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Addressing the Needs of Increasing Numbers of Housing Cost-Burdened Seniors Will be a Major Issue in Coming Years, According to JCHS and BPC

Published by Peter Lawrence on Monday, January 15, 2024 - 7:51AM

A worrying trend of increasing rates of housing cost-burden seniors is sweeping the country, according to recent reports and seminars from the Harvard Joint Center for Housing Studies (JCHS) and Bipartisan Policy Center (BPC).

The JCHS, Housing America’s Older Adults report  found that nearly 11.2 million older adults, defined by JCHS as aged 65 and older, were cost burdened (spending more than 30% of their household income on housing costs) in 2021. This figure, which represents an all-time high, is up from 9.7 million in 2016 and 8.8 million in 2011. 

The research also covers other hardships facing older renters and homeowners as they struggle to cover housing and healthcare costs. Those facing the most difficulties are finding themselves at risk of homelessness as the number of households eligible for housing assistance is growing while available funds cannot meet demand. In the face of this research, scholars and working professionals have come to identify certain problems and potential solutions to the current housing crisis among this age group. The JCHS hosted a December 2023 seminar detailing the report’s release with panelists sharing potential solutions to the affordability issues older Americans are facing and ways to encourage healthy aging. 

Additionally, in a Nov. 7, 2023, the BPC seminar, Aging Without Housing: Addressing the Rising Tide of Senior Homelessness, panelists explore the reasons why adults aged 65 and older are the fastest growing segment of the unhoused population.

The Current State of Housing for Aging Americans 

Citing the Housing America’s Older Adults report, Samara Scheckler and Jennifer Molinsky of JCHS provided an overview of the report during the seminar that contextualize the current state of housing for older Americans. Scheckler explained that households headed by someone in their 80s will double in number to around 17 million by 2040. The number of older adults that are cost burdened has been rising for two decades, as displayed in the graphic below, though roughly a third of older households have remained cost burdened from 2016 to 2021. Housing cost burdens can make it more difficult for older adults to afford other basic needs, such as food and healthcare. According to Molinsky, middle-income older adult households may also struggle to afford quality healthcare as they make too much money to qualify for social services. The report classified the group of Americans living alone aged 75 and up as “GAPS households,” as they are households in the “gap” between “assisted living” and “public support.” GAPS households have incomes at or more than 50% of the area median income (AMI) but still cannot afford all-in-one assisted living, out-of-pocket healthcare and miscellaneous costs. 

Blog Graphic: The Number of Older Households with Cost Burdens Has Been Rising for More than Two Decades

While most adults over 65 years old live in their own homes, mostly alone or with a spouse, homeownership rates among households aged 50-64 years old have fallen, suggesting future declines among older adults. Though homeownership rates are declining, an increasing share of older homeowners still have mortgages. The median mortgage debt increased by more than 400% from $21,000 in 1989 to $110,000 in 2022 dollars. This growth was even more drastic among homeowners aged 80 and over, increasing by more than 750% during the same time from $9,000 to $79,000 in 2022 dollars. Scheckler continued by stating that in 2022, older homeowners held nearly 50 times the net wealth of older renters, and incomes of older adults tended to decline and converge as they age regardless of tenure and race/ethnicity. Although a significant share of older adults are cost burdened across the country and the number of older renters in need of housing assistance climbed, federal programs still only support just over one-third of eligible households, according to the JCHS report. In 2021, there were nearly 5.9 million very low-income renters–defined as households with incomes at or below 50% of AMI–age 62 and older, but only 37% of them were assisted by federal programs. 

Blog Graphic: The Incomes of Older Adults Tens to Decline and Converge as They Age, Regardless of Tenure and Race/Ethnicity

Trends in Older Adult Homelessness

In a Nov. 7, 2023, BPC seminar, Dennis Culhane, professor of social policy at University of Pennsylvania, also showed discrepancies between the research behind premature aging and housing policies. His research shows that people 55 and older experiencing homelessness are showing symptoms of medical conditions typically seen in people aged 65 and over. Despite this, supplemental security income (SSI), a program that provides monthly payments to low-income individuals with disabilities, only considers people over the age of 65 to qualify for the program. According to Paul Downey, the president and CEO of Surviving Seniors, a lack of communication within housing and health systems has caused a vicious cycle of homelessness among some individuals. He has seen a rise in post-traumatic stress disorder, depression, and anxiety among unhoused people, which can cause them to struggle with acts of daily living (ADLs). Failure to meet these ADLs can cause someone to be rejected from a shelter or emergency room. More focus on preventative measures is needed to end the cycle of homelessness, including safety nets for medical expenses and job loss, shallow subsidy diversion, and more transitional housing.

Need for Coordination Between Housing and Healthcare

In the seminar, Molinsky raises the point that housing and healthcare systems need further cooperation since they are inherently intertwined for older Americans. Most long-term care services are provided within the home, according to the JCHS report, and health and housing are both major cost burdens. The report states that rising rents, property taxes, utility costs and insurance all contribute to these housing cost burdens among older adult households. Scheckler cited the JCHS report and demonstrated just how expensive health aid is by showing that the median cost of home health aid is $27 per hour, which typically must be purchased in four-hour blocks. This adds up to a total cost of more than $40,000 per year, while the median annual cost of assisted living is $63,000 per year. This is especially concerning as she states that most adults turning 65 today will need long-term care services at some point in their lives. Molinsky finally argues in the JCHS seminar that climate change threatens to increase these cost burdens for older people, as they are more vulnerable to extreme temperatures and poor air quality and may need more accommodations.

Potential Solutions for Affordable Housing Among Older Americans

During the JCHS and BPC seminars, panelists detailed possible programmatic solutions to the challenges facing older Americans. In the BPC seminar, Dennis Culhane stated the importance of shared living spaces for older adults and emphasized the shortage of affordable assisted living programs. One potential solution to this issue among older Americans was detailed by Elizabeth Chen, the Massachusetts Secretary of Elder Affairs. In the JCHS seminar, she gave an in-depth analysis of the success of Programs for All Inclusive Care for the Elderly (PACE) in her state. These programs establish resident service coordinators within affordable housing properties, which place a trusted person on-site to handle medical concerns. This reduces the cost for emergency medical services and hospital admissions, and provides care in a more timely manner, according to Chen. 

On top of this, PACE programs set aside built-in living spaces for individuals with high level needs of care to ensure that everyone’s health needs are met in an efficient manner. PACE programs also help middle-class patients that may be struggling, as you do not need to have Medicaid to qualify for it, but patients still pay Medicaid pricing. This allows PACE programs to remain affordable for those just outside the income range to qualify for financial assistance. Overall, Chen states that Massachusetts has found success in funding PACE programs, and they continue to expand across the state. However, one barrier that Chen has found with PACE programs is workforce constraints, as providers must possess a wide array of knowledge and must have a strong interest in working with elderly patients. 

Kramer states PACE programs have been picking up on a national level, and according to the report, there are now 155 PACE programs that operate in 32 states and the District of Columbia, serving 71,000 individuals. Kramer also emphasized that there has been an expansion of accessory dwelling units which can help to create more affordable housing. He adds that elimination of restrictive zoning laws and the implementation of age-friendly city and state designs are also key factors towards creating affordable living spaces for elderly Americans.

Another state that has seen advancements in their programs to care for the elderly is California. According to Meghan Rose of LeadingAge California, who presented during the JCHS seminar, the California Advancing and Innovating in Medi-Cal (CalAIM) program helps to fill in the gaps of coverage for adults who qualify for both Medicaid and Medicare to keep down the costs. Through CalAIM, all dually eligible patients are being moved into managed care through a capitated rate model which serves to create better health outcomes among their participants. Further, Rose states that CalAIM has been successful in providing housing transition navigation and housing deposits. She elaborates that they have also announced a plan to provide six months of transitional rent services for qualifying individuals who are currently experiencing or at risk of experiencing homelessness. 

A Push for Housing Options that Prioritize Healthy Aging 

The JCHS’ State of the Nation’s Housing 2023 report details the increasing housing cost burdens that renters feel today. The JCHS will also be releasing another report later this month that details the state of the nation’s rental housing market. Harvard’s JCHS states that LIHTC remains a critical tool for increasing the supply of affordable rental housing. 

The LIHTC is the largest annual federal tax expenditure for new affordable rental housing for older adults with low incomes, and is there is continued support for expansion along with the need for affordable housing. The Affordable Housing Credit Improvement Act (AHCIA, H.R. 3238, S. 1557) expands the LIHTC and includes provisions that will facilitate the creation of more affordable rental housing  for low-income seniors and other Americans. Programs such as PACE and CalAIM that work to combine health and housing services serve as a model to make housing for older adults more affordable and appropriate. 

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