Progress Illinois takes a look at two recently-released housing reports. One highlights the growing housing needs of America's aging population, while the other examines the shortage of affordable rental units available for low-income households at the state and national levels.
The existing U.S. housing inventory is unprepared to meet the needs of America's growing older adult population, finds a new report by the Harvard Joint Center for Housing Studies and the AARP Foundation.
By 2030, the number of Americans aged 50 and over is expected to hit 132 million, up more than 70 percent since 2000, according to the report, "Housing America’s Older Adults—Meeting the Needs of An Aging Population."
One in five Americans will be 65 or older by 2030, compared with one in seven today. Currently, one in sixteen U.S. adults are at least 75 years old, and that share is expected to increase to one in eight by 2040.
The country, however, already has too few housing options available for older adults that are affordable, accessible and connected to supportive services, the report found.
“Recognizing the implications of this profound demographic shift and taking immediate steps to address these issues is vital to our national standard of living,” Chris Herbert, acting managing director of the Harvard Joint Center for Housing Studies, said in a statement. “While it is ultimately up to individuals and their families to plan for future housing needs, it is also incumbent upon policy makers at all levels of government to see that affordable, appropriate housing, as well as supports for long-term aging in the community, are available for older adults across the income spectrum.”
Many older Americans are grappling with high housing costs, according to the report.
In 2012, one-third of U.S. adults aged 50 and older — or almost 20 million households — were cost burdened, meaning they payed more than 30 percent of their income on housing costs. That same year, nearly half of those 20 million households were severely burdened, or spent more than half of their income on housing costs.
Thirty-seven percent of adults aged 80 and older faced high housing costs in 2012, including 20 percent with severe burdens.
Older households paying off a mortgage as well as those with lower incomes were more likely to be cost burdened, the report showed. Seventy-seven percent of older households earning less than $15,000 a year, as well as 54 percent of those with annual incomes between $15,000 and $29,999, were burdened by housing costs in 2012.
Cost-burdened households tend to cut back on food, health care and other necessities, according to the report. Additionally, adults in the 54 to 60 age range with high housing costs often spend less on retirement savings compared with those living in affordable housing.
In general, older homeowners tend to be in a better position financially than older renters to pay for care later in life. According to the report, 70 percent of adults who will reach the age of 65 will need some form of long-term care as they age.
"The typical homeowner age 65 and over has enough wealth to cover the costs of in-home assistance for nearly nine years or assisted living for six-and-half years," the report reads. "The typical renter, however, can only afford two months of these supports."
As the population of adults aged 65 and older expands, the number of low-income older households will also rise.
By 2024, 6.5 million older households will have annual incomes of less than $15,000, a 37 percent increase from today, the report noted. Also over the next decade, there will be 2.9 million more older households with annual incomes between $15,000 and $29,999.
"This sharp increase will strain the capacity of programs aimed at providing affordable housing and supportive services to these populations," the report reads.
Federal rental assistance programs for low-income older adults are already under pressure.
In 2011, there were 3.9 million "very low-income" renter households aged 62 and older eligible for federal rental assistance. However, only 1.4 million, or 36 percent, of those households were able to secure federal housing aid, according to the report.
The number of older households eligible for rental assistance is expected to increase by 1.3 million between 2011 and 2020 and another 1.3 million between 2020 and 2030. And if housing assistance efforts remain the same over this time period, between 3 million and 4 million older renters will be on their own "to find affordable and adequate housing in the private market," the report states.
Meanwhile, it is often difficult for older Americans to find physically-accessible housing that includes features such as no-step entries and extra-wide hallways. The housing stock's lack of accessibility features can prevent "older adults with disabilities from living safely and comfortably in their homes," according to the report.
Also in short supply is affordable housing that links older adults to health care and other supportive services. As a result, this "leaves many older adults with low incomes at risk of premature institutionalization," the report reads.
Among other key findings, the majority of older adults live in "car-centric" suburban or rural communities. But because the country's transportation and pedestrian infrastructure "is generally ill-suited to those who cannot or choose not to drive," older adults living in these areas can become isolated from friends and family, the report points out.
The report recommends a number of actions that policy makers can take at various levels of government to expand affordable and appropriate housing options for the nation's aging population.
For example, government tax breaks and incentives should be offered to "reduce housing cost burdens and allow older households to modify and maintain their homes to accommodate disabilities." Governmental bodies "should also encourage production of more diverse and flexible housing, including mixed-use developments with housing located near services and amenities."
Low-Income Illinoisans Struggle To Find Affordable Rental Housing
In other housing-related news, Illinois has a shortage of affordable rental units available for extremely low-income households, according to a separate report recently issued by the National Low Income Housing Coalition (NLIHC) and Housing Action Illinois.
In 2012, Illinois had a deficit of 321,394 affordable and available rental units for extremely low-income households, or those earning 30 percent or less of their area's median income. Across the state, there were just 30 affordable rental units available for every 100 extremely low-income Illinois families in 2012, the report showed.
The housing gap that year was slightly worse in Chicago's metropolitan area, where only 27 affordable units were available for every 100 extremely low-income renter households.
The report, "Housing Spotlight: The Affordable Rental Housing Gap Persists," also looked at the housing situation for the state's "deeply low-income" renters, or those with incomes at or below 15 percent of their area's median income level. Deeply low-income households tend to live on fixed incomes, including the elderly or disabled who rely primarily on Supplemental Security Income (or SSI), according to the report.
Statewide, there were only 16 affordable rental units available for every 100 deeply low-income households in 2012, the report found. That same year, 90 percent of deeply low-income Illinois families spent at least 50 percent of their income on housing costs.
The Chicago metropolitan area had 17 affordable units available for every 100 deeply low-income renter households. Eighty-nine percent of those poorest households in the Chicago region spent more than half of their income on housing costs.
Nationwide, there were 10.3 million extremely low-income renter households in 2012. The country, however, had a shortage of 7.1 million affordable rental units available to those households that year. Also in 2012, there was a national deficit of 3.4 million affordable units available to the country's 4 million deeply low-income renter households.
To help close this housing gap, the NLIHC and Housing Action Illinois want to see funding pumped into the National Housing Trust Fund (NHTF), a federal "affordable housing production program," in order to provide states with resources to build, preserve and rehabilitate rental housing. The NHTF, authorized by Congress in 2008, has yet to be funded.
"Funding sources for the NHTF being currently pursued include Fannie Mae and Freddie Mac, any successors to Fannie Mae and Freddie Mac created through housing finance reform legislation and mortgage interest deduction reform," a statement from Housing Action Illinois reads.
"Fannie Mae and Freddie Mac have a statutory obligation to make contributions to the NHTF," the statement adds. "Their obligation was suspended in 2008 due to their financial state. Given Fannie Mae’s and Freddie Mac’s return to profitability, NLIHC and other NHTF supporters have called for the suspension to be lifted and for contributions to the NHTF to begin. NLIHC estimates that as of the fourth quarter of 2013, Fannie Mae and Freddie Mac owe $761 million to the NHTF."