A Tale of One Assisted Living Facility

By Alec Pruchnicki, MD

Since 2003 I have had a primary care medical practice at the Vista on 5th Assisted Living Facility (ALF). The history of this facility will give some insight on our ability to build affordable housing and why it is so difficult.

Vista on 5th ALF was originally named DeSales Assisted Living and it was established by a local priest, Robert Lott, who managed to get financial support from several local institutions (St. Vincent’s Hospital and Terrance Cardinal Cooke Nursing Home), a commercial bank, and New York State Medicaid. It was slated to be permanently 100% low income, not just affordable, non-profit, and run by an independent community board. Since it opened in 2000 it has had a population of residents who are multiracial with about one third each white, Hispanic, and African American. It is also economically diverse with residents who were formerly homeless to retired doctors, lawyers, and financial people along with many artists and musicians. It was eventually renamed the Robert Lott ALF and re-branded again as Vista on 5th ALF after a scandal involving Father Lott surfaced.

Financial problems arose immediately. Although the plan was for 100% low-income residents, income and subsidies from Medicaid were insufficient to cover costs and so 10% of apartments have been rented at market rates. Many people paying those rates are spending down to get onto Medicaid and some have resources enough to pay market rates indefinitely. But over the years, operating costs of all types have slowly increased, including mandates like increased minimum wages requirements. Medicaid rate adjustments have never kept up with these costs.

During the Covid epidemic, costs soared, occupancy dropped and the deficit increased to the point of using up cash reserves which had accumulated over the years. Recently, Vista has affiliated with a non-profit philanthropic foundation from Italy which has assisted with finances. A non-profit assisted living facility must receive aid from Italy to make up for the lack of adequate support from our own government.

The significance of this does not just effect this one facility. Numerous times throughout the city when new housing is proposed it is a joint venture of profit-making developers who must set aside about 20-25% of apartments as affordable or low-income and advocates for expanded housing for these populations. What often happens is that NIMBY opponents to any one of these projects begin making demands that there be a higher percentage of affordable apartments, or that the apartments are low-income and not just affordable, or that the housing be permanent instead of only for 30–60 year terms. Sometimes tough negotiations result in greater percentages of apartments for populations in need. But often these demands come without any concept of where the initial or long-term subsidies of these apartments will come from. Profit making developers are hesitant about carrying apartments with low margins and government subsidies, as with Vista, are inadequate.

There are some ways around this problem. Philanthropic organizations like Habitat for Humanity sometimes help and often local faith-based institutions do. But for all the help these sources provide, there are still massive deficits in government funding such as the $70–80 billion costs for NYCHA housing capital improvements.

In fact, sometimes the NIMBY opponents demands are so unrealistic that I can’t help but wonder if these demands are not in good faith and designed to stop development that opponents don’t like rather than get a better deal for those who need better housing. One common ploy is to think up alternative sites for development even if the alternative sites have no realistic funding or if they would take many years to be built. The next time any new housing at the affordable or low-income rate is being proposed and being opposed by those who think they have a better idea, follow the money. Realistic funding, even with many strings attached at the insistence of developers, gets housing built, but unrealistic and unfunded proposals don’t.