The Forthcoming Senior Rental Crisis Has Implications for Federal, State, and Local Policymaking
Between 2020 and 2040, the number of senior households (those headed by someone age 65 or older) will explode. And during this period, we project the senior homeownership rate will drop from 78 to 73 percent. As a result of these two effects, the nation will need to house an additional 5.5 million senior renter households—more than half of whom will be households of color. But nationally, we do not have enough affordable senior-friendly rental units for this growing population.
Our new state-level projections illustrate how needs differ by state and identify the states where the senior renter growth is the most rapid and the need for housing solutions is most acute.
Growth of senior renter households
Close to 70 percent of the increase in the number of senior renters will come from 15 states: California, Florida, Texas, New York, North Carolina, Georgia, Arizona, Ohio, Illinois, New Jersey, Missouri, Tennessee, Michigan, Virginia, and Washington State. The first five of those states will experience the largest growth in the number of senior renters—collectively an increase of more than 2 million renters from 2020 to 2040.
The senior renter shares will also follow different trajectories in different states. For example, New York, which currently has the highest senior renter share among all states, will see its senior renter share increase from 21 to 31 percent. New Jersey, Ohio, and Illinois will also experience similarly marked increases, in part because of an absolute decline in the number of younger renters.
Some states, like Texas, will experience a more moderate increase. Though we project the growth rate of the number of senior renters to be high, we expect the same of young renters. As a result, the senior renter share will increase from 12 to 18 percent—a smaller increase than in any other state on the list, except Washington State. Washington can expect relatively high growth in its senior renter population, but we project the younger renter population will expand faster than in any other of the 15 states with the greatest expected increase in senior renters.
Race and ethnicity of senior households
The expected growth rate of senior renters differ sharply not only by state but by race and ethnicity. The share of the change produced by white senior renters ranges from 18 percent in New Jersey to 72 percent in Missouri. Nevertheless, the trend is clear: households of color will drive much of the increase in the number of senior renters. For example, of the projected increase of 623,146 senior renters in California, 52 percent will be Hispanic renters, 16 percent will be Asian and other renters (“other” includes households that are not white, Black, or Hispanic and is a very small percentage, so we’ve grouped “Asian and others” together throughout this post), 10 percent will be Black renters, and 22 percent will be white renters. In the six states with the largest increase in senior renters, less than half the increase is projected to be white.
Focusing on individual states’ senior renter increases from 2020 to 2040, we found that the growth rate of renters of color is almost always higher than that of white renters. For example, in Georgia, the number of white senior renters is expected to increase by 53 percent, compared with 123 percent for Black senior households, 465 percent for Hispanic seniors, and 166 percent for Asian and other households. Similar patterns hold in all other states projected to see major growth in senior renters.
Emerging challenges will require federal, state, and local policy responses
Although the growth of the senior renter population will be robust nationwide, some states will face more significant challenges related to affordability and accessibility. Senior renters are more likely to be cost burdened than their homeowning counterparts, with more than half of senior renters currently spending more than 30 percent of their income on rent and close to a quarter spending more than 50 percent. Moreover, renters of color have much lower incomes and less wealth than their white counterparts because of historic, structural barriers. The expected high growth in the share of senior renters of color in most states may amplify the number of older households who will be cost burdened in the years ahead.
An increased commitment of federal, state, and local funds will be necessary to ease the near-future rental crisis for seniors, both through an increased supply of affordable rental units for senior households and through the expansion of supportive services.
At the federal level, one of the most effective programs to address the needs of senior renters is the US Department of Housing and Urban Development’s (HUD’s) Section 202 program. This program addresses both affordable supply and the connection between housing and supportive services by providing interest-free capital advances to nonprofit sponsors to finance housing that offers rental assistance and supportive housing for seniors with low incomes. Despite this program’s effectiveness and the large growth of the senior population, the number of new Section 202 units has declined dramatically over the past decade. Our projections strongly suggest the need to expand the program, targeting those areas with the greatest need for this type of housing.
To accommodate the increasing number of senior renters, many more housing units at all affordability levels will need to be made accessible to seniors, through both new construction and modification of existing housing units. Tax credits or grants at both the federal and the state and local levels, like the Low-Income Housing Tax Credit program, could fund additional construction of senior-tailored units to help alleviate affordability pressures.
Connecting housing and health services is also important, and multiple programs are available at both the federal and the state and local levels. HUD’s Supportive Services Demonstration for Elderly Households gives grants to develop multifamily housing units that aid residents’ housing stability and health care utilization. Similar state-level programs are also available. For example, in Vermont, Support and Service at Home uses housing as a platform for health services delivered through a team of housing staff and health workers. These programs should be expanded, and new programs that connect housing and health should be developed using existing successful programs as models.
Federal, state, and local policymakers all have a role to play in accommodating the coming surge of senior renters, who will need more affordable, senior-friendly housing in the next two decades. Failure to do so will not only fail one of our most vulnerable populations but will have a profound impact on their children and their communities.
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