The Bipartisan Policy Center Senior Health and Housing Task Force, which we co-chair, recently released a report urging the greater integration of health care with housing as vital to helping America’s rapidly expanding senior population age more successfully.
A growing body of evidence is showing that more tightly linking senior health and housing has the potential to improve health outcomes for older adults, reduce medical costs, and enable millions of Americans to “age with options” in their homes and communities.
To realize these considerable benefits, however, seniors must have access to affordable housing. Without access to such housing and the stability it provides, it becomes increasingly difficult to introduce a system of home- and community-based supports that can enable successful aging.
In short, affordable housing is the glue that holds everything together.
Unfortunately, the affordability of housing is a growing concern for millions of seniors. For those who own their home, monthly mortgage payments—along with property taxes, utility payments, and the cost of home maintenance and upkeep—can be a major strain on household budgets. The fact that senior homeowners are carrying more mortgage debt into their retirement years is a worrisome trend.
Another major reason for high housing costs is the acute shortage of affordable and available rental homes. This supply-demand imbalance most negatively impacts lower-income households, many of whom are older adults living on fixed incomes.
According to the Department of Housing and Urban Development’s most recent “worst case needs” report, in 2013, there were 11.2 million “extremely low-income” renter households competing for only 4.3 million affordable and available rental homes, resulting in a total shortfall of 6.9 million homes. Of the 11.2 million households in this competition, approximately 2.6 million were elderly households with no children.
The rapid aging of the U.S. population is likely to increase the demand for affordable rental homes and exacerbate the supply shortage. In the coming years, millions of older adults will seek to transition from homeownership to rental housing. The demand for rental housing will intensify even more, with greater numbers of seniors likely to suffer “severe” rent burdens.
Harvard’s Joint Center for Housing Studies estimates that, by 2025, the number of renter households aged 65 to 74 and 75 and older who will pay more than 50% of their income on housing will rise by 42% and 39%, respectively.
Responding to the need for more affordable rental homes is a critical national priority. It’s becomes doubly important when the health and well-being of so many older adults are at stake.
To help close the affordable supply gap, the Task Force calls for a substantial increase in federal support for the low-income housing tax credit (LIHTC) program.
The housing credit is a 30-year old program that has encouraged $100 billion in private investment in affordable rental housing. It has proven to be a great success, helping to support the construction and preservation of more than 2.8 million affordable rental homes in communities across America.
Importantly, the LIHTC is a critical source of financing for rental homes affordable to the nation’s lowest-income seniors. According to a 2014 HUD report, nearly 33% of reported housing credit households have a senior member (62+), and more than one-fourth have a head of household who is at least 62 years old. Many states have adopted “qualified allocation plans” that provide set-asides and other preferences for senior housing projects. In fact, the LIHTC program supports approximately 40,000 senior-restricted affordable units annually.
Bipartisan legislation recently introduced by Senate Finance Committee Chairman Orrin Hatch (R-Utah) and Sen. Maria Cantwell (D-Wash.) that would increase federal support for the housing credit by 50% is a very welcome development. We applaud both senators for their leadership. Greater private investment in affordable housing is needed now more than ever, and the housing credit is indispensable to encouraging this investment.
Of course, much more needs to be done. The Task Force proposes a new federal program for senior supportive housing that uses “project-based” rental assistance and the housing credit to finance new construction and attract funding from health care programs. We urge a re-examination of federal regulatory policies to ensure they are not acting as barriers to affordable housing development. States and local communities must also have the foresight to embrace permissive land-use policies that encourage alternative housing structures for seniors, such as accessory dwelling units.
The housing credit should be a top priority to deal with our affordable housing problem. Increasing it would represent a major step forward that would potentially benefit tens of thousands of America’s seniors.
Henry Cisneros served as secretary of the U.S. Department of Housing and Urban Development under President Bill Clinton.
Mel Martinez is a former U.S. senator from Florida, who served as secretary of the U.S. Department of Housing and Urban Development under President George W. Bush.
They serve as co-chairs of the Bipartisan Policy Center’s Senior Health and Housing Task Force.