If you’re over 55 and seeking any kind of rental housing – or if you care about someone who is – you know that it’s tougher than ever to find and even tougher to afford.
With the apartment vacancy rate around 1 percent in Spokane, and rents going up and up, seniors on a fixed income are being priced out. Waiting lists for affordable senior apartments are years long. It’s no wonder that the proportion of seniors in our growing homeless population is also growing.
The good news is that we have an effective financing tool that creates housing that seniors deserve – housing that is not just affordable, but also safe, accessible to those with disabilities, connected to health services and well-located.
Yet we may be about to throw it away.
By eliminating private-activity bonds, the Tax Cuts and Jobs Act recently passed by the U.S. House of Representatives would wipe out more than half our state’s production of affordable apartments for seniors and working families after Dec. 31.
Almost 3,000 affordable apartments in Spokane County owe their existence to these bonds – more than 500 of them specifically set aside for seniors.
Eliminating private-activity bonds would also kill a separate nonprofit housing program that has financed about 1,000 affordable apartments, assisted-living units and nursing beds for seniors here in Spokane.
With the need for affordable housing so dire – and our senior population growing – why would we give up a cost-effective incentive for private developers and nonprofits alike to meet that need?
Our two local nonprofit organizations have built a range of affordable housing options for lower-income seniors using these tools.
For example, Spokane Baptist Association Homes used private-activity bonds, in tandem with the Low-Income Housing Tax Credit, to build Lilac Terrace on Spokane’s North Side in 2009. This beautiful, modern building next to our Lilac Plaza tower rents 50 apartments that are kept affordable to seniors with income under 60 percent of local median income.
Meanwhile, Rockwood Retirement Communities uses these bonds to finance nursing beds, assisted-living units and independent apartments at our South Hill and Hawthorne campuses that are reserved for seniors of lower incomes.
In 2014, Rockwood also built the second phase of Appleway Court in the Spokane Valley using private-activity bonds, adding 24 affordable apartments to this vibrant senior community. Tellingly, these were the last new affordable senior apartments added in Spokane.
Between 2010 and 2015, the over-65 population of Spokane County grew by 22 percent. The number of affordable senior apartments grew by just 4.7 percent.
Without the lower-cost capital provided by private-activity bonds, even this modest development would not be financially feasible. With it, rents can be brought down within reach of lower-income seniors. They can also live in safe, well-maintained communities that are rich in amenities.
That’s not too much to ask. And it’s what private-activity bonds finance.
Tax reform is important. But if private-activity bonds are eliminated in order to fund tax cuts elsewhere, hundreds of seniors in Spokane will never be able to access the affordable rents they provide. That amounts to a tax increase on seniors.
One final note: If we give up private-activity bonds, we’re giving up much more than rental housing. In Spokane County alone, the apartments created by this program have generated an estimated 4,817 jobs, $350 million in local income and $65.8 million in taxes and other government revenues.
That’s an economic gain that benefits everyone, not just seniors.
Shouldn’t we encourage an incentive for private investment that builds affordable rental homes, creates jobs and generates income, all at the same time – instead of cutting it off?
The tax bill passed by the Senate this week does not eliminate private-activity bonds, but the House bill does. We call on our members of Congress to ensure that private-activity bonds are protected in the final version of tax reform. Otherwise, we’re hurting not only our seniors, but our community.
Alan Curryer is president and CEO of Rockwood Retirement Communities. Glen Pierce is CEO of the nonprofit Spokane Baptist Association Homes.