With its ballooning population of residents 60 years of age and older, New Jersey has become fertile ground for all types of housing for the elderly, especially assisted-living residences, which offer apartment living with meals, social services and personal care.
As of January, 9,671 such units in 113 projects have been or are being built. Some 28,908 more units in 326 projects are planned, according to the state's Department of Health and Senior Service, which began licensing assisted-living developments four years ago.
Most of the projects, where the average age of tenants is 75, are being built for affluent residents. Now a small group of developers, with financial assistance from the state, are putting up projects in which at least 20 percent of the residences are reserved for people with annual incomes of 50 to 80 percent of an area's median income.
The financial help is coming primarily from two semi-autonomous state agencies -- the Housing and Mortgage Finance Agency and the Economic Development Authority. The agencies, using money raised through the sale of taxable and tax-exempt bonds, provide construction and/or permanent loans at or below market interest rates to developers.
''We are striving to insure older New Jerseyans have the opportunity to age in place and access to a residential setting with the services needed to maintain an independent lifestyle that is within their means, '' said Deborah De Santis, executive director of the housing finance agency.
In the three years since both agencies began offering such loans they have provided $270 million in financing for nearly 2,000 units in 20 projects either built or under way. At least 20 percent of the units will be for those with incomes below an area's median.
Some of the projects offer assisted-living residences with wings for residents with Alzheimer's disease or with independent-living units as well. Developers who accept Medicaid-eligible residents into their projects can also apply to the state for Medicaid vouchers for qualified residents -- those 65 or over with a monthly income of no more than $1,500. The vouchers, valued at $40 to $60 a day, help write down costs of services. The state has allocated 350 of the available 1,500 vouchers.
''The problem has been getting developers to accept the vouchers since the the state's first developers of assisted-living projects have been reaching out for the middle- to high-income elderly,'' said Andrew P. Aronson, director of longterm care licensing and certification at the state's Department of Health. ''The challenge is to spread the housing to people of all economic levels.''
To that end a bill was recently introduced that would require developers of licensed assisted-living residences to set aside 10 percent of their units for Medicaid-eligible residents. The measure is now in committees in both houses of the Legislature.
At the same time, the New Jersey Association of Health Care Facilities in Trenton, which along with other groups is concerned about overbuilding in the state, is advocating more government oversight. The aim, said Rick Abrams, president of the association, is to devise a system that makes sure that the growth of the assisted-living industry is both ''orderly and meets the demographic, geographic and economic needs of the state's elderly residents.''
One way to address those concerns, he said , would be to revise the state's way of reviewing assisted-living projects. The current 90-day review process primarily looks at a developer's record in running such properties.
A state commission has been formed to study the current review process and come up with recommendations in 10 months on whether to retain or modify it. Meanwhile, the housing finance agency, also worried that supply may be outpacing demand, is considering ways to direct the financing that it and other state agencies provide to avoid saturating areas, yet still encourage construction of assisted-living units affordable to people with modest incomes.
DEVELOPERS building such units believe they will fill a niche in the market. Yet, even with state assistance, getting the economics to work is difficult and often involves piecing together several different financing sources.
That is the case at the Clare Estate in Bordentown in Burlington County, where renovation and new construction are to get under way next month. The complex will have 105 assisted-living units, including 50 for people with Alzheimer's disease, in a restored 1885 monastery.
There will also be 36 independent-living units in nine buildings to be built on the grounds of the former nine-acre campus of the Sisters of Poor Clare, a Roman Catholic order of cloistered nuns. The complex is in the downtown, a designated historic district of the one-square-mile city.
Forty-six of the units will be affordable to residents whose incomes are 50 to 80 percent of the area's median income. The area's median income for a one-person household is $38,920 and $44,480 for a two-person household.
The state's housing finance agency provided $14.2 million in low-interest loans for the $16-million project, which also received $1.2 million in Federal tax credits for rehabilitation of historic structures. The rest came from private sources and the developer's own equity. The city also granted the project a 30-year real estate tax abatement, tying taxes to profits, rather than the value of the property.
''Nobody is paying attention to the affordable assisted-living market,'' said Christiana Foglio, president of Community Investment Strategies, of New Brunswick, the developer. ''We came up with a strategy that will produce low- and moderate-income units and keep the price of the market-rate units reasonable.''
The key, she said, is to use public financing to create the housing, allowing the market-rate units to, in effect, help subsidize the modest-income units.
Services also vary for the subsidized and unsubsidized units. While residents of both receive a general package, including three meals a day, help with bathing and dressing and transportation, those in the market-rate units get more medical-related assistance and weekly housekeeping.
The 55 units in the monastery, eight for low-income tenants, will range in size from 350 square feet for the private units to 450 square feet for shared ones. Monthly rents, including meals and services, are $463 for the modest-income units and $2,200 to $2,800 for the market-rate ones. The fees for the Alzheimer units will be $3,400 a month and include all services.
All of the independent-living units, with 600 square feet each, will be for modest-income residents and rent for $495 to $590 a month. Meals and services will be offered to residents for a yet to be determined fee, said Ms. Foglio.
She said she hoped to repeat the formula for other projects her company has planned in the state. One with 130 units, 61 of them for modest-income people, is in Cherry Hill.
In Edison, work is winding down on the Heritage at Clara Barton on 4.2 acres on Amboy Avenue, just west of Route 1. It has 27 independent-living units and 84 assisted-living units. Twenty percent of the latter are for residents earning no more than 50 percent of the area's median income, or $26,850 for a single person and $30,700 for a two-person household. All of the units will be in a renovated three-story former school built in the 20's and an interconnected new building of the same size.
The $17.6-million project is being developed by Pennrose Properties of Philadelphia using $12.2 million in financing from the state's Housing and Mortgage Finance Agency. Edison also provided a low-interest $500,000 loan and granted the project a tax abatement also tied to profits as opposed to property value.
''The market is totally untapped for these units,'' said Charles M. Lewis, assistant vice president at Pennrose, referring to subsidized apartments. ''But without the public financing we wouldn't be able to do it.'' The financing also helped lower rents on the market-rate units, he added.
The 84 assisted-living units, with 450 to 840 square feet, will be in the old school and the two upper floor of the new building. Residents will receive three meals a day, transportation, housekeeping and personal care. Rents for the modest-income units, including all services, will be $1,700 to $1,821. Some of those units will be made available to Medicaid-eligible people, said Mr. Lewis. Monthly rents for the market-rate units will be $2,400 to $3,400.
The fees for the 27 uniform-size independent-living units will be $765 to $984, he said, adding that the services would be available as options to those residents. Occupancy is to begin next month.
Originally published in the New York TImes, by Rachelle Garbarine.