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When Mary Robinson suffered several serious health problems a number of years ago, she moved from Atlanta to her native Boston to be close to her son and sister.
"I had two strokes and a heart attack," says Ms. Robinson, who had been living in Atlanta for the last 20 years. "So I needed some assistance in living."
Not long after returning to Boston, she learned about the planned opening of the Ruggles Affordable Assisted Living Community, a 43-unit home for frail elders located just outside of Dudley Square in the Roxbury section of Boston.
"One of my friends was telling me they had assisted living here at the old Lafayette School," says Ms. Robinson. "It seemed interesting and sentimental, so I decided I'd take a look at it."
Sentimental, she notes, because she had attended the Lafayette School for several years in the early 1940s and had lived just a few blocks away from it.
Opened in the fall of 2001, Ruggles Affordable Assisted Living is home to Ms. Robinson and other elders who require daily assistance with their health but do not want to live in a nursing home.
The facility is the brainchild of Pamela Shea, president and founder of New Communities Services; a nonprofit developer of affordable housing and other programs for elders, and Peter Roth, president of New Atlantic Properties, a for-profit developer of affordable housing.
Ms. Shea and Mr. Roth had earlier collaborated on several projects and the idea of developing an affordable assisted-living development in Boston appealed to both of them, especially since almost all assisted-living facilities in the state concentrate on providing market-rate housing.
After years of planning, their vision was finally realized. In the fall of 2001, Boston saw the opening of a much needed but rare facility: an assisted-living development in which every unit is affordable.
Ms. Shea says she realized there was a gap in services for low-income elders through her work with the elderly. "People ended up in nursing homes when they needed a little more care because there was no assisted housing for low income people," she says. "The primary purpose of Ruggles was to try and provide that continuum of care."
Although it wasn't easy for them to find a suitable site, Ms. Shea and Mr. Roth eventually discovered the old Lafayette School, an elementary school that had been closed years ago and was owned by a bankrupt mechanical contractor. "We were able to work through the process and gain control of the building through one of the creditors," says Mr. Roth.
To make such an affordable facility possible, the developers had to make sure that the construction stage of development was fully capitalized through public debt and equity. "The way we would not have debt that had to be serviced in the operating phase of the project," says Mr. Roth.
To get the initiative up and running, the developers pieced together some creative financing from a patchwork of affordable-housing programs, including Low Income Housing Tax Credits, Boston Community Development Block Grant funds, HOME funds, and HIF funds.
Another key ingredient was a $250,000 Affordable Housing Program (AHP) grant from the Federal Home Loan Bank of Boston.
"It takes a tremendous amount of resources to do these projects the right way, and the AHP program oftentimes is the last piece that fills the gap to make a project work," says Mr. Roth.
"The Federal Home Loan Bank was perfect," adds Pamela Feingold, senior vice president / community development lending, for member Wainwright Bank & Trust Company, which applied for the AHP grant on behalf of the initiative and also purchased the Low Income Housing Tax Credits. "It allowed us to close the deal and get all the financing sources."
Because Low Income Housing Tax Credits were involved, the developers were under pressure to have the financing in place by a specified date. "We were under the gun to find the money, and the Federal Home Loan Bank of Boston allowed us to do that," says Ms. Feingold. "We've really relied very heavily on it. It's been a great partnership."
But locating financing to get the facility up and running wasn't the developers' only challenge. Because the facility isn't relying on market-rate units to support the cost of building affordable ones, they had to ensure that long-term funding would be available.
In market-rate assisted-living facilities, the residents or their families either have enough income to pay for the services or else have health insurance that covers such expenses. "But for low-income people, we have to put together a whole bunch of programs, some of which fit and some of which don't," explains Ms. Shea. "It's really complicated - more complicated than we expected."
Because of this complexity, Ms. Shea believes the financial-management structure needs to be fine-tuned. "If what Medicaid is talking about is keeping people in the community, then they're going to have to figure out a way to have a payment mechanism to do that," she says.
Elisabeth Babcock, president and CEO of the Committee to End Elder Homelessness, a development partner and the manager of the facility, notes that nursing homes are more expensive to operate because they're licensed as health-care facilities, which require higher payments from Medicaid and Medicare to cover the cost of more sophisticated equipment and resources.
Ms. Babcock points out that 48 percent of Ruggles' residents were living in more costly nursing homes before their arrival at the Roxbury facility. Those residents neither wanted nor needed to be in a nursing home but were living there because there wasn't an alternative. Ruggles, she adds, provides a more desirable and cost-effective alternative.
We're doing this very much as a pilot," she says. "We're really starting to talk with legislators and administrators about the possibility of replicating this, because it represents such a significant win in Medicaid savings to the state." ^ back to top ^
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