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No Affordable Housing for Students…A Precursor for Student Loan Debt?

Posted on: February 6th, 2014 by Tricia Gallagher No Comments

Sign that reads No Students Allowed

Recently, my son and I went to look for apartments near the University of Florida in Gainesville. Since we live near Sarasota, a 3 ½ hour drive away, we decided to contact as many apartment communities as we could in order to filter out the ones that met our very limited budget. We called nearly 20 different places before we finally narrowed it down to a select few. One particular property had a reasonable rate advertised, so we made an appointment, and we were on our way. Upon our arrival, I asked to see the price sheet for their market rate apartments. The leasing agent informed us that since the property was 100% Low Income Housing Tax Credit, there were no market rate apartments available.

Working in the affordable housing industry, I knew we had wasted 3 ½ hours, because my son, as a full-time student, did not qualify for income-based affordable housing under the housing credit program. The question that popped into my head at that very moment however was, “Why not? Why don’t students qualify for affordable housing? Don’t most students need affordable housing?”

can for collecting donations with the words starving student

Unfortunately, my son has to take out student loans to pay for his tuition and living expenses, because I am not wealthy enough to afford to pay for everything, yet I’m not poor enough to where he or I could qualify for any type of federal grants or assistance for his tuition or living expenses.

Recently, there have been many articles, lectures, and political discussions on the subject of the student loan debt in the U.S. far surpassing the national credit card debt by a landslide.

According to the Consumer Financial Protection Bureau,

“Student loan debt has reached a new milestone, crossing the $1.2 trillion mark — $1 trillion of that in federal student loan debt….”

Forbes Magazine states,

“Two-thirds…of students graduating from American colleges and universities are graduating with some level of debt…one in 10 graduates accumulates more than $40,000…It’s a negative sum game for both student-borrowers and the economy…”

students at graduation with the amount of student loan debt written on their caps

So, wouldn’t it appear to be a viable solution, for at least a portion of the “student debt” problem, to develop programs specifically geared toward affordable housing for students? Wouldn’t that directly effect the amount of loan money a student would have to borrow? In Gainesville, Florida, for example, the average cost to rent a one bedroom apartment is approximately $700 per month, or $8,400 per year, excluding utilities and other expenses, on top of a tuition that is approximately $6,500 per year (in state). How then is the lack of affordable housing not contributing to the ever-increasing issue of student loan debt?

There are some that would argue that, “If students qualified for affordable housing, then everybody would qualify for affordable housing.” But, isn’t that kind of the point? The need for affordable housing, without question, exists more than ever; so, why not appropriate funds from certain tax credit programs to go towards affordable student housing? Aren’t those students people who, on average, would contribute more to our economy with better paying jobs? You decide…

Granny Pods, an Affordable Elderly Housing Substitute?

Posted on: December 3rd, 2013 by Tricia Gallagher 9 Comments

With rising health care costs and the Great Recession still very much intact, the need for affordable senior housing is on a steep up rise.

Multiple countries within the United Kingdom, as well as Japan, Korea, Australia, and Brazil are faced with high retiree to worker ratios and those numbers are anticipated to keep rising astronomically.  In the United States, children of the baby boomer generation are beginning to see the same issues developing.  As a result, Americans are finding it increasingly difficult to secure affordable living accommodations that ensure proper care and safekeeping for their elderly family members.

According to the AARP,

“Although the number of older adults in the United States continues to grow, the absolute number of certified nursing home residents has slowly but steadily declined since 2000…”

Nursing homes do offer sustainability, skilled care, and around-the-clock supervision for our loved ones.  But, who besides the rich can afford them?  You might as well forget about having anything left over out of any savings or retirement accounts, because Medicare will not cover anything until after our loved ones exhaust all of their own financial resources – even then Medicare is limited as to what it will cover.  Furthermore, it can be extremely disheartening, not only for us, but for our loved ones as well, to lose that sense of autonomy and be far away from family.

To combat this problem, a new trend has developed overseas and is becoming increasingly popular here in the United States as well.  “Transitional homes,” also referred to as “Granny Pods,” are being manufactured to offer families an alternative to placing their loved ones into a senior care facility.  Newly established housing manufacturers across the country are producing these micro-apartments, assisted-dwelling units, or “Granny Pods” that can be constructed and added to an existing property, usually in the back yard.  These micro-homes are designed and equipped specifically for the elderly to avoid immediately entering into a facility or moving into an adult child’s home.  This offers seniors the ability to maintain their independence while still remaining close to their family.

There are some who believe Granny Pods to be too costly for the average person, and thus not an affordable alternative to a senior living facility or nursing home; however, if you take a look at the cost of both, you may decide otherwise.

The purchase price of Granny Pods typically ranges on average between $40,000 and $125,000.  Some manufacturers also offer the option to sell it back upon completion of use, depending on the type of unit and on the mobility of the home.  One company located here in the Tampa Bay area, Home Care Suites, offers assisted dwelling units for purchase starting at $42,880.00.  They also offer financing which starts around $800 per month ($9,600/yr.).  To some that may seem like a small fortune to fork over for a small dwelling unit.  However it may be noteworthy to compare the benefit of having your family member at arm’s length, in a home that offers independence with ready equipped ADA compliant features specifically designed for their personal needs, versus putting them into a hospital-like environment away from their family.

An assisted-living one-bedroom apartment costs on average about $35,000 annually whereas semi-private nursing averages approximately $79,000 per year, and a private nursing home costs about $85,000 per year.  Unlike the granny pod, these options are recurring annual costs that may otherwise deplete all the savings our loved ones have worked for their entire lives. The chart below further illustrates the difference in price between the choices.

Granny Pod one time fee $40, 000.00 Private Nursing home annual average $90,000.00 Semi-private Nursing home annual average $85,000.00 Assisted living one bed room annual average $50, 000.00

Granny Pods may take off a little slower here in the United States, as we are not as accustomed as other countries are in taking care of our elderly under our own roofs. However, this may change very soon given the economy and the lack of affordable senior housing.  Perhaps somewhere in the not so distant future local and/or federal government programs may find a way to subsidize this type of housing with either tax incentives, government-backed funds or both.  It could prove to be a pleasant alternative to placing the elderly into nursing homes or assisted living facilities by keeping our loved ones at home while placing less of a burden on their adult children.

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