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High-rise
rent boost hits seniors in wallet
By
Melissa Harris
Sentinel
, August 6, 2003
 Placida
Torres, 71, began sewing undergarments in a New York City factory when she
was 16 years old.
The young Puerto Rican spent $20 per month on a furnished apartment in the
Bronx, or 18 percent of her income.
Today her standard of living has plummeted. She receives $550 per month in
Social Security benefits and spends almost half, $265, on a studio
apartment at Magnolia Towers on East Anderson Street in downtown Orlando.
Now the U.S. Department of Housing and Urban Development is reviewing a
proposed $35 rent increase that she and dozens of her elderly neighbors
say will price them out of the building.
The nonprofit Magnolia Towers Inc., which only serves low-income seniors,
has hit hard times. After asking HUD for the rent increase in early July,
it turned over management of the building to Westminster Services, a
larger nonprofit organization.
"Magnolia's board should have been asking for small rent increases
all along," said Kelley Keeler, a HUD spokeswoman. "Its board
was not exercising as much control as it should have."
Eight of Magnolia's 10 board members have resigned and been replaced
during the last month. The building's reserve fund, which is supposed to
get a boost every month, has not been fed since early 2003.
The previous board was unwilling to levy a rent increase on its vulnerable
clientele, said James Emerson, chief executive of Westminster Services.
"The board put its [charitable] mission ahead of common-sense
business principles," Emerson said. "They were trying to be
kind, but now residents have got to pay it."
James Snellings, the former board chairman, deferred all calls to
Westminster.
Towers face repairs
Magnolia also has fallen victim to rising insurance premiums for
facilities that serve independent seniors -- those who do not need to live
in an assisted-living facility -- as it also faces $750,000 in repairs to
the more than 30-year-old building.
In the world of senior citizen facilities, Magnolia's cream-colored
14-story, 156-unit building could be compared with an independent retailer
struggling to survive next to a Wal-Mart Supercenter. Magnolia employs
only eight people, while Westminster employs 2,600 at 19 facilities
statewide, including two in the Orlando area.
Emerson says Magnolia's financial woes are common among recipients of
older HUD loans that fund small corporations.
"Larger companies are able to reallocate resources and absorb costs,
while a stand-alone company goes under," said Rhanda McKown of the
Florida Association of Homes for the Aging.
She also noted that Florida has higher insurance premiums than many
states.
But the only balance sheet Torres and her neighbors care about is their
monthly budgets.
"Some days I eat rice and beans, the next day bread and soup,"
Torres says. "I have to pay rent and my telephone and insurance
bills. I can't live on $550 a month."
Juanita Kelly, 72, and five neighbors sit at her dining room table Tuesday
morning -- some looking over their medical bills while others bemoaned
broken stovetops and other problems.
Kelly pulls out a 1-inch maroon three-ring binder filled with
correspondence with HUD and Magnolia Towers' management requesting that
rents only go up $15 for a studio and $20 for a one-bedroom.
Then she pulls out $840 in unpaid medical bills from a February stay at
Orlando Regional Medical Center for gall bladder problems. She has no
savings in the bank.
'Our right to protest'
"This is our right to protest this increase," says Kelly,
who was among 22 residents who signed a petition that was mailed to HUD
and local politicians.
Emerson said staff will help residents who cannot afford the increase.
He hopes to get them placed in Section 8 housing, a HUD-subsidized program
that caps rent bills at 30 percent of an applicant's income minus medical
expenses. There are at least six such facilities for seniors in the
downtown area.
"Their rents could actually go down if they were properly placed in a
project meeting their income levels," Emerson said.
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© 2002 Global Action on Aging
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