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Growing ranks of older adults face housing crunch

Over-65 population expected to grow by more than 120 percent by 2050; new report finds
older population boom will worsen the nation’s housing affordability challenges

WASHINGTONThat baby boomers are swelling the ranks of older Americans is well-documented, but do we really understand the consequences of this important shift for the housing needs of older adults? A new report from the Center for Housing Policy, Housing an Aging Population – Are We Prepared?, explores the effects of this coming demographic change on the demand for housing, the challenge of providing meaningful housing choices for older adults of all incomes, and the policies that could help communities across the country respond to the dual challenges of providing older adults with affordable housing and adequate services.

The U.S. 65-and-older population will more than double by 2050 to nearly 90 million, growing at a rate far faster than any other age group. According to Census data, by 2050, one in five Americans will be over the age of 65. Some estimates put the figure even higher.

Housing an Aging Population – Are We Prepared? finds that older adults are more likely than younger adults to have housing affordability challenges.  As a result, the aging of the population is likely to increase the overall proportion of the country with severe housing cost burdens.  The report also finds that many older adults lack access to affordable services that could help them age in place.  Similarly, older adults with low- and moderate incomes often lack access to meaningful housing choices – for example, to move into a multifamily development that would provide services an 85-year-old might need to continue living independently and avoid costly nursing care.  The report further covers trends affecting older adults in terms of demand, housing costs, finances, location and housing type, offering recommendations on existing policies that may help to address the coming crisis.

Sydelle M. Knepper, founder and CEO of the New York-based development firm SKA Marin, says it’s not just government and nonprofits that are working to meet the housing needs of older adults. In more than 30 years working in housing policy at the federal, state and local levels and now in the private sector, Knepper says that she’s never seen a greater challenge, or such a great opportunity.

“Given the sharp increase in the population of older adults cited in the report, it's essential that we focus now on strengthening the nation's policy response.  HUD’s Section 202 supportive housing for the elderly program has done a lot to fund housing for older adults and people with a disability, providing more than 400,000 homes over the last 50 years, but we need to act at a much larger scale to have a hope of meeting future need.”

Advocacy groups for older adults have also begun tackling this looming issue, in large part working to spread awareness and to offer solutions that build on the existing policy framework.  Rodney Harrell, a policy advisor at AARP’s Public Policy Institute, says that communities and states must understand the challenges before they can address them.

“As the older population grows, meeting the housing needs of older adults is certain to become a significant challenge across the nation. States and communities need to effectively respond by adopting policies that ensure adequate, affordable housing for people of all ages.”

Read the full report

Key Findings

  • As the U.S. population ages, the share of the population with severe housing cost burdens will likely rise. Older adults are more likely than younger adults to spend more than half their income on housing. Cost burdens also increase with age. One in four households 85+ spend at least half their income on housing, as compared with about one in five households aged 65-74 and about one in six households younger than 65.

  • As the overall population ages, the numbers of the most vulnerable will grow as well — people with a disability, women living alone (who account for 40 percent of 65+ women) and minorities. Meanwhile, the Great Recession has eaten into the reserves of many older households, reducing home equity and retirement accounts.

  • Even some older homeowners without mortgages face serious housing challenges.  While 65+ homeowners are more likely than younger households to have paid off their mortgages, many of these homeowners nevertheless have high housing cost burdens. The incomes of older adults tend to decline with age—as reflected in rising poverty rates. But property taxes, maintenance, and utility costs all tend to rise over time for both older homeowners and renters (as reflected in higher rents). Accumulated savings can help, but these too diminish with age.

  • An older population with health issues will drive demand for modified housing and housing with supportive services. Both men and women are living longer, and as a result, more older adults will be living with disabilities. About one quarter of older households aged 65-74 and nearly two thirds of households with a member 85+ include someone with a disability. The demand for renovations and retrofits to accommodate disabilities and for moves to housing with supportive services will likely rise. Currently, about one in five 85+ adults are in community housing or a long-term care facility—more than 10 times the share of adults aged 65 to 74. The supply of these types of housing is unlikely to keep pace with burgeoning demand. Many suburban communities, home to half of older adults, continue to limit multifamily or group housing.

  • Existing and emerging policies can help older adults continue to live in their own homes as they age. These include policies to: assist with home modification using deferred loans or grants from Community Development Block Grant (CDBG), HOME or housing trust funds; connect residents to social services through expansion of the Home and Community-Based Services Medicaid waiver program, volunteer efforts, and other mechanisms; help residents afford high housing costs through housing vouchers and property tax abatement programs; and expand public transit and volunteer driver programs to help residents get around without driving.

  • Equally important are policies to expand housing choices for older adults. By adopting more flexible zoning policies, communities can help foster a diverse range of housing types including accessory dwelling units (i.e., granny flats), high-density rental developments, assisted living residences, continuing care retirement communities, and congregate housing. Subsidies will be needed to help ensure that older adults with low and moderate incomes have access to affordable choices. The report also recommends experimenting with more cohousing efforts that promote “active neighboring” and/or allow professional caregivers to live among residents

Methodology

This report is based primarily on Center for Housing Policy tabulations of American Housing Survey (AHS) data from 2009.  The tabulations use age of oldest member (not age of householder) to classify households into age groups; a 65+ household is one in which the age of the oldest household member is 65 or older. To complement the AHS and provide a more complete picture of the housing challenges faced by older adults, additional data and analyses were used, including analyses by the U.S. Census Bureau’s Population Division as well as data from the 2000 and 2010 Census, Current Population Survey from 2011, and Consumer Expenditure Survey from 2009.  Complete sources can be found in the report’s technical appendix.

About the Center for Housing Policy

The Center for Housing Policy is the research affiliate of the National Housing Conference (NHC) and specializes in developing solutions through research. In partnership with NHC and its members, the Center works to broaden understanding of the nation’s housing challenges and to examine the impact of policies and programs developed to address these needs.

About the National Housing Conference

As the United Voice for Housing, the nonprofit National Housing Conference (NHC) has been dedicated to helping ensure safe, decent and affordable housing for all in America since 1931.

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