Housing trends and resources for an aging population
By Kimberly F. Luchtenberg
Sunday, November 19, 2017
The oldest members of the baby boom generation are turning 72 next year.
As this large cohort reaches and advances through their retirement years, their evolving needs will have a significant effect on the housing market. For instance, as people age they have higher rates of disabilities that require accommodation in housing.
A report published in 2016 by the Joint Center for Housing Studies (JCHS) at Harvard University projected that by 2035 there will be 17 million households in the US with at least one person 65 or older who has a mobility disability. And yet today only 3.5 percent of housing offers the features to be accessible to those with moderate mobility disabilities and only about 1 percent are wheelchair-accessible.
Additionally, as the number of retirement age households rise, issues of housing affordability will increase in significance.
Nearly 80 percent of households with residents who are 65 and older own their homes, the highest rate of any age group. While two-thirds of those own their homes clear of any mortgage, there remain significant costs associated with maintenance, taxes, etc., as homeowners of any age will attest.
Many of the elderly also face significant increasing medical expenses placing demands on their often-fixed incomes. Their incomes are generally lower than younger households, with median income of $38,900 compared to $59,500 for the rest of the population.
The JCHS study reflects this squeeze on housing affordability for the elderly, finding 15 percent of 65-79 year old households and 20 percent of those 80 and older severely burdened with more than 50 percent of their income consumed by housing alone.
These problems will only grow larger over time. In the most recently published US population projections published by the Census Bureau, the 65 and older age group was projected to increase in just 20 years from 47.8 million in 2015 to 79.2 million in 2035. During that same period, people in the US age 85 and older are projected to grow from 6.3 to 11.9 million.
This growing population of the elderly increasingly prefers to “age in place,” that is to remain in their own home as long as possible while obtaining long-term care services from spouses, other family members or friends, or paid services from a number of available options. This will affect the housing market as the elderly move into new residences that meet their needs for accessibility and access to care services, or if they invest in modifications to their existing housing to meet those needs.
North Carolina does provide programs to assist low- and moderate-income households with tax relief options that can ease the burden of housing expenses.
People with 2017 total income of no more than $29,600, may qualify for the Elderly or Disabled Property Tax Exclusion. This program reduces the appraised value of your home subject to taxation by at least half – a $25,000 reduction or 50 percent of its appraised value, whichever is greater. There is also an option to defer a portion of property taxes that has higher income eligibility allowances (up to $44,400). This “Circuit Breaker Deferment” does result in a lien on your property, so consider consulting with a tax professional before proceeding.
Kimberly F. Luchtenberg is an assistant professor in the Department of Finance at ECU.