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ResearchWorks September 2010

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Benchmarking Operating Costs of Housing for Elderly and Disabled
A picture of the Marshfield Group Home.

In 1990, Congress launched Project Rental Assistance Contracts (PRAC) as part of HUD's multifamily program. PRAC advances capital grants for nonprofit developers to finance the construction and rehabilitation of housing for the elderly and disabled under the Section 202 and 811 programs, respectively. PRAC also supports these projects by paying landlords the difference between their tenants' rents and HUD-approved operating expense levels. Those operating costs, which are reexamined every 3 years, are estimated against benchmarks set by HUD.

However, a new study, Section 202 and 811 Operating Costs Needs, finds that HUD's benchmarks are sometimes out of sync with site-, property-, and regionally specific conditions. As a result, the study concludes that HUD may need to develop a new model for benchmarking operating costs — one that considers a development's unique characteristics.

Findings

In terms of overall aggregate spending, according to HUD social science analyst Brent D. Mast, the study found that PRAC costs did not deviate dramatically from HUD's benchmarks: HUD spends about 9 percent less than necessary on operating expenses for all Section 202 (elderly) housing and about 4 percent more than necessary for Section 811 projects, which house the disabled.

Nevertheless, at the project level, the study revealed many over- or underfunded developments. For instance, 9 percent of PRAC Section 202 projects are measured against benchmarks that are at least 20 percent lower than their actual, current operating expenses. At the same time, 33 percent of Section 202 projects' costs are estimated to be about 20 percent higher than they really are, meaning that these projects receive far too much funding. In such cases, Mast points out, people "spend what they get" regardless of their project's actual needs. Section 811 projects showed similar rates of under- and overfunding.

A picture of the Prospect Street development.To find out what caused these inconsistencies, researcher Judy Weber visited 10 sites whose operating expenses were over or under HUD benchmarks. She looked at the projects' annual financial statements, interviewed their owners and staff, photographed their neighborhoods and sample units, and put together a budget for each project reflecting her investigations.

The fieldwork revealed numerous unique elements not accounted for by current benchmarks. These include real estate taxes, which can vary from year to year and from place to place; whether projects are group homes or individual apartments; the number of units in each development; the extent to which volunteers take responsibility for basic maintenance; the degree to which owners rely on external contractors for maintenance and other work; and costs unique to the development's geographic area, particularly those on the outskirts of a major city.

For instance, the Prospect Street development in Boston, a Section 811 project, reports operating costs of $745 per unit, rather than the $607 benchmarked by HUD. Fieldwork revealed that, because the development must hire contractors to perform maintenance, it incurs higher administrative costs. As a result, the analyst put the project's per-unit cost at $723. By contrast, Boston's Marshfield Group Home was allotted $581 per unit, compared with actual operating costs of only $379 per unit. Fieldwork determined its operating expenses to be $362, in part because the development's 24-hour staff are funded by the Massachusetts Department of Mental Health and often take responsibility for the administrative, operating, and other functions that are contracted out at a development like Prospect Street.

Mast says that although the study probably would not change the overall budget for PRAC, "to the extent that it helps us allocate our resources more efficiently, it could mean that for any given budget we might be able to target funds to where they're needed the most."


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Aging in Place: Cityscape Symposium Emphasizes Collaborative Partnerships

Most people over 50 plan on living at home as they age; according to a 2005 AARP survey, 89 percent of respondents prefer to age in place rather than move to an institutional setting. But aging in place, as the growing live-at-home movement is known, does not occur passively. A collaboration of support systems, government agencies, caregivers, architects, and others must lay the groundwork if the elderly are to remain independent. A recent issue of Cityscape presents five symposium papers that take an in-depth look at the economic, social, and practical aspects of aging in place in the context of affordable housing.

A group of people collaborating on how to provide supportive services to aging residents of a neighborhood.Aging in place appeals to policymakers, who see it as a way to lower healthcare costs; it promises fewer trips to the emergency room and fewer moves into nursing homes. "Assessing the Quality of Care Found in Affordable Clustered Housing-Care Arrangements: Key to Informing Public Policy" (by Golant, Parsons, and Boling) examines the validity of this premise in the context of housing intentionally adapted to promote aging in place. The report finds that research evaluating the cost-effectiveness of support services needed for aging in place lacks residents' health data. Only with these data, the authors conclude, "will we be able to fully define and evaluate housing service outcomes that can support policy change."

Unlike housing adapted for aging in place, a naturally occurring retirement community (NORC) is not intentionally planned to accommodate the elderly, who predominate there. "Integrating Community Services Within a NORC: The Park La Brea Experience" (Enguidanos, Pynoos, Siciliano, Diepenbroc, and Alexman) is a case study of an effort by the Jewish Family Service (JFS) of Los Angeles to develop supportive services that one NORC needed to help its residents age in place. JFS found it required time to win the trust of management and residents, but was eventually able to determine the needs of residents, develop flexible services, engage resident participation, and reach many seniors who had previously been underserved. The use of trained volunteers was especially effective in expanding the program's reach, but a paid professional staff able to secure funding support, to maintain volunteers, and to coordinate with health and community service organizations was critical to program continuity. An elderly man on an exercise bike.

"Health Indicators: A Proactive and Systematic Approach to Healthy Aging" (Vladeck, Segel, Oberlink, Gursen, and Rudin) takes a broader look at NORCs than a single case study can provide, describing "a data-driven, community-based, collaborative effort" at 34 naturally occurring low- and moderate-income communities with a significant population of elderly residents. This initiative provides a systematic way for providers to help at-risk aging residents better manage their health care through prevention. Launched three years ago in New York City, this project gives practitioners the tools and knowledge to engage in evidence-based community healthcare practices. The model enables aging services, health care providers, and clients to cooperate to achieve shared goals.

These papers demonstrate the importance of bringing together a spectrum of services to meet the varied requirements of the elderly — a need highlighted in the symposium's two other papers, "Health-Related Needs Assessment of Older Residents in Subsidized Housing" (Cotrell and Carder) and "Aging in Place Partnerships: A Training Program for Family Caregivers of Residents Living in Affordable Senior Housing" (Sanders, Stone, Meador, and Parker)."

The latter explores how to maximize the capacity of family caregivers in this complex equation. Collecting health and functioning information from family members, service coordinators, and low- and very low-income elderly residents of three HUD-subsidized properties, researchers ascertained how families and service coordinators might collaborate in interventions. Subsequent training designed for family caregivers of affordable senior housing residents made them more aware of available services and resources, enhanced their skills in adapting to and helping their family member adjust to declining independence, reinforced the importance of communication between caregiver and service coordinator, and provided an opportunity to network with other caregivers.

The former details the development of a multidimensional needs assessment used in planning targeted services for 130 elderly residents of a Section 8 assisted housing facility. Resident interviews found "a heterogeneous population of older adults whose health status varied considerably, especially among the four different ethnic and language groups living in the building." Most were not at immediate risk for hospitalization or nursing home admissions, which led the housing sponsor to secure partnerships with experts in gerontology and geriatric services.

The research presented in this Cityscape symposium demonstrates the complexity inherent in what otherwise appears to be a straightforward win-win situation for the elderly and policymakers. As these papers show, the benefits of aging in place, which appear obvious but are difficult to prove, cannot be achieved without a great deal of thoughtful planning about exactly what services are required and the mechanisms to put them in place.


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Crime: How do Mobile Home Communities Compare?

The most recent edition of Cityscape, PD&R's journal of policy development and research, explores crime rates in mobile home communities in Omaha, Nebraska to determine how violent and property crime rates in these neighborhoods compare with other residential areas. A typical mobile home community.

In designing the study, William P. McCarty, assistant professor of Criminology, Law, and Justice at the University of Illinois-Chicago, reviewed the history of mobile home communities, public perceptions of mobile homes and their inhabitants, and the demographics of mobile home developments. Literature on the spatial distribution of crime, social disorganization, crime patterns in urban neighborhoods, and zoning practices related to mobile home locations were also consulted.

To identify violent and property crime rates in mobile home communities, McCarty analyzed police reports from 2000 to 2002 in Omaha, Nebraska. The analysis compared the violent crime (homicides, assaults, sexual assaults, and robberies) and property crime (burglaries and auto theft) rates of 15 mobile home communities with those of adjacent and residential areas through an examination of census blocks. The analysis also considered other variables that might explain any significant differences between mobile home communities and adjacent neighborhoods, such as median income, racial diversity, homeownership, and household composition.

Finding no statistically significant difference in violent and property crime rates in mobile home parks compared to other neighborhoods, McCarty concluded that a higher percentage of owner-occupied homes in blocks containing mobile home communities in Omaha might explain why the mobile home community crime rates did not differ from other neighborhoods. Although McCarty states that his findings in Omaha may not generalize to the entire United States, he suggests that municipalities should not exclude this affordable housing option due to fears of escalated crime rates.


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A Spotlight on Data

New data sources, low-profile data, and techniques for using older data sets are always of interest to researchers in housing and urban studies, as are discussions of problems with data interpretation or manipulation and their solutions. Such topics are regularly highlighted in the Data Shop section of Cityscape from HUD's Office of Policy Development and Research.

People reviewing a data presentation.The most recent Data Shop explores the usefulness of the biennial Health and Retirement Study to housing researchers. Since 1992, this study has collected information from a nationally representative sample of Americans over 50. Sponsored by the National Institute on Aging, the study is a rich source of data on health, work and retirement, income and wealth, and family characteristics and intergenerational transfers (of time, money, and residence). Those interested in housing will find trend data on housing values, home prices, living situations, and the characteristics of those who buy and sell homes.

If you have an idea for an applied, data-centric note of no more than 3,000 words, you can send a one-paragraph abstract to david.a.vandenbroucke@hud.gov for consideration.


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