NJ Hospitals Building Affordable Housing with Partnerships and State Funding

Photo from Shelterforce and by flickr user Paterson Great Falls, CC BY-ND 2.0

New Affordable Homes Provide Affordable Housing, Supportive Housing, and Housing for Hospital Staff

Last week, Shelterforce, highlighted a new initiative with hospitals in New Jersey that is creating affordable housing.

The article, “NJ Pays Hospitals to Build Affordable Housing,” reports on the New Jersey Housing Mortgage and Finance Agency (NJHMFA)’s first of its kind partnership with hospitals around the state to develop affordable housing. Monarch Housing reported on the Hospital Partnership Subsidy Program through an August 2019 interview with NJHMFA Executive Director Chuck Richman.

These new housing and hospital partnerships will meet a variety of affordable housing needs in local communities by creating supportive housing apartments for the hospital’s frequent users, affordable housing and housing in the hospitals’ neighborhoods for hospital staff. NJHMFA’s initiative with hospitals addresses social determinants of health that affect hospitals’ patients and neighbors.

To date, six New Jersey hospital systems are part of the initiative to develop housing and the hope is that the initiative will expand. St. Joseph’s University Medical Center which is partnering with New Jersey Community Development Capital (NJCDC) in Paterson is the furthest along in its plans for development. It is anticipated that upon receiving formal approval from NJHMFA, the project consisting of 71 apartments will be completed by the middle of 2021. In an August 2019, blog post Monarch Housing spoke with NJCDC’s Founder & CEO Bob Gurasci who gave an update on the project in Paterson.

Charles Richman has championed the hospital and housing partnerships based on past successes in this area when he was the commissioner of the new Jersey Department of Community Affairs (DCA.)

How are these housing partnerships funded? NJHMFA provides a few types of capital: subsidies to fill the funding gaps and permanent mortgages to make the projects work. NJHMFA also helps the hospitals apply for tax credits.

The agency will give up to $4 million to each hospital that would like to develop affordable housing. On their end, the hospitals must match the funding from NJHMFA and provide the land or building for the project. The new apartments are to be affordable to families whose household income is 80% of the area median income (AMI) and there must also be apartments affordable to households that earn below 50% of AMI.

The housing created through these partnerships addresses a pressing problem faced by all hospitals and their emergency departments – how to serve the frequent users of their services? The housing development must set aside 10-15 apartments with supportive services or individuals that the hospitals have identified as frequent users.

The incentive for including these supportive housing apartments new developments is that, hopefully hospitals will see reduced hospital and emergency department for these individuals. Once their lives are stabilized, the expectation is that their urgent healthcare costs will decrease.

The New Jersey Hospital Association (NJHA) is an informal partner in the partnership program. NJHA contracted with the Corporation for Supportive Housing (CSH) to assist hospitals and specifically in understanding the supportive housing and services component of the project partnerships.

Other states are reaching out to Charles Richman at NJHMFA to learn more about New Jersey’s hospital partnership model.