The US population is aging. Within the next decade, older adults will outnumber children for the first time in American history. As Americans live longer, their housing needs will change, but our current housing market is ill prepared for this demographic shift.
Today, senior households—many of whom are on fixed incomes—are facing a combined crisis of housing affordability, accessibility, and availability. As the country’s population ages, policymakers must prioritize seniors in solutions to the housing crisis. Without action, the consequences will be severe.
More seniors are strained by housing costs
Over the past two decades, the number of senior households considered severely cost burdened—those spending more than half their income on housing—has nearly doubled, rising from 5.2 million to nearly 11.7 million, according to American Community Survey data. And the share of severely cost–burdened senior households has increased. In 2000, 11.5 percent of households headed by someone 50 or older were severely cost burdened. By 2020, the share increased to more than 16 percent.
Housing cost burdens are driven not only by one’s rent or mortgage payments, but by the cost of utilities, home insurance, property taxes (PDF), maintenance, and other fees.
Some demographic groups are more affected than others. Renter households are more likely than owners to be cost burdened at all ages. Older seniors, those 75 and older, are more likely to be cost burdened than younger seniors. Other research finds that rising insurance premiums have also made senior living communities more expensive.
Unlike younger adults, who can change their spending in response to rising cost burdens, seniors, especially those on fixed incomes, have less flexibility. For older adults facing increased or unexpected housing costs, limited budgeting alternatives can lead to homelessness. Between 2019 and 2022, the share of older adults experiencing homelessness increased 37 percent.
To reduce housing costs and ensure that seniors can stay in their homes if costs increase, federal, state, and local policymakers can
- consider property tax deferrals at the local level to help seniors defray rising tax burdens;
- allow state-issued Medicaid waivers to cover housing supports, like emergency rental assistance;
- subsidize insurance costs for low- and fixed-income households, appropriately regulate the private insurance industry, and improve the data used to quantify climate risk;
- fund more Section 8 housing vouchers to help seniors with low incomes who rent stay in their homes; and
- expand the number of subsidized units to address supply shortages at the affordable end of the market.
Many seniors live in homes that do not meet their needs
Survey data suggest that most older adults want to remain in their current homes and communities as they age. But affordability and accessibility present challenges.
According to the latest data from the American Community Survey, more than 75 percent of senior households live alone or with only one other person, yet 60 percent of these households live in homes with at least three bedrooms. These homes may not only be too big—they might be too old or in poor condition. Nearly half of large homes rented and owned by seniors were built before 1980 and might require serious renovation or modification.
According to data from the latest Health and Retirement Study, 34 percent of households headed by someone older than 50 lack the financial resources to cover the median out-of-pocket expenditures on home modifications. Renters in particular are more likely to lack the resources for renovations, with 58 percent of older renting households unable to cover median expenditures compared with 27 percent of homeowners.
To help keep older adults in their homes as they age, policymakers and federal agencies can
- allow Medicare to cover the cost of home modifications seniors need for changing health and mobility;
- simplify and introduce more low-cost options of the Home Equity Conversion Mortgage program the Federal Housing Administration offers to allow seniors to draw from their home equity; and
- leverage state-based affordable housing preservation initiatives and funding to support preservation and rehabilitation of homes in poor condition.
Seniors that want or need to move face limited options
Even if older adults want and have the means to move, the severe housing supply shortage has led to a limited available housing stock, particularly at the affordable end of the market. Only 10 percent of the country’s housing units are ready to accommodate older people, as most homes have entryway steps, only upstairs bedrooms and bathrooms, and inaccessible bathrooms.
Research suggests that many older adults might want to move closer to their children, meaning they might be searching for housing in high-cost areas with amenities important to younger people, like employment opportunities and strong school districts. Older adults that require greater levels of care might face even more barriers, as the cost of independent- and assisted-living communities are prohibitively high, in part because of the high cost of housing development.
Increasing affordable housing supply—and especially the supply of smaller, accessible homes in areas where seniors want to live—can improve the well-being of senior households. To ensure that senior households can move if that is best suited for their needs, federal, state, and local policymakers can
- change zoning regulations to allow for multigenerational and intergenerational housing, as well as backyard accessory dwelling units;
- ease the way for more homes to get built, particularly at the affordable end of the market; and
- ensure the Federal Housing Administration has the resources to increase lending for senior living and health care facilities.
More data and research are needed to avoid worsening the housing crisis as America ages
To stave off a crisis in senior housing instability and homelessness, policymakers, planners, and housing developers need information about what seniors want and need, today and in the future. This information is most important at the local level, where policymakers control most decisions that affect the housing supply.
The housing needs of seniors will continue to evolve, especially as the country’s demographics shift and senior households make up a larger share of the population. To prepare for the coming decades—by building the necessary homes and making policy changes—we need research to make future needs clear.
Projections of future housing needs among older adults—especially those that account for climate vulnerability, insurance cost increases, health status, social connections, and changes in senior incomes and benefits—could provide crucial insights. The collection and publication of population-level data on senior housing decisions, challenges, and outcomes at detailed geographic levels can support this work and clarify problems and solutions.
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