The Continued Growth of Multigenerational Living

by Shannon Rieger
Research Assistant

A substantial number and share of older Americans are living in “multigenerational” households, according to our analysis of recently released 2015 American Community Survey (ACS) one-year population estimates. In total, 20.3 percent of all non-institutionalized adults aged 65 and over – about 9.4 million people – live in multigenerational households that include at least two generations of adults (individuals over the age of 25). The ACS data also show large differences in the prevalence and composition of multigenerational homes by age, race, and ethnicity.

The new data not only reflect the fact that there are a growing number of older Americans, but also that the share of older Americans living in multigenerational homes has been growing steadily since the 1980s. These trends are likely to continue as baby boomers age. Importantly, multigenerational living might allow some older Americans to enjoy a higher quality of life while aging in place, as an overwhelming majority of people want to do. At the same time, for some families of limited means, multigenerational living may be a financial necessity rather than a desirable living situation. Regardless of why they are choosing multigenerational living arrangements, providing families with education and support to suitably modify their homes could help these arrangements be as safe, effective, and beneficial as possible.

Who Lives in Multigenerational Homes?

About two-thirds of the 9.4 million older adults living in multigenerational homes live in households that have exactly two adult generations (usually parents and adult children aged 25 or older). The rest are in three-or-more-generation households that typically include grandparents, adult children, and grandchildren.

Trends in multigenerational living also change with age (Figure 1). The share of people living in multigenerational settings is highest for individuals in their late 20s (mostly due to adult children still living at home), then drops for those in their 30s as young adults move out and form their own households. The share rises again for people in their early 40s until peaking at about 23 percent for people in their late 50s. This “sandwich” age group includes people who are living with their adult children, those who are living with their aging parents, who often need daily support and care, and those living with both their children and aging parents.

Notes: Multigenerational households are those with least two adult generations aged 25 or older or that include grandchildren, adult children, and grandparents. Householders and parents are considered “adults” regardless of age. Other household members include extended family members (e.g. aunts, uncles, nieces, nephews) and unrelated individuals. Source: JCHS tabulations of US Census Bureau, 2015 American Community Survey 1-year Estimates. 

Because adult children move out and elderly parents pass away, the share of people living in multigenerational households declines for people who are in their 60s and early 70s. However, the share rises steadily for older adults in their mid-70s, who often are starting to face more daunting health and financial challenges. Among the oldest age groups (aged 85 and over), 27 percent – about 1.5 million people – lived in multigenerational households in 2015.

In addition to differences in age, people of color and foreign-born individuals are far more likely to live in multigenerational settings than non-Hispanic whites and people born in the United States (Figure 2). More than 25 percent of native-born blacks, Hispanics, and Asians/others aged 65 and over live in multigenerational homes, as do more than 45 percent of foreign-born in all three of these groups. In contrast, 15 percent of native-born non-Hispanic whites of the same age, and just over 20 percent of foreign-born non-Hispanic whites, live in multigenerational households. 

Notes: Whites, blacks, and Asians/others are non-Hispanic. Hispanics may be of any race. Multigenerational households are those with least two adult generations aged 25 or older or that include grandchildren, adult children, and grandparents. Householders and parents are considered “adults” regardless of age.

Source: JCHS tabulations of US Census Bureau, 2015 American Community Survey 1-year Estimates. 

A sizeable subset of these multigenerational homes include at least three generations: usually grandparents, adult children, and grandchildren living together under the same roof. Roughly ten percent of native-born blacks, Hispanics, and Asians/others aged 65 or over live in such households, along with around 25 percent of foreign-born older adults in each group. Among non-Hispanic whites, just under 4 percent of older native-born adults and 7 percent of the foreign-born live with three or more generations.

Looking forward, projected growth and demographic shifts in the older population seem likely to increase the number of multigenerational households and the share of people living in those households. The U.S. Census Bureau’s most recent population projections estimate that by 2035, about 79 million Americans will be age 65 or older, an increase of more than 30 million people in just two decades. This growth is due to the fact that the baby boom generation is getting older and because with increases in longevity more people will live well into their 80s, 90s, and beyond.  In fact, the Census Bureau projects the number of “oldest old” adults aged 85 and over to double over the next two decades.

The racial and ethnic composition of the older population will also shift markedly over the next several decades. The non-Hispanic white share of the 65-and-over population is projected to drop nearly ten percentage points to 69 percent by 2035, while the black, Hispanic, and Asian shares will rise, respectively, by 20 percent, 67 percent, and 39 percent (Figure 3). Census Bureau projections estimate that the foreign-born share of the 65 and over population will also continue to increase, growing from 13 percent in 2015 to 19 percent in 2035. Though the direction of future residential preferences among the older population is uncertain, the sheer magnitude of growth in the older population and the fact that much of the growth will be among the very old, people of color, and the foreign born suggests there will be substantial growth in multigenerational households in the coming years. 

Notes: Whites, blacks, and Asians/others are non-Hispanic. Hispanics may be of any race.   

Source: JCHS tabulations of US Census Bureau, 2014 Population Projections. 

Impacts on Housing and Services

As this growth occurs, it will be important to consider how new and existing housing stock might be designed or modified to best meet the needs of multigenerational households. Universal design features including single-floor living, zero-step entrances, and hallways and doorways wide enough to accommodate wheelchairs, walkers, or strollers can make homes more accessible for older adults with mobility limitations as well as for their young grandchildren. Flexible layouts that can change as family needs evolve, as well as the addition of semi-private spaces for each generation (such as in-law suites with separate entrances, multiple master bedrooms or kitchens, and accessory dwelling units), can also help make the housing stock better suited for multigenerational households.

While multigenerational living works well for many households, it is important to note that it is not necessarily a desirable option for every family. Rather, multigenerational living may be a financial necessity rather than an attractive housing option not only for families with lower incomes but also for moderate-income families living in higher-cost areas. Further, sharing a home with multiple generations can be challenging, particularly if the house is small, has inadequate amenities, or there are unclear or unrealistic expectations about responsibilities for both finances and personal care. Finally, informal help from family members may not be an adequate replacement for professional care, particularly for aging adults with serious health conditions. Providing families with guidance about how to live successfully in multigenerational settings, and, perhaps, with financial assistance to make home upgrades and modifications, will therefore be critical if multigenerational living is going to be an appealing, comfortable option for families of all means. While designing and carrying out such policies and programs will be challenging, such efforts have the potential to provide a more appealing and cost-effective housing option for older Americans and their families.

New Report: Aging Homeowners Drive Growth in Remodeling as Millennials Begin to Gain Footing

Homeowner spending on remodeling is expected to see healthy growth through 2025, according to Demographic Change and the Remodeling Outlook, the latest biennial report in our Improving America’s Housing series. Demographically based projections suggest that older owners will account for the majority of spending gains over the coming years as they adapt their homes to changing accessibility needs. Although slower to move into homeownership than previous generations, millennials are poised to enter the remodeling market in greater force, buying up older, more affordable homes in need of renovations.

The residential remodeling market includes spending on improvements and repairs by both homeowners and rental property owners, and reached an all-time high of $340 billion in 2015, surpassing the prior peak in 2007. [See our Interactive Infographic.] Spending by owners on improvements is expected to increase 2.0 percent per year on average through 2025 after adjusting for inflation, just below the pace of growth posted over the past two decades, and about on par with expected growth in the broader economy.

The large baby boom generation has led home improvement spending for the past twenty years, and its influence shows no signs of waning. Older homeowners will continue to dominate the remodeling market, as they make investments to age in place safely and comfortably. Expenditures by homeowners age 55 and over are expected to grow by nearly 33 percent by 2025, accounting for more than three-quarters of total gains over the decade. The share of market spending by homeowners age 55 and over is projected to reach 56 percent by 2025, up from only 31 percent in 2005.

Gen-Xers are now in their prime remodeling years, and while some are still recovering from home equity losses after the housing crash, many in this generation will undertake discretionary projects deferred during the downturn. And as younger households move into homeownership, they will supplement the already thriving improvement market.

Try the Interactive Infographic

“With national house prices rising sufficiently to help owners rebuild home equity lost during the downturn, and with both household incomes and existing home sales on the rise, we expect to see continued growth in the home improvement market,” says Kermit Baker, director of the Remodeling Futures Program at the Joint Center for Housing Studies.

Even though increasing house prices are encouraging homeowners to reinvest in their homes, they also are raising housing affordability concerns among younger buyers. Climbing mortgage interest rates and rising house prices not only make homeownership more difficult for younger households, but leave those who are able to buy with fewer resources to make improvements and repairs. And while high rents may provide an incentive to buy homes, they also make it difficult for first-time buyers to save for a downpayment.

Some demographic trends are also presenting challenges to a healthier remodeling market outlook. A disproportionate share of growth over the coming decade will be among older owners, minority owners, and households without young children; groups that traditionally spend less on home improvements.

“Despite these challenges, the remodeling industry should see numerous growth opportunities over the next decade,” says Chris Herbert, managing director of the Joint Center for Housing Studies. “Strong demand for rental housing has opened up that segment to a new wave of capital investment, and the shortage of affordable housing in much of the country makes the stock of older homes an attractive option for buyers willing to in invest in upgrades.”

Finally, as a new generation of homeowners enters the remodeling market, specialty niches focused on energy-efficiency, environmental sustainability, and healthy homes are likely to see significant growth. Home automation—encompassing everything from entertainment systems to home energy management, lighting, appliance control, and security—is also emerging as a strong growth market, particularly among younger households.

Looking ahead, there are several opportunities for further growth in the remodeling industry. The retiring baby boom generation is already boosting demand for accessibility improvements that will enable owners to remain safely in their homes as they age. Additionally, growing environmental awareness holds out promise that sustainable home improvements and energy-efficienct upgrades will continue to be among the fastest growing market segments.

Read the full report, try the Interactive Infographic, or join the conversation on Twitter with #HarvardRemodeling.

Four Challenges to Aging in Place

by Jennifer Molinsky
Senior Research Associate

Within 20 years, one in five Americans—almost 80 million people—will be older than 65 and, surveys indicate, they will want to remain in the current homes for as long as possible. However, the country currently lacks the accessible housing units and supportive social services needed to accommodate these desires.

Four challenges are particularly noteworthy, according to Projections and Implications for Housing a Growing Older Population, a recent Joint Center report which also projected that the share of households headed by someone over 65 will grow from 29.9 million today to 50 million in 2035. In particular:

• Most U.S. homes are not accessible for older people with limited mobility
• Many older Americans living at home will need long-term care, which is expensive
• Millions of older adults cannot afford their current housing units
• Older adults who live at home are often isolated

Challenge #1: Making Housing Accessible

A growing older population will mean greater numbers of households that include someone with a disability (Figure 1). Indeed, the Joint Center projects that by 2035, 17 million older households will include at least one person with a mobility disability for whom stairs, traditional bathroom layouts, and narrow doors and corridors may pose challenges, a 77 percent increase from today. Yet only 3.5 percent of US housing units offer a zero-step entrance into the home, single-floor living, and wide doorways and hallways that accommodate someone in a wheelchair.

Notes: Mobility disability is defined as difficulty walking, getting in and out of bed, and climbing one flight of stairs; self-care disability as difficulty eating, dressing, toileting, and bathing; and household activity disability as difficulty with meal preparation, food shopping, using the telephone, taking medication, money management, housework, and driving.
Source: JCHS tabulations of University of Michigan, 2014 Health and Retirement Survey.

The costs of improving safety and accessibility range from free (e.g. removing throw rugs) to costly (e.g. a new addition to enable single-floor living). Preparing ahead, at a time when the no one in the household has limited mobility disabilities, can help lower the financial and emotional cost of these changes—for example, during a bathroom remodel, adding reinforced walls can make the later addition of grab bars much simpler, while choosing a walk-in shower can eliminate the need to add one later. For some, merely identifying modification needs and finding a contractor or handyman to make changes can be daunting. Consequently, resources that can connect people to trustworthy sources to assess the home and find capable workers will be an important part of any efforts to support aging in place.

However, a sizeable share of homeowners will need financial assistance to make these changes. Today nearly 10 percent of all older homeowner households have less than $50,000 in total assets including the value of their homes. (Excluding the value of the home, 39 percent have less than $50,000.) Going forward, trends in income, wealth, and debt suggest that older adults may have even fewer assets in the future. Helping older adults with limited means finance modifications through tax credits, low- or no-interest loans, grants, or expanded Medicaid waivers for needed modifications will be important.

Renters, particularly those living in older, less accessible units, may be in more difficult straits. Even though federal law generally requires that landlords allow tenants with disabilities to make necessary changes to their units, renters—whose median wealth is only $6,000—typically must do so at their own expense. Furthermore, landlords may require the modifications be removed at renters’ expense upon leaving.

Challenge #2: Providing Long-Term Care 

The Joint Center projects that the number of older adult households in which at least one person has a self-care disability will reach 12 million by 2035; many of these households will require daily assistance with personal care if they are to stay in their homes. (This is consistent with an often-cited 2005 study by Peter Kemper, Harriet L. Komisar and Lisa Alecxih estimating that nearly 70 percent of adults who reach the age of 65 will need some form of long-term care later in life.) Indeed, this type of care is increasingly being offered in people’s homes. Nursing home usage has declined in the past two decades, a trend likely to continue as health and housing partners build partnerships to deliver care at lower cost to private residences. In addition to assistance with personal care, by 2035, we project that 27 million older Americans will need help with other household tasks such as shopping, housework, or paying bills.

Yet long-term care currently is expensive. The median monthly cost for a home health aide working five days per week is $3,813. The typical older renter could afford just two months of these services before exhausting their savings. While the median older homeowner is better situated, many have limited resources—and as noted above may need these to make modifications to their homes.

Today most assistance is provided by family members, including spouses, at least in part because of high costs. However, in the future fewer family members will be available to the next generation of older adults, because the number of households with few or no children, as well as single-person households, will rise. For individuals, factoring in the potential costs of paying for in-home support and care is an important part of planning for aging in place, but policy has a role as well in encouraging innovation of cost-effective care delivery in the home.

Challenge #3: Ensuring that Housing is Affordable 

Affordability is and is likely to remain a significant obstacle to aging in place. In 2014, 31 percent of older households were cost-burdened (i.e. they spent more than 30 of their income on housing). Holding cost-burdened shares by age, race/ethnicity, and tenure constant, the Joint Center projects that by 2035, 17.1 million older households will be housing cost-burdened, and 8.5 million of these households will be spending more than 50 percent of their income on housing.

Given lower incomes, older renters are more likely to be cost-burdened. However, with a homeownership rate approaching 80 percent for older households, owners are more numerous and make up the majority of cost-burdened older households. In particular, owners who carry mortgages into older ages—a trend that has increased over the past 20 years—are at higher risk of experiencing unaffordable housing costs. Households that are housing cost-burdened typically cope by cutting back on other necessities, such as food, healthcare, or transportation. These tradeoffs put older adults’ health at risk and limit their opportunities to engage in their communities and access needed services.

For homeowners, the challenge of high housing costs might be met with prudent and early financial planning, reverse mortgages or refinancing, relief from property taxes, or help increasing home energy efficiency and lowering utility costs. Renters have fewer options, as rental subsidies are in short supply. By 2035 the Joint Center projects that the number of older adults eligible for rental housing subsidies will grow to 7.6 million from just under 4 million today. Currently the nation provides subsidies to only about one-third of those eligible; simply maintaining this level for seniors in 2035 would require providing subsidies to an additional 1.3 million households, which would more than double the number of older people who are being assisted today.

Challenge #4: Reducing Isolation

Ensuring older households are able to connect with their neighbors and access services in their communities and beyond is as critical to aging in place as preparing one’s home and finances. One can be isolated anywhere, even in a city if streets are perceived as unsafe, or if friends or needed services are not nearby. There are, however, ways to capitalize on a localized population of older adults to deliver services, through organizations like “villages” or those that serve naturally occurring retirement communities (NORCs), such as large apartment complexes that are home to significant numbers of older people.

Isolation is a particular concern for those aging in low-density and rural locales. The new study found that that just under half of older households are located in areas of metro regions with less than one housing unit per acre, or outside metro regions entirely (Figure 2). When older adults curtail or give up driving—a share that exceeds 50 percent for those in their mid-80s and above—people living in these locations can be particularly isolated.

Notes: Areas are defined as census tracts. High-density metro areas have at least 2028 housing units per square mile; medium-density metro areas have between 644 and 2028 housing units per square mile; and low-density metro areas have less than 644 housing units per square mile. Connected and isolated non-metro areas are defined using USDA Rural-Urban Commuting Area codes.
Source: JCHS tabulations of 2010-2014 American Community Survey 5-Year Estimates and USDA Rural-Urban Commuting Area codes.

Alternative transportation, such as paratransit or car-share services, as well as technology that enables virtual medical appointments and social interaction, will be key. But individuals in these lower density areas, and the organizations and governments that serve them, will need to consider how to expand programs to ensure older adults can access services and remain engaged in their communities.

Moving Forward

These challenges do not mean that aging in place is an impractical or an unworthy goal, but rather that there is much planning to be done at both the individual and societal level. Educating households about the financial and physical challenges they might face if they remain in their current home and the options available to address them is an important first step. So is ensuring that local governments understand and plan for the challenges their older residents will likely face.

For some, though, alternatives to a current residence may prove to offer a higher quality of life. Therefore, we also need to create new housing options that offer accessibility features, are located near to shopping and services (or in a multifamily building that provides services), offer flexible space (perhaps including space that can be occupied by caregivers if needed), and are aimed at a people with range of incomes, including low-income renters. Developing housing with these features in the centers or downtowns of small towns and suburbs where older adults already live can provide alternatives that allow longtime residents to maintain ties to their communities. Since one in three US households will be headed by an older adult within 20 years (up from one in five today), we need to start taking these and other steps as soon as possible.

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Jennifer Molinsky will be a panelist at our March 6 event Housing and Policy in an Aging America. This event will be free and open to the public.

New Report: Number of Older Adults in the US Expected to Surge, Highlighting Need for Accessible Housing and Policy Improvements

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By 2035, more than one in five people in the US will be aged 65 and older and one in three households will be headed by someone in that age group, according to our new report, Projections and Implications for Housing a Growing Population: Older Adults 2015-2035, released today. This growth will increase the demand for affordable, accessible housing that is well connected to services beyond what current supply can meet.

As the baby boom generation ages, the US population aged 65 and over is expected to grow from 48 million to 79 million, and the number of households headed by someone over 65 will increase by 66 percent, to nearly 50 million. This growth will increase the demand for housing units with universal design elements such as zero-step entrances, single-floor living, and wide halls and doorways.  However, only 3.5 percent of homes offer all three of these features.

“The housing implications of this surge in the older adult population are many,” says Chris Herbert, managing director of the Joint Center. “and call for innovative approaches to respond to growing need for housing that is affordable, accessible and linked to supportive services that will grow exponentially over the next two decades.”

In the coming years, many older adults will have the financial means to pay for appropriate housing and supportive services that allow them to live longer in their own homes. However, many others will face financial hardships, particularly because their incomes will decline in retirement. Low-income renters are particularly vulnerable, notes the report, which projects that nearly 6.4 million low-income renters will be paying more than 30 percent of their income for housing by 2035. The report adds that 11 million homeowners will be also be in this position by that time. In total, the report estimates, 8.6 million people will be paying more than half their income for housing by 2035. The report also projects that 7.6 million older adults will have incomes that would qualify them for federal rental subsidies by 2035, an increase of 90 percent from 2013. “Today, however, we only serve one-third of those who qualify for assistance,” says Jennifer Molinsky, a senior research associate at the Joint Center and lead author of the report. “Just continuing at this rate—which would be a stretch—would leave 4.9 million people to find affordable housing in the private market.”

The report notes that in many surveys, older adults express a strong desire to live at home for as long as possible. Achieving that goal will require public and private action to support modifications to existing homes, take steps to address the affordability challenges facing both owners and renters, and adapting the health care system to enhance service delivery in the home. There is also a need to expand the range of housing options available to better meet the needs of an aging population and improve options for older adults to remain in their community when their current home is no longer suitable. 

“The implications of our aging US population on the housing industry are unambiguous,” says Lisa Marsh Ryerson, President of AARP Foundation, which provided funding for the report. “It will be imperative, in the coming years, that the housing industry, policymakers, and individuals take action to address the need for housing that will enable millions of older adults in this country to live with security, dignity, and independence.”

Read the full report

Join the conversation on Twitter: #harvardhousingreport

Bipartisan Policy Center Task Force Recommends Integrating Health and Housing to Support Aging in Place

by Jennifer Molinsky
Senior Research Associate

The Bipartisan Policy Center’s Senior Health and Housing Task Force recently released Healthy Aging Begins at Home, a report and set of policy recommendations centered on integrating health care, supportive services, and housing to support the nation’s rapidly expanding older population. As the 65 and over population is projected to soar from 48 to 74 million over the next fifteen years, the report brings into focus some core challenges.

Surveys show that most older adults prefer to age in place; indeed, a 2014 AARP survey found that nearly 90 percent of those 65 and older agree or strongly agree that they would like to remain in their current homes for as long as possible. Yet as the incidence of mobility and other disabilities rises with age, only 1 percent of existing housing units have five key universal design features (no-step entry, single-floor living, lever-style handles on doors and faucets, wide halls and doorways, and accessible electrical controls) that can allow those with disabilities to live safely at home. Millions will also need support with homemaking and personal care, but costs of in-home assistance can be substantial. 

Indeed, the Joint Center’s Housing America’s Older Adults report has shown that the typical renter 65 and over can afford just 2 months of homemaker or home health aides before depleting all assets. And while the physical and financial barriers to aging in place are high, the nation will also have to contend with rising Medicare and Medicaid expenditures.

The crux of Healthy Aging Begins at Home is that the challenges of aging in place, as well as rising health care costs, can both be moderated by better integration of health care and housing. For example, relatively small investments in grab bars, lighting, and other modifications can help avert falls among older adults that can end or severely impair an individual’s independence, and that cost an estimated $34 billion in health care costs annually. Helping older adults modify their homes for safety and accessibility can help them remain independent in their own homes longer, precluding moves to more costly congregate care. Similarly, the task force's report finds Medicare, Medicaid, and hospitals should look to homes as a site for preventive health care as well as supports and services that help older adults age in place while also reducing costs. Among a number of examples, the report points to the Independence at Home Demonstration program, created under the Affordable Care Act, which uses home-based primary care for Medicare holders with multiple chronic conditions, saving over $25 million in the program’s first year.

While healthy aging indeed does begin at home, for a host of reasons the best home may not be the current home. As the BPC report notes, “[I]t may be the case that living alone, socially isolated, in a single-family home is not the most appropriate or healthiest living situation, particularly for a frail senior. America needs a broader perspective: the aspiration should be to help seniors not just to age in place but to age with options.” In a recent report from the Milken Institute on The Future of Aging, Joint Center Managing Director Chris Herbert echoes this point, noting the importance of aging “in the right place.” This may mean a home that is smaller, more physically accessible, more affordable, or less isolated. Since one size will not fit all, a range of housing choices is needed, including in older adults’ existing communities, which would allow for a move but help people retain social and family ties. With three-quarters of older adults residing outside of central cities, this means new options in suburbs, small towns, and rural areas.

We particularly need options for the millions who pay too much for inadequate, inaccessible, or otherwise unsuitable housing. Recent Joint Center analysis shows that older adults aged 75 and over have the highest incidence of all ages of severe cost burdens, paying more than 50 percent of their income for housing. While there’s a higher incidence of cost burdens among older renters, with the older population's high homeownership rate and low incomes, greater numbers of older owner households face severe burdens (Figure 1). Unfortunately, we expect cost burdens among older adults to worsen as the population grows: a recent report by the Joint Center and Enterprise Community Partners projects that severe burdens are expected to rise by 39 percent among those aged 75 and over and 42 percent among those aged 65-74 by 2025. 

Notes: Cost burdens are defined as housing costs more than 50% of household income. 

JCHS tabulations of US Census Bureau, American Community Surveys. 

Indeed, while Healthy Aging Begins at Home calls for integrating health care, supportive services, and housing, it makes the compelling argument that this is not possible without housing that is affordable: 

One thing is clear: all bets are off in bridging the health-housing divide if seniors lack access to affordable housing. Affordable housing is the glue that holds everything together: without access to such housing and the stability it provides, it becomes increasingly difficult, if not impossible, to introduce a system of home- and community-based supports that can enable successful aging.

Toward this end, Healthy Aging Begins at Home calls for the expansion of the Low Income Housing Tax Credit program to finance and preserve affordable rental housing, including units for low-income older adults. In close alignment with this recommendation, on May 19, Senator Maria Cantwell and Chairman Orrin Hatch of the Senate Finance Committee introduced a bill, the Affordable Housing Credit Improvement Act (S 2962), to increase support for LIHTC by 50 percent. The report also recommends a host of other policy changes including support for senior supportive housing through the US Department of Housing and Urban Development's Section 202 and new programming, coordination of federal resources for home modifications, expansion and creation of new state and local efforts to support the financing of home modifications, integration of health care and long term services and supports for Medicare beneficiaries who live in publicly-assisted housing, a focus on fall prevention within Medicare and other federal programs, and greater reimbursement of telehealth and other technologies that make it easier to monitor and coordinate care for people living independently. Some of these policies require additional investments but have longer-term payoffs in terms of reduced health care costs.

The Joint Center’s own Housing America’s Older Adults report concludes that though the challenges are vast, the largest impacts on healthcare and housing are still a decade away, giving the nation time to begin to make needed changes to our housing stock, communities, and health care systems. That too was the message at the release of Healthy Aging Begins at Home: with so much at stake, the time to act is now. 

Disability Housing - Best Practices and New Solutions

Micaela Connery
2015 Research Fellow

This summer I’m moving. Again. It will be my sixth “residence” since graduating college. Over the last seven years, home has included a three bedroom apartment in Somerville, my parent’s basement (Cellar Dwellers Unite!), a grad school dorm where adults regress to freshman status, full-size bunk beds on the Lower East Side (full-size bunk beds are a real thing), and a bedroom that was actually a closet found somewhere deep in a Brooklyn craigslist. Despite all the quirks that came with each dwelling place—communal showers, head whacks on the top bunk, et cetera—each one was home in some special way.

But, for many adults with disabilities, a suitable home is hard—sometimes almost impossible—to come by. In the time that I moved five times, hundreds of thousands of individuals with disabilities across the U.S. have sat on housing waitlists. They’re waiting, often many years, to make just one crucial move, the move out of their parent’s home into community or independent living. The United States spends over $77 billion dollars annually on special education, often working to prepare individuals with disabilities to be successful, independent, and included. Yet those opportunities for independence inclusion are almost non-existent after exiting the school system. We spend billions in public funds preparing individuals with disabilities for opportunities they may never be able to have.

The most obvious issue here is funding and availability of housing offerings. Most state agencies who are on the front lines of addressing this need are finding there simply isn’t enough public funding to support placements and support services for the high number of individuals with disabilities who need it. As state developmental services budgets are cut and numbers of adults with disabilities increase, the challenge is only growing over time.

While increasing funding (or at least preventing budget cuts) is a key part of the solution, it will only incrementally address the growing waitlists for housing services. Absent an increase in the supply of suitable housing options, funding alone won’t likely fix the problem. Many providers, families, and organizations have taken it upon themselves to innovate new solutions to housing placements; experimenting with different operational structures, engaging private funders, rallying parent support, and innovating new housing models. By understanding what makes these innovative models effective, and where they face challenges, policymakers can better support new solutions for the disability housing crisis. With support from the Joint Center, I spent last summer examining a few of these approaches and what we can learn from them, and have reported my findings in the paper “Disability Housing: What’s happening? What’s challenging? What’s needed?”.

Perhaps the most obvious finding from spending time with consumers and providers is that one size does not fit all. While there are some common best practices—engaging families, supporting choice, linking to employment and transit, and retaining quality staff—there is not one single housing type or model that is right for all people with disabilities. As for people without disabilities, what people want their home to look like varies greatly. Some people desire an apartment in a city while other prefer a house with lots of land in a more rural neighborhood. Some people want to live alone and other want to be surrounded by lots of friends, family, and activity. Policies must support a range of options and choices for individuals with disabilities.

The second key issue in finding housing solutions is the right to risk, meaning that housing options shouldn’t be unduly constrained by concerns about residents safety. A right to risk would bring a willingness to innovate and provide support for experimenting with new models. Policymakers and regulators, perhaps wary of litigation, seem to be resistant to anything that may lead to failure or risk. They want to protect people with disabilities, sometimes at any cost. But people with disabilities should be allowed to take risks themselves and providers should be supported to innovate with new approaches. While we should protect people as best we can, we can’t let protection stifle new ideas. The only way disability housing can improve is if we give it space to innovate, and even make mistakes.

While providing housing and adult services for people with disabilities presents challenges, it’s also full of opportunities. It’s an opportunity to better integrate our communities. Thinking about these issues helps us reexamine what it means to support quality and affordable housing for all populations, not just those with disabilities. It’s an opportunity to re-evaluate and innovate around how we create communities, connect with our neighbors, and age within our homes. With the right program design and service delivery, we can start to change the predominant concerns of parents of children with disabilities. No longer will they worry, “Where will my child live after I die?” or “Who will care for my child?” Instead, they can wonder: “Which housing option is right for my child?” And most of all: “What community will be lucky enough to have my child as a member?”

Individuals with disabilities and advocates have been fighting for thoughtful supports, inclusion in communities, and independent living since the 1960s. The challenge isn’t new, but the solutions will need to be.

Micaela Connery was a summer research fellow for the Joint Center for Housing Studies. She is an MPP Candidate at Harvard Kennedy School focusing on disability, inclusion, and community development. She is a member of the inaugural class of New World Social Enterprise Fellows at the Center for Public Leadership at Harvard. She will continue with her studies as a Mitchell Scholar in the Fall of 2016, pursuing her MBA at the Smurfit School at University College Dublin.

She is presenting a Housing Studies Seminar on this topic at noon on Friday, April 27, 2016 at the Joint Center offices. See our calendar listing for more information.

The Future of Renting Among Older Adults

Jennifer Molinsky
Senior Research Associate

Since 2005, the number of renter households aged 50 and over has increased dramatically, jumping from 10 to nearly 15 million, and accounting for more than half of all renter growth over the past decade, as my colleague Dan McCue pointed out in a recent post. This is not just a result of the large baby boom cohort passing age 50, but is also a distinct increase in the rate at which older adults are renting. As these trends are likely to continue, it’s concerning that the nation’s current supply of rental housing suitable to the needs and preferences of older renters is insufficient, particularly in relation to affordability and physical accessibility.

The baby boom cohort, now aged 50-69, is responsible for most of the increase in older renters. In the last decade, the boomer generation fully passed into the 50+ category, and going forward, this cohort will continue to drive up the number of renters in their 70s and beyond (Figure 1).

Notes: Projected renter growth assumes constant homeownership rates by age, race, and household type.  Constant rates are the average of rates from 2014 and 2015. Historical growth uses 3-year trailing annual averages to reduce volatility.
Sources: JCHS tabulations of US Census Bureau, Current Population Surveys and 2013 JCHS household growth projections.

However a growing older population is only part of the story: more than half the growth in older renters stems from a decline in homeownership and subsequent increase in the share of those 50 and over who rent, a legacy of the foreclosure crisis and recession. As our 2014 report on housing for older adults noted, the homeownership rate for 50-64 year olds slipped 5 percentage points between 2005 and 2013—a larger drop than in the nation’s overall homeownership rate over that period. For these owners-turned-renters, transitioning back to homeownership can be especially difficult as retirement approaches: the imperative to save for retirement may take precedence over saving for a downpayment, while weak credit may make it difficult to obtain a mortgage. Though some may make their way back to homeownership despite these challenges, it is likely that the higher rentership rates among the boomer cohort will persist as the group ages.

While the recession pushed many into renting, other older homeowners are transitioning to renting as a choice. For these owners, rentals may offer a smaller, more cost-effective option that demands less time, physical effort, and money to maintain. As mobility limitations increase with age, older owners also turn to renting to obtain more accessible housing, with features like single-floor living, no-step entries into the unit, walk-in showers, and other universal design elements. As the large baby boom population enters the 70-plus age range in the next decade, we can expect a swell in the number of older renters seeking accessibility features that can enhance safety in the home, independence, and quality of life.

It remains to be seen whether baby boomers will elect to make these moves earlier than their predecessors. With growing interest in walkable communities, proximity to transit, and back-to-the-cities living, we may see earlier turns to renting as a choice. But even if not, the sheer growth in older households and the falloff in owning compared to previous generations at the same age indicates strong growth in older renter households going forward, even absent further declines in homeownership.

The question then is whether the nation’s supply of rental units is suited to the needs and preferences of older renters. Like renters in general, older renters have lower median incomes than their home-owning counterparts. But since incomes decline in retirement, older renters also have lower median incomes than renters in general (Figure 2). Lower incomes leave a significant share of older renters vulnerable to housing cost burdens. Indeed, 55 percent of renters aged 65 and over are cost burdened, spending more than 30 percent of their income on housing, including 30 percent who spend more than half their income on housing. Older cost-burdened renters typically spend less on food, healthcare, and transportation – and for those in their 50s and early 60s, save less for retirement, threatening financial security down the road.

Notes: Real Median Incomes are as of 2014 and have been adjusted for inflation using the CPI-U for all items.

Source: JCHS tabulations of US Census Bureau, 2015 Current Population Survey.

As noted below, older renters are more likely to have disabilities than younger renters, as well as homeowners of the same age (Figure 3). Yet the supply of accessible units is limited; less than 1 percent of US rentals include five basic universal design features (a no-step entry, single-floor living, wide hallways and doors, electrical controls reachable from wheelchair height, and lever-style handles on doors and faucets). Units in newer, larger buildings are apt to offer more, yet still, just 6 percent of units in buildings constructed 2003 and later, and 11 percent of units in larger apartment buildings with 20 or more units, offer all five of these features. And newer rentals tend to command higher rents, leaving them out of reach to lower-income households with disabilities.

Notes: For individuals age 15 and older, a disability is defined as a hearing, vision, cognitive, ambulatory, self-care, or independent living difficulty. White households are non-Hispanic. Includes non-group quarters population only.

Source: JCHS tabulations of US Census Bureau, 2012 American Community Survey.

Indeed, older adults seeking housing that is both affordable and accessible face particular challenges. The current affordable stock tends to be older and located in smaller multifamily buildings that are the least likely of any rentals to offer accessibility features. Two-fifths of renter households in their 50s and 60s live in apartments in small buildings with 2-9 units (Figure 4), which are among the oldest and least accessible units in the entire rental stock. Meanwhile, over a third live in single-family rentals whose accessibility varies widely by region, with renters in the Northeast and Midwest at particular disadvantage for single-floor living.

Source: JCHS tabulations of 2013 American Housing Survey, US Department of Housing and Urban Development

In addition to lower-cost and more accessible rentals, we will likely see an increase in demand for rentals with services that enhance older adults’ quality of life. Many older adults are not in need of assisted living or skilled nursing care, but could benefit from services such as transportation, laundry, or housekeeping that can support independent living into older ages. For lower-income adults, service-enhanced housing, where services are provided onsite, or service networks that support older renters scattered in multiple locations, can fill a role that their higher income peers can obtain through “village” membership organizations or the more independent portions of continuing care retirement communities.

With renters 50 and over now comprising a third of the renter population – and renters 40 and over representing fully half – now is the time to consider the suitability of the nation’s rental stock for older renters and begin to address its shortfalls in accessibility and affordability. There is an urgent need to create more accessible units, through new construction or retrofit, suitable and affordable to older adults. This is particularly true for the oldest cohort, which has both the lowest median income of all renters and the highest rate of disability, and which will grow in size as the baby boomer generation ages into their 70s. Meanwhile, service-enhanced rental housing can play a critical role in extending independence and quality of life for those lower-income renters who do not need skilled nursing care or assisted living, but who could benefit from services that support independent living. 

Aging Society and Inaccessible Housing Stock Suggest Growing Need for Remodeling

by Abbe Will
Research Analyst

Over the coming decades, the number and share of U.S. households age 65 and over will rise dramatically as the oldest members of the baby-boom generation reach retirement age. Inevitably, with increasing age comes the growing presence of disability and problems using components of the home without assistance. Surely, some aging households will look to move into homes that are better suited to their changing needs, but the majority of older households continue to plan to “age in place.” Since much of the housing stock is currently ill-equipped with even basic accessibility features, older homeowners aging in place will need to invest in retrofitting their homes in order to age comfortably and safely. New research released by the Joint Center sheds light on the implications of an aging society for the home improvement market by analyzing the remodeling activity by older owners and estimating the projected demand for and supply of homes with basic accessibility features in the near future.

Older homeowners have already been exerting significant influence on the home remodeling market due to changing trends in longevity, mobility, wealth, homeownership rates, and labor force participation. Since 2007, the share of total market spending for home improvements by owners age 55 and over has increased considerably, from less than a third to nearly a half by 2013. Reaching $90 billion in 2013, spending by older owners was just 6 percent less than during the last market peak in 2007 and for the first time surpassed the share and level of spending by middle-age homeowners. Combining historical spending data from the American Housing Survey with recent consumer housing survey data of expected spending from the Demand Institute suggests that total improvement expenditure by older homeowners could surge by an additional $17 billion annually over the next three years.

The Joint Center estimates that of the over 25 million households age 65 and over today, 44 percent have some need for home accessibility features due to disability or difficulty using components of the home, such as kitchen or bathroom facilities, without assistance (Figure 1). And yet the current housing stock is not especially equipped to meet the accessibility needs of an aging nation, as not even a third of homes have what could be considered basic accessibility features, such as a no-step entry and bedroom and full bathroom on the entry level (Figure 2). Although 45 percent of older homeowners plan to undertake improvement projects in the next several years with the intent of making their homes easier to live in as they age, surprisingly few owners are focused on home accessibility as part of aging in place comfortably and safely. Given the attitudes of today’s older homeowners, the remodeling industry will need to bridge a substantial mismatch between owners’ wanting to age in place and their actually being able to do so safely with appropriate accessibility features.

Note: Households with accessibility need are defined as those with a disabled member or members with serious difficulties using components of the home without assistance. For more detail, see Appendix A in Abbe Will, Aging in Place: Implications for Remodeling, JCHS Working Paper, July 2015. Source: JCHS tabulations of HUD, American Housing Survey.

Note: Basic accessibility features are defined as a no-step entry and bedroom and full bathroom on the entry level of the home. Source: JCHS tabulations of HUD, American Housing Survey.

As the number and share of older households rise sharply over the coming decade, construction of new housing with basic accessibility features is projected to fall considerably short of increased demand in the Northeast and Midwest regions of the country. Fully 40 percent of the net gain in households age 65 and older with accessibility needs in these regions is projected to have unmet demand, suggesting the need for significant retrofit spending on existing homes to narrow this supply-demand gap (Figure 3). Older households in the South and West regions of the country are already better accommodated for aging in place, with relatively more homes in these regions having basic accessibility features, and this trend is not expected to change over the coming decade. Ultimately, the dramatically rising number of older households aging in place, strong and growing home improvement spending by older owners, and the unsuitability of the current housing stock for safely and comfortably aging in place all support the expectation for substantial growth in demand for homes with accessibility features moving forward.

Note: Basic accessibility features include a no-step entry and bedroom and full bathroom on the entry level of the home. Source: Abbe Will, Aging in Place: Implications for Remodeling, JCHS Working Paper, July 2015.

Challenges Ahead in Housing America’s Very Low-Income Older Adults

by Jennifer Molinsky
Research Associate

The nation’s older population has grown tremendously since the first of the baby boomers turned 50 in the mid-1990s, with the number of 50-64 year olds nearly doubling between 1990 and 2010. As the baby boomers continue to age, the population aged 65 and older is projected to soar to 73 million by 2030, an increase of 33 million in just two decades. Given a larger older population, and assuming that the current income distribution remains the same, we can expect to see an increase in the numbers of lower-income older adults; indeed, in just a decade we estimate that households 65 and over earning less than $15,000 annually will increase by 37 percent to 6.5 million. Ensuring these low-income older adults are safely and affordably housed will require a great deal of leadership, creativity, and planning, particularly in the present federal budget environment.

Currently, the majority of low-income households aged 65 and over live in housing considered “unaffordable:” fully 73 percent of those with annual incomes under $15,000, and 48 percent of those with incomes between $15,000 and $30,000, were housing cost burdened in 2013 according to the American Community Survey, paying  more than 30 percent of their income on housing. Housing-cost burdened households have less to spend on critical needs like food, healthcare, and transportation (Figure 1), and for those in their pre-retirement years, on retirement savings—which has consequences not just for quality of life today, but also for financial security in the future.

Notes: Moderately (severely) cost  burdened households spend 30–50 percent  (more than 50 percent) of income on housing costs. Lowest spending quartile is a proxy for low-income households. 
Source: JCHS tabulations of the US Bureau of Labor Statistics, 2013 Consumer Expenditure Survey.

We’re already seeing a growth in the older low-income population. The number of households aged 62 and over earning less than 50 percent of area median income (a common eligibility threshold for rental assistance programs for the “elderly”) increased by 21 percent from 2003 to 2013 to almost 4 million. At latest estimate in 2011, only about a third of this group benefits from rental assistance (HUD, 2013). Of those who do not, a substantial number face worst case housing needs – defined as living in severely inadequate units, paying more than 50 percent of their income on housing (with the repercussions of reduced spending on other necessities mentioned above), or both. According to HUD, nearly 1.5 million very low income older households had worst case housing needs in 2013 – an increase of 31 percent from 2003 to 2013.

Going forward, assuming income distributions remain similar to today, the expanding older population means millions more older renters will have very low incomes and potential housing affordability problems in the years ahead. Just to keep the share receiving federal rental assistance at its current level, the number of older renters receiving assistance would have to rise by 900,000 by 2030 – which would still leave 3-4 million income-eligible renters without assistance and on their own to find housing in the private market (Figure 2), vulnerable to worst case housing needs. On top of these concerns, even as the need for assisted housing is growing, contracts for hundreds of thousands of units of units with project-based rental assistance are set to expire over the next decade.

Sources: JCHS tabulations of US Department of Housing and Urban Development, Worst Case Needs Reports to Congress 2011, and JCHS 2013 Household Projections.

These estimates are based on current income distributions, yet current trends may reshape the income profile of older adults in the future.  Fewer of today’s workers earn pensions that have traditionally provided support for moderate-income retirees.  According to the Bureau of Labor Statistics, 35 percent of all private industry workers were covered by pensions in the early 1990s, a rate that stood at only 18 percent in 2011. Increasing numbers of American have 401(k) plans but these have not resulted in the same savings achieved through pension benefits. Meanwhile, real incomes have been falling for those in their pre-retirement years, while housing and non-housing debt have been increasing for those 50-64, likely reducing assets that can be drawn upon later in life.  In addition, the older population of the future will be more racially and ethnically diverse, reflecting shifts in the population as a whole; this may shift the income distribution for older adults downward, as African Americans and Hispanics have historically had lower incomes (as well as homeownership rates).

With rapid population growth and worrisome trends in income, debt, and savings, preserving and creating more affordable units and ensuring sufficient subsidy to meet the needs of older low-income renters requires action at all levels. At the local level, communities can encourage the production of market-rate but lower cost housing options, including accessory dwelling units, rental housing in town centers, and apartments located near safe and accessible transit (particularly important because low-income renters are less likely to own cars). Though changing local regulations to allow such development and overcoming NIMBY opposition to rental housing pose challenges, increasing affordable housing options is important not just to older adults who wish to age in their communities, but also to cost-burdened rental households of all ages and composition.

Securing the resources that will help preserve and build new assisted units and ensure the availability of rental subsidies for those at the bottom of the income scale is undoubtedly an immense challenge, particularly given that pressures on non-discretionary portions of the federal budget (including Medicare, Medicaid, and Social Security) are also growing as the population ages. Yet looking holistically at the role of affordable housing in older adults’ overall health may help make the case that safe, affordable housing creates savings to the federal budget through the healthcare system. HUD and HHS are now working together to study the benefits of coordinated health services and supportive, affordable housing in Support and Services at Home (SASH) program in Vermont; evidence from this and other studies may point to the fiscal wisdom of investing in affordable housing for older adults. 

New Report: U.S. Home Improvement Industry Outpaces the Broader Housing Recovery

In the aftermath of the Great Recession, the U.S. home improvement industry has fared much better than the broader housing market, according to our new report. Emerging Trends in the Remodeling Market. While residential construction is many years away from a full recovery, the home improvement industry could post record-level spending in 2015.

A number of factors have contributed to the strengthening remodeling market: following the housing bust, many households that might have traded up to more desirable homes decided instead to improve their current homes; federal and state stimulus programs encouraged energy-efficient upgrades; and many rental property owners, responding to a surge in demand, reinvested in their properties to attract new tenants.

Additionally, with the economy strengthening and house prices recovering, spending on discretionary home improvements (remodels and additions that improve homeowner lifestyles but which can be deferred when economic conditions are uncertain) rose by almost $6 billion between 2011 and 2013, the first increase since 2007.

Improvement spending, however, has not been evenly distributed across the country. Homeowners in the nation’s top 50 remodeling markets accounted for a disproportionately large share—nearly 60 percent—of overall improvement spending. Thanks primarily to their higher incomes and home values, owners in metro areas spent 50 percent more on improvement projects on average than their non-metro counterparts in 2013 (see interactive map).  

The remodeling industry also faces a radically different landscape than before the recession. “After years of declining revenue and high failure rates, the home improvement industry is, to some extent, reinventing itself,” says Kermit Baker, director of our Remodeling Futures Program. “The industry is finding new ways to address emerging growth markets and rebuild its workforce to better serve an evolving customer base.”

Looking ahead, there are several opportunities for further growth in the remodeling industry. The retiring baby boom generation is already boosting demand for accessibility improvements that will enable owners to remain safely in their homes as they age. Additionally, growing environmental awareness holds out promise that sustainable home improvements and energy-efficient upgrades will continue to be among the fastest growing market segments.

Millennials, however, are the key to the remodeling outlook. “The millennials’ increasing presence in the rental market has already helped lift improvement spending in that segment,” says Chris Herbert, managing director of the Joint Center. “It’s only a matter of time before this generation becomes more active in the housing market, supporting stronger growth in home improvement spending for decades to come.”

Download the full report, infographic, and media kit.

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