of this amount may be used for tenant-based assistance to provide for program flexibility and more choice in housing for the low-income disabled.

The United States will go through an unprecedented demographic shift over the next 50 years. By 2050, as many as one in five Americans will be elderly (65 and over), compared with one in every 25 at the turn of the last century. By 2050, the elderly population will more than double to 80 million, with seniors 85 years and older making up almost one quarter of that population. Many of this group will be alone, and many will be facing multiple chronic illnesses and will need to rely upon family, friends or community for support.

Too many senior citizens are forced out of their homes because they face catastrophic healthcare costs associated with aging--costs that drain their finances and make owning a home unaffordable. This housing crisis will likely affect millions of seniors in the new century. The latest studies already show that about one million elderly pay more than 50 percent of their income in rent or live in substandard housing.

To address this looming crisis, and to meet the needs of today's hard-pressed seniors, the Department proposes a Comprehensive Plan which will enable senior citizens to remain in their homes or the home of their relatives. Moreover, by coordinating housing and health care, this Plan helps seniors avoid more expensive and restrictive health care facilities.

This initiative offers a full range of housing options for the elderly--a Continuum of Care. By combining new and existing HUD programs, and improving coordination with other Federal assistance activities, a comprehensive and cost effective senior housing system that preserves security and independence as a senior's healthcare needs and financial resources change will be established.

The strategy addresses six stages in the continuum: first, helping seniors stay in their own homes when appropriate; second, helping seniors stay with their own families whenever possible by creating viable options for housing with family members; third, ensuring the availability and quality of Government-assisted senior housing when staying at home or with family is no longer possible; fourth, providing health and other support services in existing housing to avoid the need to move to nursing homes or other medical facilities unless absolutely necessary; fifth, ensuring that our Nation's elderly remain an integral part of our communities; and sixth, making assisted living a housing option for low-income seniors.

1. HELPING SENIORS STAY IN THEIR OWN HOMES. The first priority of the Plan is to help seniors remain in their own homes whenever possible. It is not uncommon for elderly Americans to be housing "rich" but cash "poor." To ease this dilemma, HUD will expand its successful healthy homes initiative to focus on the needs of older homeowners, in cooperation with appropriate agencies of the Department of Health and Human Services. This effort will provide seniors with information on how they can convert the equity in their own homes into funds for needed health and safety home improvements, including home rehabilitation loans, through HUD's reverse mortgage program.

2. A FAMILY-FIRST POLICY. Whether for health reasons or financial constraints, some seniors will no longer be able to live alone in their own homes. Because caring for these elders starts with the family, the proposal permits housing vouchers for elderly relatives to encourage moderate-income owners of rental units to rent to their needy parents and grandparents. Current regulations under the Section 8 program restrict families who own rental units from renting these units to their family members. By removing this restriction, with appropriate safeguards against abuse, the elderly will be provided additional opportunities to secure a decent place to live and also the supervision and personal support elders need to remain independent. With over one million elderly renters facing severe rent burdens, this easing of the Section 8 rules would offer another option for meeting worst case housing needs.

3. ENSURING THE AVAILABILITY AND QUALITY OF SENIOR HOUSING. The Plan proposes an expansion of the highly successful Section 202 Supportive Housing for the Elderly program. This program works with local non-profits to create housing tailored to the unique needs of seniors, offering rental assistance and serving a particularly vulnerable group with special needs and limited mobility. The need for senior-tailored complexes is increasing at a tremendous pace, as the number of elders and the frail elderly rapidly increases. The Administration is proposing statutory changes that would expand the impact of this program and the overall supply of affordable rental housing by permitting a wider range of private funds to leverage HUD financing, through such mechanisms as low-income housing tax credits. In addition, a new $87million mandatory program is proposed to provide 15,000 additional vouchers which will be initially used by elders who rent units in projects subsidized by the low-income housing tax credit.

4. ENSURING THE AVAILABILITY AND QUALITY OF SENIOR HOUSING. The Plan proposes an expansion of the highly successful Section 202 Supportive Housing for the Elderly Development Grant program. This program works with local non-profits to create housing tailored to the unique needs of seniors, offering rental assistance and serve a particularly vulnerable group who cannot easily access tenant-based voucher programs because of their special needs and limited mobility. The need for senior-tailored complexes is increasing at a tremendous pace, as the number of elders and the "oldest old" rapidly increases. The Administration is proposing statutory changes that would expand the impact of this program and the overall supply of affordable rental housing by permitting a wider range of private funds to leverage HUD financing, through such mechanisms as low-income housing tax credits. In addition, a new $87million mandatory program is proposed to provide up to 15,000 additional vouchers which will be initially used by elders who rent units in projects subsidized by the low-income housing tax credit.

5. COMMUNITY-BASED CARE. Because Americans are living longer, many enter a period where they are capable of living semi-independently but still need some social services as well as specially designed buildings that make getting around easier for them. Included in the proposal is $100 million for grants for existing Section 202 projects that convert some or all units to assisted living so that these facilities can meet the changing needs of our aging population. Also proposed is a $50 million expansion of the successful Service Coordinators program for the elderly and disabled. By expanding funding and allowing Service Coordinators to serve lower-income elders in HUD-assisted housing and, on an exception basis, those residing in private homes and apartments in the same neighborhood, seniors can be assured that they can receive needed supportive services in their homes. Funding necessary to renew on-going Congregate Housing Services Program grants may also be provided in this earmark. Applicants for conversion to assisted living and service coordinator grants will be encouraged to use both Medicaid waivers and other third-party funding sources to pay for the costs of services through a competitive funding process.

6. INTERGENERATIONAL LEARNING CENTERS. Throughout this continuum, we must ensure that our seniors remain connected to our communities--sharing their skills, knowledge and energy. To strengthen this connection, an eligible use of grant funding would be the physical establishment of Intergenerational Learning Centers to link two vital needs: affordable senior services and affordable child care. These Learning Centers will be located within and operated, at least in part, by residents of existing Section 202 and other assisted housing developments. These Centers will harness the skills of seniors to meet the country's critical need for affordable child care. Through HUD's existing Neighborhood Networks program, these Centers can also serve as a focus point for sharing Internet technology, allowing seniors and children to learn new skills together.

7. ASSISTED LIVING. When seniors have to move into assisted living facilities to get the help they need, this Plan proposes HUD partner with HHS to better integrate housing assistance with Medicaid funding for services. A change to current law is proposed to allow vouchers to cover the rent portion of assisted living costs. Lower-income seniors should not be locked out of an assisted living facility simply because a housing voucher issued by one part of the Government cannot work in conjunction with Medicaid payments for assisted living services issued by another part of the same Government.

2. CHANGES FROM 1998 ESTIMATES INCLUDED IN THE 1999 BUDGET

   Estimates for 1998 in the 1999 Budget assumed that $1.5 billion would be used to support approximately 18,682 capital grants and rental assistance units for the elderly and disabled in 1998. Actual activity totaled $1.4 billion supporting 17,617 units.

3. CHANGES FROM 1999 INCLUDED IN THE 1999 BUDGET

   As part of HUD's transformation, the fiscal year 1999 Budget proposed the reformation of the Section 202 and 811 programs of capital advances and project rental assistance. For 1999, the Housing for Special Populations program, was proposed to be administered by CPD under the HOME program. The requested funds would have financed activities such as construction, rehabilitation and acquisition, and tenant-based assistance. Current estimates for 1999 reflect that the funding is being provided under the separate Housing for Special Populations appropriation.

For the 2000 Budget, a total of $854 million is requested to fund elderly and disabled activities for 9,400 units under the Housing for Special Populations program. Within this request is $150 million for two new or expanded initiatives: Conversion to Assisted Living Grants, and Service Coordinators for the Elderly.

The Supportive Housing Programs. The Supportive Housing programs were authorized by Section801 and Section 811 of the Cranston-Gonzalez National Affordable Housing Act to provide eligible private non-profit organizations with capital grants and rental assistance to provide housing for very low-income elderly or disabled individuals. The capital grants will be used to finance the acquisition, acquisition and moderate rehabilitation, construction, reconstruction, or rehabilitation of housing intended for use as supportive housing for elderly people or people with disabilities. Supportive housing is designed to meet the special physical needs of elderly or disabled individuals and to accommodate the provision of supportive services.

Capital Grants for Conversion to Assisted Living. These funds will be available to existing HUD elderly subsidized (Section 202) projects that convert some or all units to Assisted Living. These competitive grants would be available to current project owners who agree to several specified conditions. These conditions would include: (1) a tight cap on operating expenses and HUD subsidy; (2) Medicaid home and community-based services or personal care services for Medicaid-eligible residents, and accessible services for non-Medicaid eligible residents through local and community service providers; (3) two meals per day; and (4) 24-hour staff. (A portion of these funds may be used to provide space within elderly housing projects for Intergenerational Learning Centers where the skills and experience of seniors will be harnessed to meet the need for affordable child care and allow seniors and children to learn new skills together.) Preference will be given to grant applicants who demonstrate a strong commitment to: (l) serve extremely low income frail, disabled elderly residents; and (2) promote resident autonomy, independence, choice and control.

Service Coordinators. Section 808 of the Cranston-Gonzalez National Affordable Housing Act authorized the use of Service Coordinators within existing projects for the elderly or people with disabilities. Section 674 and 676 of the Housing and Community Development Act of 1992 expanded the universe of projects eligible to receive service coordinator assistance by authorizing funding for service coordinators in Section 8 and sections 221(d)(3) and 236 projects. The purpose of the Service Coordinators program is to enable residents who are elderly, especially those who are frail or disabled, or people with disabilities to live as independently as possible in their own homes.

Service Coordinators funds pay the salary and fringe benefits of a Service Coordinator and cover related program administrative costs. The primary responsibility of a Service Coordinator is to help link residents of eligible housing with supportive services provided by community agencies. The Service Coordinator may also perform such activities as providing case management, acting as a advocate or mediator, coordinating group programs, or training housing management staff.

Congregate Services. The Congregate Housing Services Program (CHSP) was authorized by the Housing and Community Development Amendments of 1978 to provide 3- to 5-year grants to fund services for eligible residents of Public Housing and Section 202 Housing for the Elderly or Handicapped. The intent was to avoid costly and premature or unnecessary institutionalization of individuals and to reduce Government outlays for institutional care. The program was revised in 1992 to add other assisted housing programs.

The CHSP grant from HUD, in conjunction with grantee match and participant fees, subsidizes the cost of supportive services that are provided on-site and in the participant's home. Such services may include congregate meals, housekeeping, personal assistance, transportation, personal emergency response systems, case management, and preventative health programs. HUD requires that each program include a Service Coordinator and that each makes at least one hot congregate meal available every day to participants. Eligible participants are residents of eligible housing who are frail (i.e., have difficulty performing three or more activities of daily living) or are people with disabilities age 18 or older.

CHSP funds allow residents of HUD subsidized housing to afford supportive services that enable them to continue living as independently as possible in their homes for as long as possible. Without this program, most of the low- and very low-income participants would have no choice but to relocate to a facility that provides a higher level of care, such as a nursing home, to meet their daily living needs. Renewals for this program are proposed to be funded under the Housing for Special Populations program in 2000.

Vouchers. Section 8 tenant-based assistance will be provided with up to 50 percent and no less than 25 percent of the funding made available for supportive housing for the disabled to increase program flexibility. The assistance will allow disabled renters to search for and rent a standard unit in the private market. This is known as "mainstreaming" recipients into the housing market.

The Direct Loan Program. The Housing for the Elderly or Handicapped Direct Loan program was authorized by Section 202 of the Housing Act of 1959, as amended. The program is no longer active, although projects developed under it continue to operate. The program provided direct loans to nonprofit organizations sponsoring the construction and management of rental housing for the elderly or handicapped. Projects originally developed under Section 202 also receive Section8 subsidies to enable low-income households to afford the rents in these projects. The 1992 VA-HUD-Independent Agencies Appropriations Act (P.L. 102-139) provided language to enable the conversion of Section 202 direct loan projects to the Supportive Housing program starting January1, 1992. All of the projects were converted in fiscal year 1992.

PROGRAM ACTIVITY

Any remaining activity for the loan program includes amendments for projects reaching final endorsement, payment of interest and repayment of borrowings to Treasury, and management of the loan portfolio.