The voices of Urban Institute's researchers and staff
June 15, 2015

Explosion in senior households by 2030 demands housing and community adaptations

Our recent analysis of housing trends underscores that we’re due for dramatic growth in senior households over the next few decades. In 1990, there were 20 million households aged 65 and up; by 2010, this number had grown to 25.8 million, and by 2030, we project that aging Baby Boomers will expand the number of senior households to 46 million.

This dramatic growth will occur among both senior homeowners and renters. Our research suggests that from 2010 to 2030, senior homeowners will increase from 20 million to almost 34 million, and senior renters—who include both homeowners who will shift to renting and baby boomers who already rent—will increase from 5.8 million to 12.2 million.

This sharp rise in senior citizens increases the urgency of developing policies that allow seniors to stay in their homes as they age, as most want to do. We need innovation and action on at least three fronts.

1. We must prepare to address a large increase in cost-burdened households. Seniors’ incomes drop after they retire, but their housing costs often don’t go down by much. This increased cost burden forces seniors to draw down on savings and forego other expenditures. Already in 2011, 2.6 million senior homeowners (13 percent) and 1.7 million senior renters (30 percent) paid more than half of their income for rent. If a proportionate number of senior households pay half their income on housing in 2030, these numbers will rise to 4.4 and 3.7 million. While homeowners may be able to cover these costs by liquidating home equity, the burden may be tougher to bear for renters, especially given increasing rental demand from other cohorts that is causing rents to increase.

2. We need to encourage and support home modifications that make homes safer, healthier, and more efficient for seniors. Adaptations to reduce the numbers of debilitating trip-and-fall injuries, increase indoor air quality, and make homes more comfortable and energy efficient promise to improve seniors’ quality of life, maintain the value of their homes, and potentially save taxpayers’ contribution to Medicare and Medicaid. The investment in older homes also will increase their resale value in a rapidly aging society.

3. We need to encourage and support changes in the community. Community support is necessary for seniors to have a high quality of life. In many communities, zoning laws should be changed to allow for house sharing and construction of accessory apartments. The drop in the proportion of senior homeowners will intensify the challenges of providing a safety net for an increasing share of the population. And senior homeowners need community supports  to live a fulfilled life in their own homes without feeling lonely or trapped when family and friends are far way. Elderly adults that own their own home are much less likely to be cost burdened than those that don’t.

In sum, the aging of the baby boomers means that senior housing issues are becoming much more pressing. The sheer number of baby boomers will force policymakers and communities to confront these challenges. With the right incentives and models, this challenge may emerge as a transformative opportunity for cities and suburbs across the U.S. to reinvigorate both the bricks and mortar and the community ties in our neighborhoods. 

As an organization, the Urban Institute does not take positions on issues. Experts are independent and empowered to share their evidence-based views and recommendations shaped by research.

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