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. 2020 Dec 5;31(1):30–32. doi: 10.1093/ppar/praa038

Housing Affordability and Security Issues Facing Older Adults in the United States

Andrew Fenelon 1,, Sarah Mawhorter 2
Editor: Brian Kaskie
PMCID: PMC7799385  PMID: 33462553

Rising housing costs have outpaced incomes in the United States for at least the past three decades. At the same time, the population of older adults is growing rapidly. The confluence of these two trends has brought housing affordability for older adults into focus in scholarly and policy conversations. The majority of older adults own their homes, which can confer advantages for housing affordability and security. Older homeowners who bought their homes earlier in life and paid off their mortgages before retirement are often insulated from rising housing costs. Still, some may face difficulties keeping up with rising property taxes and saving for home maintenance, and an increasing number still hold mortgages. In addition, a notable fraction of older adults rent their homes, and many have difficulties keeping up with rising rents or spend a large fraction of income on rent. In this spotlight, we first assess housing affordability and security issues facing each group of older adults. Next, we consider policies and programs that facilitate improvements in housing affordability and stability for each group. Finally, we close with some thoughts on the future of housing issues in the older adult population.

Housing Affordability and Security Issues Among Older Adults

Housing costs can present a greater financial burden for older adults than for working-age adults. Incomes often fall after retirement, and most older adults depend on fixed sources for their incomes. Of older adults, 65% derive the majority of their income and one-third derive more than 90% of their income from Social Security, making it especially difficult to adapt financially when housing costs rise (Social Security Administration, 2014). Furthermore, moving to a lower-cost housing unit can be more difficult and lead to greater livelihood instability for older adults.

Financially stable older homeowners gain home equity as prices rise, providing a financial cushion in later life, and many homeowners pay off their mortgage by the time they reach retirement age. Yet even those who have paid off their mortgage may have difficulty paying property taxes or keeping up with the costs of necessary maintenance, such as roof or plumbing repairs, heating and cooling system upkeep, or replacing faulty appliances. Overall, 26% of homeowners over age 65 are cost-burdened, which is a greater fraction than any age group except those under age 25 (Joint Center for Housing Studies, 2019).

In the wake of the housing boom of the early 2000s and the subsequent housing crisis, an increasing share of older homeowners still hold mortgages (Collins et al., 2020). According to the American Community Survey, 37% of homeowners aged 65 and over held a mortgage in 2019, up from 25% in 1998 (Butrica & Mudrazija, 2016). Home purchases later in life and mortgage refinancing have contributed to this trend, and more older homeowners than in previous years are now underwater, owing more than the value of their homes (Butrica & Mudrazija, 2016). Older homeowners who fall behind on their mortgage payments risk foreclosure and the loss of their homes; while foreclosure rates have declined since the crisis of 2008, in recent years homeowners aged 75 and older have had the highest foreclosure rates of any age group (Trawinski, 2019). Furthermore, racial and ethnic differences in home ownership rates among older adults are the largest they have been in 30 years, and older black and Hispanic homeowners are significantly less likely than whites to have paid off their mortgages (Joint Center for Housing Studies, 2019).

Not all older adults own their homes; 21.5% of adults aged 65 and over rented their primary residence in 2018, a value which has risen since the Great Recession (Joint Center for Housing Studies, 2019). Over half (54%) of renters aged 65 and older are cost-burdened, and nearly one-third spend at least half their income on rent. As with homeowners, cost burdens among renters are more common among older adults than any other age group except those under age 25. Lifelong renters are an especially vulnerable population, as they are subject to rising rents and, unlike homeowners, have few protections from rising housing costs. In most states, landlords can choose to raise the rent at the end of a lease term, and can decline to renew a lease. As with younger adults, housing cost burdens among older adults tend to reduce necessary expenditures or lead to unstable housing situations. To avoid frequent moves in later life, many older adults may delay retirement in order to maintain incomes sufficient to afford housing. This is reflected in increased labor force participation among adults over 60 since 2000 (Bosworth et al., 2016). Government policies that promote secure and affordable housing for older adults (both homeowners and renters) can have additional benefits in terms of financial stability and health.

Policies to Increase Housing Security Among Older Adults

Homeowners who have paid off their mortgages are in a relatively good position in terms of housing affordability and security. They can use home equity lines of credit (HELOCs) to finance large expenses such as home maintenance and long-term care (Butrica & Mudrazija, 2016). While HELOCs often amortize and the interest payments become more expensive after ten years, home equity conversion mortgages simply reduce the amount the owner receives on the sale of the property and do not entail regular payments (Green, 2019). Many state policies curb property tax increases, such as California’s Proposition 13, which limits annual assessment increases to 2%, or Michigan’s Proposal A, which indexes increases to the rate of inflation. These policies are not without pitfalls; when applied broadly, they constrict a key revenue source for local governments and can inhibit residential mobility. Many Canadian provinces offer more targeted tax deferment programs in which the government pays older adults’ property taxes via a low-interest loan and places a lien on the house to be repaid when the owner dies or the house is sold.

Older homeowners who are struggling to pay their mortgages would benefit from federal foreclosure prevention programs that allow them to remain in their homes as they age. The Home Affordable Modification Program provided support for cost-burdened homeowners, while the Home Affordable Refinance Program helped homeowners underwater on their mortgages refinance. However, these programs expired in 2016 and 2018, respectively.

There are few federal or state programs directly aimed at improving the housing security of older renters. Eviction protection programs are scarce, though some local jurisdictions require landlords to establish a just cause in order to evict their tenants. Rent control can protect older tenants living on fixed incomes, yet it has only been implemented in a few cities for certain housing units across the five states that allow rent control (Rajasekaran et al., 2019). Like property tax limits, the broad application of rent control can have drawbacks, disincentivizing landlord investments and maintenance and discouraging residential mobility. Rent control could be a useful tool if targeted toward older tenants on fixed incomes, but that could result in additional landlord discrimination against older renters.

An expansion of rental assistance programs also has strong potential to alleviate housing affordability problems for very low-income older adults. The Section 202 Supportive Housing program, funded by the U.S. Department of Housing and Urban Development, is targeted toward adults aged 62 and above with incomes below 50% of the area median, but houses only 133,000 people nationwide (U.S. Department of Housing and Urban Development, 2019). In addition, many public housing agencies designate a certain number of public housing and housing voucher units for older adults. Still, only about one-third of income-eligible older adults received federal rental assistance in 2017 (U.S. Department of Housing and Urban Development, 2020). Fully funded rental assistance programs available to all eligible older adults can represent a platform for improving health and well-being. There is precedent for such a far-reaching program: the Low Income Home Energy Assistance Program provides support for heating costs in winter for 5.4 million low-income renters and homeowners. Adults who receive federal rental assistance are less likely to report poor health, psychological distress, and cost-related delays to medical care and are more likely to effectively manage diabetes symptoms (Fenelon et al., 2017; Keene et al., 2018; Simon et al., 2017). Finally, housing programs that are combined with supportive services (such as Support and Services at Home in Vermont) may improve older adults’ physical functioning and reduce problems accessing medications (Kandilov et al., 2017).

An expansion of rental assistance programs also has strong potential to alleviate housing affordability problems for very low-income older adults.

Looking Forward

Because housing is such a fundamental determinant of health, financial security, and quality of life, promoting housing affordability and security across the life course can lead to broad improvements to older adults’ well-being. Alongside federal and state governments, health-care providers and insurers should take a stronger role in supporting stable and affordable housing for older adults, which is likely to lead to substantial economic savings as a result of improved health. The Kaiser Permanente health system invested in $100 million in affordable housing in Oakland, California, and saw both increased housing stability and reductions in health-care costs and emergency room use. As the U.S. population ages, scholars and policymakers should promote similar programs that draw on the resources of health-care providers and insurers in order to improve both housing and health for older adults.

Because housing is such a fundamental determinant of health, financial security, and quality of life, promoting housing affordability and security across the life course can lead to broad improvements to older adults’ well-being.

Funding

Support for this analysis was provided by the National Institute on Aging (P30 AG17265) and the Eunice Kennedy Shriver National Institute of Child Health and Human Development (R21 HD095329).

Conflict of Interest

None declared.

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Articles from The Public Policy and Aging Report are provided here courtesy of Oxford University Press

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