A report published by the Harvard Joint Center for Housing Studies, “Housing America’s Older Adults,” shows that older adults increasingly struggle to afford the combined costs of housing and the care needed to remain in the home of their choice. Approximately one-third of older adult households were cost-burdened in 2022, and nearly 50% of these households were severely cost-burdened. Meanwhile, fewer than 15% of single adults aged 75 or older could afford both the costs of housing and long-term care (LTC) services like in-home medical care, household support services, or assisted living facilities.
Between 2012 and 2022, the population of adults who are 65 and over in the U.S. increased by 34%, reaching 58 million. The authors of the new paper find that, in 2021, most older adults lived on their own or with a spouse only. Approximately 20% of older adults in 2021 lived in multigenerational households, which can provide opportunities for older adults to share housing costs or provide and receive social support. Older adults of color were much more likely to live in multigenerational housing arrangements compared to their white counterparts. The authors report that older adults are more likely than any other age group to require accessible housing, of which there is an inadequate supply. As of 2019, less than half of individuals aged 65-79 and 54% of those aged 80 and over lived in single-floor homes with non-step entries – important accessibility features for keeping older adults safe in their homes.
The authors analyzed data on housing tenure and identified widening wealth gaps between homeowners and renters, particularly for older adult renters of color. In 2022, most older adults (79%) owned their homes, the highest percentage of any age group. Older adults of color were more likely than the average older adult household to be renters: 37% of older adult Black households and 34% of Hispanic households were renters, compared to 20% of all older adults. In 2022, the median net wealth of older renters was $10,100, which is only 2% of the median net wealth of older homeowners. The median net wealth for older renters of color was even less: $3,000 for Hispanic households and $3,900 for Black households.
The authors also find that the number of older adults burdened by housing costs reached an all-time high in 2021, with 11.2 million adults aged 65 or older spending 30% or more of household income on housing costs, nearly half of them spending 50% or more (making them severely cost burdened). However, some older adults are disproportionately impacted. Eighty percent of older adults with annual household incomes below $15,000 were cost-burdened in 2021. Over 40% of Black and Hispanic older adult households (respectively) were cost-burdened, compared to 30% of White households. Older renters were also far more likely to face housing cost burdens than older homeowners: in 2021, more than half of older renter households were cost burdened, compared to about a quarter of homeowners. Unlike homeowners, older adult renters cannot rely on home equity as a source of funds and may not have sufficient savings to cover unexpected financial setbacks. For example, 43% percent of older renters had less than $1,000 in cash savings in 2022. Despite the clear need for government housing assistance, only one in three eligible older adult households currently receive a housing subsidy.
Finally, the authors examined the dual challenges of unaffordable housing and the high costs of LTC services needed by older adults to remain in their homes. The authors find that 70% of adults ages 65 and older will require LTC services at some point, but the need for care arises at an earlier age for renters, people with low incomes, and people of color. Nationally, the average cost of in-home care is $100 a day, while assisted living facilities that combine housing and long-term care cost an average of $63,000 a year. Analyzing data from 97 U.S. metro areas on adults ages 75 and older who live alone, the authors find that only 14% could afford a daily visit from a home health aide after paying for their housing costs, and only 13% of adults could afford living in an assisted living facility without tapping into their assets, such as retirement funds, stocks and bonds, and home equity. These dual challenges are not limited to the lowest-income populations. For example, of adults 75 or older earning more than 50% of the area median income, only 8% could afford a daily visit from a home health aide, and 16% could not afford a single weekly visit. (For more, see the interactive map published by the Joint Center for Housing Studies, which allows users to compare the combined cost burden of housing and LTC services for older adults by metro area.)
As the share of the U.S. population over age 65 increases, the authors predict that a growing number of households will struggle to afford to stay in the home of their choice and receive the care they need. They project that the number of older adults headed by an adult age 80 or over will double by 2040, as will the share of older adults who are low-income, renters, and people of color. With limited government assistance and scarce high-cost LTC services, more low- and moderate-income older adults will struggle to afford both housing and the care they need. The authors emphasize that more funding to sustain and enhance existing housing and care models is critical, as are innovative approaches to better support the country’s growing older population.
Read the article at: https://bit.ly/481VRlA