Testimony for
Commission on Affordable Housing and Health Facility Needs for Seniors
Hearing July 30, 2001

Submitted by J. Kenneth Pagano, President
Essex Plaza Management Associates, Newark N.J.

Ladies and Gentlemen of the Commission on Affordable Housing and Health Facility Needs for Seniors in the 21 st Century, I am honored to be here to share my first hand experience with you in dealing with seniors in particular seniors in the low to moderate income housing sector. Today I am here representing both Essex Plaza Management Associates and the National Affordable Housing Management Association.

Seniors have found comfort and happiness in their Golden years. They have settled into a comfortable routine. In recent years however, this routine has been disrupted by cuts in services that they had become accustomed to. City and County nutrition centers have either closed or been consolidated and the supervision of home health services leaves a lot to be desired. Aides who originally were charged with assisting seniors with day to day tasks have become companions who are doing less physical work. The seniors are unable to care for their apartments and themselves and the aides have become all too complacent in the performance of their tasks, as Medicare Reimbursement rates have been reduced and many firms have had significantly harder times recruiting and retaining dedicated and motivated staff.

To add to the problems that seniors must deal with; the US Department of Housing and Urban Development has instituted both the Mark to Market Program, and revised Contract Renewal processes, with notice requirements which serve to further instill fear and confusion as to their future. In Mark to Market; HUD has commissioned tenant advocacy groups to "assist the seniors in understanding the program." What is occurring is that these well intentioned people, in an attempt to cover all the possibilities, end up worrying the seniors even further about their future. This problem is repeated each year with the notice requirements by HUD announcing the expiration of the contract and the renewal being subject to funding availability.

While the Mark to Market Program has served to reduce excessive rents, the process has eliminated many services that were added to address the needs of seniors. In implementing the provisions of MAHRA, the Office of Multifamily Housing Assistance Restructuring has adopted underwriting standards that are very strict and limit or eliminate funding for many of the social service programs we had put in place to assist aging in place Seniors.

The move to shorter term contracts has been very disruptive for our senior residents. In the last year HUD has made provisions to allow the HUB offices to offer longer term renewal contracts. While these longer term contracts are issued as an exception, we feel that it should become the norm for senior housing.

In our organization's experience a majority of the tenants moved into our property at it's inception some 23 years ago at age 62 or greater and are now 85 and older. The services that they have grown accustomed to in some instances are just not enough for their individual needs to remain independent. We have found that with other government cuts, Senior Protective Services is no longer willing to accept court appointment as guardian for seniors who refuse to take care of themselves or whose family will not assist them. We have been faced with a conflict between the legal system which is trying to protect tenancy rights and seniors who have reached the point that they are unable to make decisions for themselves.

A case in point is Mr. Green who has been a tenant at our property since 1995. Mr. Green's family has been contacted concerning several problems related to his health and his tenancy. They have ignored the requests and have left Mr. Green on his own. Mr. Green has been hospitalized several times fora variety of health problems. Mr. Green, however, despite the hospitals recommendation to be moved to a nursing home refuses to do so. Mr. Green has taken up a new hobby, he goes out into the neighborhood each day and evening and returns with trash taken from the garbage cans in the neighborhood. Although taken to court on several occasions and despite the requests of his fellow tenants the court has refused to order his removal. They have instead insisted that the landlord assume the responsibility of cleaning his apartment. Senior Protective Services and Legal Aid have not agreed on the appointment of a guardian and only offer to help find some funding to assist in the cost of cleaning up the apartment. To date they have provided no funds. Mr. Green has been enrolled in several different programs and has "fired" any home aid or visiting nurse the we have been able to have the City Health Department assign to him. We find ourselves in a very difficult position, the changes to state and federally funded programs has limited their ability to assist Mr. Green, and the local courts will not permit us to terminate his tenancy though it is clear he really should not live in our property any longer. Owners and Operators are increasingly finding themselves “stuck in the middle” with no resources, and little ability to operate the property as it should be operated.

Our facility has been fortunate, in that from inception, we were able to provide space to a doctor who is on the premises four days a week. The practice serves the residents of the building and now the neighborhood. The space which originally given as an inducement to obtain the services is now expanded to a full practice with half of it's patients coming from the tenants in the building. The doctor's office is now paying a use fee to the building to assist in the cut backs which came with the Mark to Market program. As you know low income elderly are one of the most under served groups medically in this country. We work hard to expand health care opportunities, but again in the tight funding environment this is much more difficult than has been the case previously.

In order to address the needs of many senior tenants we have been able to obtain the services of an Adult Medical Day Care operator. The program pays a use fee to the building that is used to offset some of the Mark to Market cuts and provides a program for those tenants that qualify for Medicaid six days a week free of charge. The program offers two meals a day, organized programs of physical exercise. games, social activities, nursing, dietary, entertainment, eye care, shopping trips, hair care, pharmacy services and transportation services. The program is free to the participants and is funded by the Federal Government and licensed and supervised through the New Jersey Department of Health, the reimbursement rate is $52.68 a day. The program employs licensed nursing, social service, administrator, medical personnel and a medical director. It provides to seniors and adults the essentials they need to remain independent.

While the Adult Medical Daycare Program is very successful in our property and other areas in New Jersey. The program has been almost non existent in New York. We have contacted several potential operators in New York. We are advised that licensing under the program is New York is currently frozen and all new licenses would have to be done as an affiliate of either a Hospital or Nursing Home. While the actual reason may vary we cannot help but wonder why a program that is so successful in the state of New Jersey cannot be duplicated in another. The people that are doing without are those individuals that need the services the most.

A program that we feel is essential in addressing the needs of senior is the Assisted Living service program. The program is administered by the state of New Jersey and is clearly a needed one for those on Medicare who wish to remain in their apartments. What has frustrated us about this program is the wide spread interpretation of what medical conditions must be satisfied to qualify for the program? It has been our experience that the approval process may be to restrictive for those that can least afford it. The criteria states that the participant must meet nursing home care standards. A nursing home in New Jersey receives reimbursement rates of $150.00 per day and up this program reimburses the provider with $40.00 per day. It remains to the discretion of the State health Department Staff the level and type of care that is required for each participant. For example will an individual who needs physical therapy be required to receive individual treatment or will group physical therapy suffice? No allowance is made for the level of reimbursement.

Our own experience in this program has been frustrating. We hired a licensed operator who worked with the Health Department in processing those tenants in the building that appeared to be in most need of the program. After initially processing a number of residents the number of approvals by the state seemed small. We were advised that as a result of interviews conducted by the State personnel the potential participants withdrew from the program consideration. After questioning the issue we were able, though Congressman Robert Menedez and the Health Department of the City of Newark to arrange for a meeting with the State Department of Health to work out a new approach in evaluating potential participants in the program. To this end we hired at our own expense, a nurse to do the evaluations and coordinate the State and operators processing of potential participants. We have been at this process for about three months now and while the State has evaluated over 40 potential participants and has verbally advised that they will qualify, they have not advised us of the individual treatment programs that they wish for each of the participants. We therefore have been unable to establish whether or not the $40.00 per day will be sufficient to provide he services being requested.

The financial portion of the approval process requires that the potential participants provide documentation which includes 36 months worth of bank statements. We are currently working with local banks to waive the fees associated with reproducing these records at a cost of $5.00 per page. We have also planned a meeting with the State Health Department to see if any alternative means of verification would be acceptable. We do not understand how similar obstacles were not encountered in Ocean and Monmouth Counties, but were encountered in Essex County. We are committed to bring additional services to our residents, but find that the barriers to doing so are significant, costly to overcome, and in nearly all cases our costs for the administration and initiation of these services are not recoverable. In properties with sufficient cash flow that can still be done, but there are a number of properties where it is not economically feasible.

We have initiated a class on Computer Skills for our seniors. Although HUD now refers to theprogram as Technology Centers and encourages them in all of their senior and family developments. the success or failure of these initiatives seems to be in having the dollars necessary to fund the outfitting of the center, or the ability to attract contributions to fund the needed equipment and teaching staff. While our senior program is in it's first sessions we have already received requests from the seniors for Internet access. We will be working with the local cable company in an effort to get the services donated. Here again, our ability to offer additional services that are badly needed is compromised by the rent structure that has been adopted in recent years. In the last three HUD Budget Cycles there have been some funds, generally amounting to less than $300 million in a budget of $15 billion to enrich services at both purpose designed, and naturally occurring elderly communities. These efforts are good, but by no means do they begin to address the challenges we face.

In a related area, most of the properties that have become NORC’s were designed and built long before the adoption of either the Fair Housing Accessability Standards in 1989 or the Americans with Disabilities Act in 1992. Generally speaking we have little to no available funding for adapting units, common areas, and other facilities to the needs of older and handicapped residents. The partnerships that own these buildings are old, are now generating phantom income which taxes the partners on money they never receive, and are unable to raise new capital easily. A grant or loan program to allow for some accessability work is sorely needed.

While I have attempted to paint a picture of what some of the problems we have encountered are and the methods we have used to address them, I would like to invite you to tour our facility and see what really can be done with the cooperation of the Federal, State and private owners in delivering a quality place to live for seniors in their Golden Years.