Where will they live? After years of building thriving communities in cities across the country, now gay and lesbian seniors can't afford to live in them. (Community).

San Francisco has long been a mecca for gay men and lesbians. That certainly has been the case for Stephen Kellogg, 84, and his lifelong partner, Malcolm McCay, 77, who moved to the city 30 years ago. They were both early activists for gay liberation--Kellogg served as president of the city's Mattachine Society. And the couple held dances in their home, where gay men could gather freely as an alternative to the city's Mafia-run gay nightclubs in the 1960s.

But by 1987 things had changed drastically for Kellogg and McCay. The stock market crashed in October, robbing them of valuable investment income they thought would support them in their declining years, and the cost of living in San Francisco skyrocketed. "It was getting very expensive, and a lot of changes had taken place," Kellogg says. "We decided the money would go further somewhere else." So they moved to Oregon, where they say things for them went from bad to worse as they grew increasingly isolated and ill.

The plight of Kellogg and McCay underscores one of the most troubling predicaments facing elderly gay men and lesbians today. After a lifetime building communities in cities such as San Francisco, where it is estimated 20% of the city's senior citizens are gay or lesbian, they find they can no longer afford to live there. So they move to more affordable towns, where they are often strangers and lack the community resources necessary to care for themselves.

Now, a San Francisco housing group hopes to change things for the city's gay and lesbian seniors. Rainbow Adult Community Housing, a nonprofit organization, is seeking to build the first mixed-income housing unit for gay, lesbian, bisexual, and transgendered seniors. And in what is believed to be a first-of-its-kind grant, the group recently received $250,000 from state government sources to perform feasibility studies on the project.

When completed, the $50 million facility is expected to contain about 250 units for about 330 people. It will include a mixture of market-rate and subsidized apartments aimed and lower- and middle-income seniors. And in addition to apartments, the facility will feature a theater, cafe, fitness center, and a dementia and Alzheimer's disease care unit.

"We want to say to our elders that we want you to continue to be a part of the community you helped create," says Jim Mitulski, RACH's executive director. "We really want to show everyone that their retirement years can be as rich and rewarding and as community-filled as any other times in their lives."

Advocates for gay and lesbian seniors say economic circumstances often force the elderly up against a wall, particularly in the last years of their lives. Unwilling to move into traditional assisted-care units or nursing homes, where they fear staff may not be sympathetic to them and their partners, they suffer in silence or alone. "People are not aware of a real aging crisis in our community, due to the fact that the old are so invisible," says Terry Kaelber, executive director of Senior Action in a Gay Environment, a New York-based social service and advocacy group. "The vast majority of our seniors age as single people, and if you do not have children or a spouse to advocate for you, you are almost ignored."

As it turns out, Kellogg and McCay did find the cost of living less expensive in Oregon, but they also found a raft of new acquaintances and neighbors who they say disapproved of their sexuality and snubbed them. Their situation deteriorated when McCay suffered a heart attack and three strokes. McCay's doctors sometimes treated Kellogg like he didn't exist, he says, and the couple depleted their savings even further on medical treatments. After a nearly 10-year odyssey, shuffling McCay through various private and state hospitals and nursing homes, they ended up back in San Francisco again, practically destitute. Today, Kellogg rents a room in a friend's apartment, and McCay lives in a public hospice for the chronically ill.

Realizing that the situation for gay seniors such as Kellogg and McCay is critical--and sensing a market opportunity--private developers have tried for years to build for-profit facilities for higher-income gay and lesbian seniors. While there are currently plans for about a dozen such facilities, only one actually exists to date. Called the Palms of Manasota Fla., it houses 30 people and was built with the developer's own funds. It is primarily a retirement community for middle- and upper-income gays and lesbians who do not need assisted living, though plans for an assisted-living unit are in the works.

Part of the problem, developers say, is that they are trapped in a paradox: Investors don't want to put up money for a larger project until they have seen a successful model. Yet such a thing can't be built without adequate investor money. "Most of the [investor] money is in the straight community, and the concern is that this has not been done before," says John DeLeo, managing partner of the Shaman Development Group, based in Ft. Lauderdale, Fla. His company has been trying to build for profit housing for gay and lesbian seniors since the late 1990s.

Where others have had difficulties, RACH thinks its chances of success are excellent, partly because of its mixed-income approach. It has already located a tract of land in San Francisco's Hayes Valley section, and it plans to develop the land using a combination of corporate tax credits, bonds, and hopefully, more government resources. "It will not be as controversial here to use public funds for a gay and lesbian specific project," Mitulski says. "And if we can do it here, it will help everyone turn a corner."

For people like Kellogg and McCay, that corner can't be turned fast enough. "If [senior housing for gays and lesbians] had existed, Malcolm and I would have moved in when we retired," Kellogg says. "We would never have left San Francisco."

Quittner also writes for Business Week.