As if there weren't already enough housing policy issues to worry about, the Center for Housing Policy points to yet another challenge on the horizon.  There are about 40 million Americans over the age of 65 today and by 2050 there will be over 88 million, a 120 percent increase.  At the same time the numbers who are over age 85 will more than triple.  And, unless attitudes change drastically in the next 38 years, 90 percent of those older adults will want to remain in their homes as they age.

Housing affordability and accessibility are already serious challenges for older adults and will only grow if we leave them unaddressed. Incomes tend to decline with age, but housing costs keep going up - even more so if you add in the services needed to age in place. A study just released by the Center, Housing an Aging Population is subtitled Are we Prepared?  The study concludes that we probably are not.

There are 26.2 million older households today and twenty-three percent of all households include a member over the age of 64 and 11 percent have a resident over 75.  While 7 out of 10 men over 65 live with spouses only 50 percent of women do and 40 percent of women live alone.  Of the 26.2 older households, 38 percent include at least one member with a disability, a figure that rises with the age of the residents.  Lower income households are more likely to have disabilities, 44 percent among the very low-income groups, and disability rates are also slightly higher for renters than for owners.

While only 6 percent of older adults live in housing that is physically inadequate (a number much higher for rental housing and manufactured housing), many housing units may be neither safe nor suitable for older adults.  As the population ages it will become important to revisit the definitions of adequacy used by the American Housing Survey to ensure that policymakers understand the extent of housing that may be inadequate for seniors. 

Staying in one's home often means either adapting it with features that make it easier and safer to move around and accomplish every-day chores or having some level of in-home care.  The former is not always an option for renters and neither option is inexpensive.  Some studies estimate that one in four older adults have a lower body limitation that requires modifications to doorways, entries, or baths, modifications that can run into thousands of dollars.  Only limited help for these expenses is available from either Medicare or Medicaid and the National Association of Home Builders reports that about 80 percent of home modifications and retrofits are paid out-of-pocket by residents.

About 80 percent of older adults are homeowners and many are mortgage free which makes keeping their homes more affordable.  But given the lower rates of homeownership in today's younger age groups this homeownership level may not continue, especially in light of a substantial increase between 2000 and 2009 in the percentage of homeowners over age 50 with mortgages.   

Regardless of age the average household spends slightly more than a third of its income on housing, but more older adult households spend more than 30 percent of their income on housing than younger households and the share of those who are "severely costburdened," that is spending more than 50 percent of their income also increases with age.  Even though the oldest households are more likely to have paid off their mortgages, the cost of operating and maintaining a home consumes a larger share of the diminishing resources of households as they age.

Social Security provides 80 percent of the income in the two lowest income quintiles of older households.  Higher income households draw income from a wider variety of sources but the heavy reliance on Social Security underscores both the importance of that program and the limited resources available to these households to afford housing and other costs.  The share of older adults with incomes below the federal poverty line rises with age and is higher for minorities and those who lack a high school diploma.  These disparities in income are important to those seeking policy solutions to the housing challenges of older adults.  While there are some who can afford to meet their own needs, there are also many who cannot.

Home equity is often the largest source of wealth for seniors to tap in retirement and owners lacking equity may be locked in their homes.  The 14.5 million older owner households without a mortgage average roughly $150,000 in home equity.  Having a mortgage brings this down to around $93,000.  About eight percent of older homeowners report their mortgages are underwater.

Since 1984 the net worth of households over the age of 65 has grown much faster than younger households but net worth varies dramatically by race with black and Hispanic households having far less wealth than white households.  Median asset levels mask significant variation and many older households lack sufficient assets to support their retirement.

The Center says that the reported desire to age at home is reinforced by the low moving rates and long-term occupancy of older individuals.  Reluctance to move is particularly true for those who own.  Given this strong preference, it is important to expand access to the services that many individuals need to live independently such as meal preparation, assistance with personal needs, and housekeeping and important to provide them with affordable residential options that allow them to meet their needs through walking or public transit.  More than one-fifth of 85+ households already live in a long-term care facility or a community housing facility with services.  "It is quite possible that many additional households would choose to move if affordable options were available nearby.

While more renters than owners live in a central city, more than half of all older households reside in the suburbs.  While these locations provide many benefits, they also have policy implications.  Many localities require use of a car for working, shopping, and socializing and many limit construction of multi-unit buildings, limiting options of seniors wishing to stay in their communities. 

More than 70 percent of renters report they have access to public transportation while less than half of homeowners do, partly because a higher proportion of renters live in central cities. The study says that while access to public transportation may be necessary to help some age independently, it may not be sufficient.  Only 17 percent of older households that have ready access report regularly using it.  "Efforts to make public transit more accessible and to increase ridership among older adults will be important to spur both demand for transit and more service to meet that demand.  Where there are good systems we may need to expand residential options within walking distance of stations and to improve the walkability of station areas to facilitate access.

The report shows that many older adults have limited incomes, that housing cost burdens grow with age, and this group is a high consumer of services.  Only about 24 percent of renters of all ages with housing needs are being reached by federal rental assistance and some policymakers have proposed cuts in these programs.  In sum the number of older adults is rising but the available federal funding for housing subsidies is not keeping pace with demand.  Many of the residents of existing subsidized housing developments are aging and need services as well as modifications to their developments to allow them to age safely and comfortably in place.

It is to everyone's advantage to find solutions that allow older adults to age in place or in a community setting of their choice and to avoid costly nursing home care.  The Center suggests the following solutions for achieving this goal.

Policies to Support Aging in Place 

• Make homes more affordable, i.e. through property tax relief, housing vouchers for aging renters, etc.
• Enable home modifications with technical assistance, volunteer labor, funding through deferred loans or grants for various sources.
• Connect residents to social services by expanding Medicaid services for in-home or centralized services; use Medicaid/Medicare funding for outpatient nursing services; scale up models that provide services to help non-Medicaid eligible people to age in place.
• Expand transportation options.

Policies to Expand Housing Choices for Older Adults

• Encourage incorporation of universal design in government subsidized housing and change building codes to encourage private development of build elder-friendly homes.
• Create flexible zoning rules to promote a diverse range of housing types to expand choices for older adults (i.e. granny flats, high density rental units); site housing near shopping and transportation.
• Preserve and expand the supply of affordable rental housing.
• Enhance consumer choice with public and private supportive housing models such as assisted living and continuing care retirement communities.