Tuesday, July 15, 2008

Overview of how "seniors only" or "age restricted" housing work; compare to other kinds of housing

Today, I had a conversation about how senior housing works. There are many different kinds of dwellings and businesses, and the public may sometimes confuse them. The most expensive are nursing homes, which must provide round-the-clock custodial care, and even these have different types (like skilled nursing facilities and intermediate care facilities). Custodial care is not covered by Medicare but may be covered by Medicaid for indigent patients. But skilled care (where the patient gets better) is covered by Medicare for limited time, as is hospice care in some cases.

The next level is assisted living, which provides practical assistance in addition to housing (including cooked meals and medication supervision), and usually the ability to facilitate placement in a nursing home if the patient gets worse. Some assisted living facilities have special units for Alzheimers. A major company in this business is Sunrise.

But still more common are senior apartments, limited to people 55 and over, and also senior condominium residences, which also have age minimums. Some senior condominiums offer assisted living services. But generally “senior apartments” are exactly that, without special services (although there are some activities). This arrangement makes it possible to offer some relative luxury, including cable access, and reasonable security and protected access. Typically they cost about 40% of what assisted living would cost. They tend to be located in smaller cities, often 20-50 miles from the centers of major cities.

The senior apartments are an important resource because they often have much more lenient income requirements, designed for seniors on fixed incomes, often including social security. A typical arrangement specifies a minimum and maximum annual income as rental eligibility. The minimum is likely to be on the lower end of typical social security incomes, and the maximum would correspond to a typical hourly job. Investment income is likely to be included, but adding up the applicant’s assets and applying a federal funds rate formula. HUD requirements affect how these apartments work.

“Regular” apartments often have a much higher minimum income. Some may consider total assets (along with requiring an EFT automatic debit arrangement with a bank in advance) but are likely to require a cosigner if minimum income cannot be met. For older seniors living alone and without close relatives or marital partners, the cosigner requirement could be an issue.

Here is a reference on “age restricted” or “Seniors Only” apartments, which explains how the “legal age discrimination” works. Here is a discussion of HUD Section 202 low-income senior apartments.

Another reference that indexes the income limits appears to be this.

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