I US Department of Housing and Urban Development The (HUD) Office of Policy Development and Research recently published a report that takes a closer look at the housing needs of America’s elderly population and the pain points that have exacerbated their needs as a result of the national housing crisis.
The material presented came from a workshop conducted by Fannie Mae as well as Federal Reserve Bank of Philadelphiawhich highlighted research examining “the impact of changing demographics, including the aging US population, on housing demand,” according to the report.
In a session led by Longbridge Financial share price CEO and Columbia University finance professor Chris Mayer, the researchers shared their findings – including those related to health care costs and their contributions to housing affordability problems faced by seniors.
Peyton Whitney, a researcher at Harvard University’s Joint Center for Housing Studies (JCHS), presented the results of a paper she co-authored with Samara Scheckler and Jennifer Molinsky that examined the impact of aging on housing affordability.
“Whitney noted that nearly 70% of adults age 65 and older will need to purchase long-term care (LTC) services at some point in their lives, but their ability to purchase this care is hindered by high costs and limited public assistance,” the report explained.
“The authors analyzed 9.9 million households with people over the age of 75 to estimate the current ability of older adults to purchase housing and daily LTC services, identify disparities, and consider opportunities for improvement.”
The analysis found that only 24% of older adults “earned enough money to pay for housing, living expenses, and daily LTC services, which cost $67,000 a year on average for people with an annual income of $40,000.” This shortage was greater among people of color and those experiencing “work difficulties.”
While sending home equity to pay for this care has had an impact, based on the researchers’ findings, they still express concern about the potential effects on intergenerational wealth transfer and “existing racial disparities in home ownership.” Expanding access to LTC through more programs, reoriented eligibility criteria and investments in public infrastructure can help address the “double burden” of housing and long-term care.
Lucas Taulbee of the University of Kentucky presented a recent paper co-authored with Hope Harvey and Kristin Perkins, which examined the potential impact of shared living arrangements (such as roommates) and the impact this could have on costs.
They found that “living in a shared home appeared to offer visitors a form of financial security, who had lower cost burdens than adults in non-shared homes and saved between $500 and $700 per month by living in someone else’s home,” according to the report. . “It was not clear whether the hosts benefited from this arrangement.”
A separate paper also aimed to determine whether home ownership had a positive effect on these cost issues. American University’s Kimberly Luchtenberg, along with co-authors Ashleigh Eldemire and Matthew Wynter, found that it was.
“Seniors who become homeowners are able to retain more wealth as their liquid assets decrease,” HUD’s report said. “According to Luchtenberg, i [HUD Housing Choice Voucher Homeownership] The plan can provide insurance against loss of income. These benefits extended to minority-headed households and were even more pronounced in ‘cohabiting’ households, or those with children dependent on adults (usually grandparents) for care.”
But these households often face their own financial challenges such as the cost of raising a child, and often have “limited eligibility for public assistance,” the paper found.
“The transition to home ownership reduced the gap between unoccupied and unoccupied households by 89%.” Owning a home early in life and buying a home in a poor area seemed to extend these benefits further.”
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