Report details how to fund LGBTQ senior housing projects 

When New England’s first LGBTQ-affirming affordable senior housing development opened its doors in Boston’s Hyde Park neighborhood, it had a plethora of governmental and private funding sources to thank. Known as The Pryde, the 74-unit complex built inside a former public middle school cost more than $47 million and just marked being fully occupied in June.

“Financing affordable housing is enormously complicated,” noted LGBTQ Senior Housing Inc. Executive Director Gretchen Van Ness. “We had over 22 funding sources. They call it a funding stack for a reason.”

Across the country in San Francisco, the LGBTQ senior services provider Openhouse and its development partner, Mercy Housing, have been trying to secure state financing to jumpstart construction on 187-units of affordable housing aimed at LGBTQ seniors. It will be a short walk away from the former college campus they teamed up on turning into 119 units of below-market-rate apartments affirming of LGBTQ seniors along with offices, meeting rooms, and a community center for the nonprofit agency.

It has been five years since the city bought the property for the additional housing, and Openhouse and Mercy officials are hopeful they will secure state financing this December after Mercy’s application was rejected in the last two selection rounds. Once Mercy constructs the new building, Openhouse will provide services to the residents.

“We know at Openhouse that it takes housing and services to support our community members so they can age in place, enjoy improved health outcomes and continue to be a part of our community,” said interim Executive Director Vinny Eng, 42, a gay man who will depart later this year once incoming Executive Director Morey Riordan settles into the role.

Van Ness’s nonprofit teamed up with for-profit developer Pennrose in 2017 to bring the Massachusetts project to fruition. It wasn’t until 2022 that construction began, with the first residents welcomed into The Pryde in spring last year.

“It was very much an eye-opening experience,” recalled Van Ness, 67, who lives with her wife in the same neighborhood as The Pryde.

Eng and Van Ness both shared their experiences working on such LGBTQ senior housing projects with Milken Institute staff for their Financial Innovations Lab market landscape report “Models for Financing Affordable and LGBTQ+-Affirming Elder Housing at Scale” released in May. In partnership with national LGBTQ senior advocacy organization SAGE, the nonprofit think tank interviewed dozens of experts from LGBTQ service providers and housing developers to government officials and academics for the resulting 22-page document.

 
Five market-tested solutions
It lays out five market-tested solutions for how to finance LGBTQ senior-focused housing developments, such as social bonds, impact investment funds, and pay-for-performance contracts. Another idea calls for offering an LGBTQ+ elder housing prize to elicit ideas that can be funded and replicated in different communities across the country.

Also proposed are ways to incentivize private investment into such projects. Private equity firms could create a pooled fund to support LGBTQ+ affirming elder services or supportive financial institutions could offer preferential loan terms for LGBTQ senior welcoming housing projects, according to the report.

“Part of the challenge for why people don’t want to invest is they are terrified it is going to take 15 years when it should take two or three years,” said lead author Caitlin MacLean, a straight ally who is the managing director for innovative finance at the Milken Institute. “Realistically, it takes seven to eight years. But you are asking them to hold on to capital a long time until you get people into the doors and before you start charging rents or selling the units.”

Developers of such housing projects face a “chicken and the egg” challenge, noted MacLean, with government officials often wanting to see private fiscal support lined up before approving the developments or providing public financing for them, whereas a private investor may want to see shovels in the ground before they get involved.

MacLean said she and her co-authors heard from many project sponsors that “nobody wants to invest in us until we get told we can build.”

With many service providers stating how essential it is to provide onsite, wraparound services for residents of the housing developments, MacLean hopes the report prompts larger real estate firms and others to find “creative ways to fund the programming,” as “that is particularly challenging to fund upfront while you wait for Medicaid or Medicare reimbursement, if you ever get that.”

As for the prize competition idea, MacLean pointed to how where people live and how social their lives are can be determinants for their health outcomes and quality of life. It has been shown in various studies and surveys that isolation is a leading cause of negative health outcomes for seniors, especially for LGBTQ older adults who may be estranged from their biological families, don’t have children to care for them, and are without a significant partner to share their lives with as they age.

“A big challenge we are seeing is the need for better and smarter and more inclusive design of the housing itself that takes into account how people live and where they live. That is extremely important and nuanced,” said MacLean.

Of the five solutions detailed in the report, Eng and Van Ness both pointed to Solution 1 calling for social bonds to pay for both housing and services as the idea they liked best. Doing so is a cost-savings for the long-term, noted Eng, as it prevents unnecessary and costly visits by seniors to the emergency room for health care and keeps people in the community they have long called home.

“The report highlights the need to co-locate services with housing. That, at the core, is the solution we want to continue investing in,” said Eng. “We save money when we approach the care of our community members in this way. This is a front-end approach.”

All of the ideas highlighted by the Milken Institute are important to share with potential investors of LGBTQ senior housing projects, said Van Ness. Of the nearly 14 million LGBTQ+ Americans, 1.1 million are 65 years of age or older, according to a 2024 Gallup survey, with that age group expected to number more than 7 million by 2030.

“I think it is fantastic to really inspire a conversation and have investors think about different ways to do some good with the dollars they have,” Van Ness said.

Recognizing the need for such housing will only grow as more and more members of the LGBTQ community age into their senior years, LGBTQ Senior Housing formed a real estate task force this year to help it navigate the process when it tackles its second housing development. Van Ness told the Bay Area Reporter she has dubbed the advisory group the Next Project Task Force “so we are aware of opportunities as they arise.”

But Van Ness added, “We are not actively looking right now.”

That is partly due to her nonprofit still adjusting to being a co-owner of its housing development and addressing the needs of the residents there in addition to acting as Boston’s de facto LGBTQ community center now that it is also providing services and meeting space at The Pryde to nonresidents.

“Our current undertaking is quite demanding,” noted Van Ness, who is scheduled to be on a panel at the 2025 LeadingAge Annual Meeting taking place in Boston this November to talk about her experience working on The Pryde project and the need for more affordable housing for seniors, particularly those affirming and welcoming of LGBTQ older adults.

“A lot of folks outside the LGBTQ community assume the LGBTQ community has a lot of money. I can tell you if you have a household headed up by two women who have been lesbians their whole life, they will have half the income of a straight white guy out there,” said Van Ness. “Also, our current elders, and this will be true for another couple of decades, grew up with no legal protections. Being LGBTQ meant they lost homes, lost jobs, and were kicked out of the military. A lot were not able to get benefits, and if their partner died, they don’t have survivor benefits.”

The Milken Institute report notes that 40% of LGBTQ+ older adults live below the federal poverty line, set at an annual income of $15,560 for a single person. It makes it difficult for them to even afford subsidized housing, highlights the report, while seniors with very low incomes are priced out of some affordable housing programs that don’t set rents based on individual earnings.

“Despite these growing challenges, the housing supply remains scarce,” notes the report, which found there were roughly 1,500 affordable housing units affirming of LGBTQ+ older adults across 20 states as of 2023, “with 37 such developments in various stages of planning or operation.”

With Republicans now in control of the federal government and talking about disinvesting in public housing programs, having ideas for how private investment can help pay for such developments is more important than ever, said Van Ness. Though she hopes not to see federal support be withdrawn, she added.

“That would be devastating at a time when the need to fund such projects is growing. The fastest growing group of people who are unhoused are senior citizens,” said Van Ness. “This is critical for all of our elders but especially our LGBTQIA elders who go into their retirement years with fewer resources. I don’t know what this landscape looks like without state and federal support. Housing is expensive to create.”

Added Eng, “I think it is important to continue to share best practices across all the different providers across the country right now, more than ever, on how to build affordable housing for LGBTQ older adults in the community.”