‘For Christmas, their present is a 5% rent increase’: At Heritage Park, senior housing becomes less affordable.
on December 20, 2023
Elsa Stevens was so stressed about an impending rent increase at her senior housing complex in Richmond that she debated whether she should get a costly CT scan that her doctor had recommended.
She did go through with the scan, which eased one worry. But the rent increase at Heritage Park at Hilltop, which offers affordable senior housing, has upset her holidays.
“For Christmas, their present is a 5% rent increase,” said Stevens, who has lived at Heritage Park with her husband for 10 years.
USA Properties Fund, the for-profit ownership group of the 192-unit complex, recently sent notices to Stevens and her neighbors that their rent would be going up Dec. 1 due to rising costs.
The owner, who built the property in 2000 leveraging a federal Low Income Housing Tax Credit, is within its legal rights to raise the rent. Under the tax credit, private development firms build affordable housing but can still turn a profit. In return, the buildings are subject to a rent cap.
USA Properties Fund, which is based in Roseville, California, owns only Heritage Park in Richmond, but it is a relative juggernaut in affordable housing development on the West Coast. With 90 buildings and 15 under construction in California, Oregon and Nevada, it is the 15th largest affordable housing developer in the nation, and the largest in California.
Increases outpace income
At Heritage Park, USA Properties is not allowed to charge more than $1,601 for a one-bedroom apartment. In an emailed response, representatives for the ownership group noted that average rent on a one-bedroom apartment will be $1,432 after the rent increase. Some residents receive government subsidies that help them pay rent, but many are subject to the full price.
Because rent adjustments are not required to be tied to a change in resident income, rent increases can outpace income. The result, according to a Richmond Rent Program report, can be “potential displacement or significant financial hardship.”
Richmond Councilmember Melvin Willis, who recently spoke to the seniors at Heritage Park, said that this is not the first time residents have expressed concerns. In 2018, USA Properties announced a rent increase of over 10%, which was allowable under the tax credit program. Still, city officials were concerned that the low-income seniors at Heritage Park would experience rent shock, so they negotiated with USA Properties to limit the increase to 5%.
This time Willis and the council have little recourse. Because the property was built after 1995, it is not subject to the rent control regulations included in Measure P, which was passed by Richmond voters in 2022 to cap yearly increases at 3%.
USA Properties stressed this in the letter announcing the rent increase.
“Should you wish to discuss the rent increase or let us know of any concerns you may have, we urge you to reach out to us rather than the local City/County/State government agencies as they are not responsible for the rent increase,” the notice read.
“Many of us are on a fixed income and very poor,” said Julia Keene. Should rent keep going up, “a lot of us are going to end up homeless,” she added.
“Every time you turn around, they’re going up on the rent,” said Myrtle Jones, who approached the podium with the help of a walker.
Their central message was clear. If rent keeps going up, and costs get exponentially higher for tenants on fixed incomes, at some point, the apartments will no longer be affordable.
‘Where is the compassion?’
USA Properties declined to comment on the rent increase.
It comes as the Social Security cost-of-living adjustment continues to fluctuate. Over the last decade, COLA has averaged 2.9% per year. In 2018, when USA Properties proposed the 10% hike, Social Security payments only increased 2.8%. Next year, COLA will be 3.2%, not enough to cover the current rent increase.
Seniors at Heritage Park are already living on much less than the average Richmond household. According to a Heritage Park at Hilltop monitoring report from 2016-2017, average income in the building was $23,289. Median household income in Richmond during that time was around $79,000, the U.S. census shows.
Under the federal tax credit program, maximum allowable rent at Heritage Park isn’t based on Richmond but on area median income that includes wealthier parts of Contra Costa and Alameda counties, putting Heritage Park residents at a disadvantage.
Residents say the increase is particularly painful during the holiday season.
“What is merry about me not knowing if I’m going to have enough food to eat the whole month?” said resident Elda Fontenot, “Where is the compassion?”
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