Crossing the Threshold: Problems and Prospects for Accessible Housing Design

by Wanda Katja Liebermann
Meyer Fellow

America is at the confluence of two opposing demographic tides. Land use law scholar Daniel Mandelker has called the movement of people with disabilities out of state institutions into communities, in the last few decades, “one of the great migrations in recent history.” At the same time, aging baby boomers, many of whom are gradually becoming disabled in housing inadequate to their changing needs, portend a national “forced migration” in the reverse direction—into nursing homes and retirement enclaves. 

As I write in my recent working paper, our aging population is increasingly the focus of new planning and policy initiatives. Their unprecedented numbers—by 2030 the population of people 65 and over will top 20 percent—and political influence create new concerns as well as opportunities to rethink the physical, social, and legal landscape of housing, infrastructure, and service provision. Because people are much more likely to develop physical and mental disabilities as they age, the visibility of the boomer generation is helping to draw attention to the fact that, according to the 2010 National Council on Disability report, 35 million households in the US in 2007 had one or more people with some kind of disability, representing 32 percent of all American households. Because elderly and disabled people share a number of these needs, concerns long considered the marginalized province of the disabled are expanding. 

Both the disabled and elderly overwhelmingly want to live in homes in “mainstream” neighborhoods, but the ability to participate in the community depends on how well the physical environment can accommodate them. A number of legal protections developed in the last few decades have shaped the possibilities for that. The most comprehensive, the Americans with Disabilities Act (ADA), covers primarily public accommodations, leaving the bulk of housing unregulated. As AARP has shown, most people with disabilities, including older adults, live in private single-family residences, the largest sector of the housing market. Yet except for a small amount of federally-funded units, single-family housing is not covered by disabled access regulations. This creates a big gap between the supply and demand for accessible housing of various kinds. 

The left shows a metal ramp kit retrofitted to a public building entrance—an example of unintegrated thinking about access. The right is an ADA-compliant hotel room bathroom, featuring the standard “beige melamine” of mass manufactured accessible components.

Sources: http://www.portawalk.com/
http://www.sleepinn.com/media/eBrochure/ebrochure/AZ/AZ805/AZ805B8.JPG

Partly because it is not regulated by the ADA, private single-family housing is an area where states and local municipalities are experimenting with policy and design approaches to create more accessible options. Without building code prescriptions for specific access requirements, programs based on ideas like visitability and universal design are cropping up around the country. Universal design is especially appealing because its approach differs from ADA-based building codes by not singling out the disabled in design but by making better functioning spaces and objects through a broader reconsideration of good design practice—“design for all.” A classic example of this is the curb-ramp, originally developed for wheelchairs, which benefits parents with strollers, travelers with luggage and delivery people. Local initiatives are becoming laboratories for developing strategies with broader application.

The curb ramp is considered a classic example of universal design: developed for wheelchairs but so practical for many other uses that it seems incredible that it wasn’t thought of earlier. 

Sources: http://wwbpa.org/2009/09/ http://www.fhwa.dot.gov/publications/research/safety/pedbike/05085/chapt8.cfm

While planners and policy makers are recognizing the important role that housing, including the private single-family home, plays in public health, homebuilders have been much slower to adopt accessibility. The history of bad design for disability, among other factors, has meant that developers and homebuyers don’t yet see the benefits of accessible features, like a no-step entry. The common belief is that accessible design is ugly, diminishes the visual appeal of homes, and is only targeted at a small, specialized segment of the market. Nevertheless, some homebuilders are recognizing the looming demand for “aging in place” and “flexible” residential design. Eskaton Livable Design, one of the most ambitious of the commercial projects, is a third-party certification system, similar to LEED (Leadership in Energy and Environment Design) for sustainable design, which packages accessible features as part of an overall practical and aesthetically appealing design. 

On the left is the Livable Design model home, built in Roseville, California, developed by Eskaton to accommodate a range of abilities associated with multi-generational households. On the right sits Mr. Blundell, who commissioned this residence built with the LifeMark certification system, developed by the New Zealand government to create new access standards for the national housing market. 

Sources: http://www.livabledesign.com/livable-design-tour/
http://www.lifemark.co.nz/the-lifemark/case-studies/case-study-blundell.aspx

There are still a number of obstacles to widespread acceptance of accessible design in housing. The current political climate makes consumer demand central to both regulatory and market reform. Yet, consumer resistance persists because of the negative perception of accessible design related to the continuing stigmatization of disability—a mutually reinforcing dynamic. While more creative and flexible approaches to improving the accessibility of housing may appeal to both homebuilders and designers, their very open-endedness may pose difficulties for implementation at a wider scale. 

And indeed, as some of the commercial initiatives evolve, they show signs of requiring similar levels of compliance with prescribed standards for certification. Real change, including the capacity to deal with the complexities of interpreting and evaluating more variable design solutions, will require a new mindset. Public officials, architects, builders, and consumers need to develop a more critical understanding of design and accessibility, away from the compliance-only approach. 

Housing Recovery Unlikely to Ease Renter Cost Burdens

by Chris Herbert
Research Director

The headlines continue to trumpet good news about the housing market, including falling vacancy rates and increased construction in rental housing markets across the country. But the flip side of this good news for the rental market is that the share of renters who face severe cost burdens, paying more than half their income for housing, has surged in recent years. As documented in our most recent State of the Nation’s Housing report, the number of renter households facing severe cost burdens reached a new record of 11.2 million in 2011, an increase of 2.5 million households since just before the recession in 2007 (see Figure 1). To make matters worse, this rise comes on the heels of what had already been a decade of worsening rental affordability; the number of renters facing severe housing cost burdens increased by 1.4 million between 2001 and 2007.  In all, the decade from 2001 to 2011 saw an increase of more than 50 percent in the incidence of severe rental cost burdens.

Notes: Severely cost-burdened households spend more than 50 percent of pre-tax income on housing costs. Source: JCHS tabulations of US Census Bureau, American Community Surveys.

To a substantial degree, the sharp rise in renter cost burdens reflects the significant growth in the number of low-income renters who are most likely to struggle to afford housing.  Between 2007 and 2011 the Great Recession pushed the number of renters earning less than $15,000 up by 1.8 million, while those earning between $15,000 and $30,000 rose by 1.1 million. ($15,000 roughly corresponds to what is earned by those working year round at the federal minimum wage.) But over the same time frame, rising rents made it even more likely that households within these income bands would face severe burdens.  Over this four year period, the share severely burdened households among those earning less than $15,000 rose from 67 to 71 percent, while among those earning between $15,000 and $30,000 the share rose from 29 to 33 percent.

But while the number of low-income renters has risen sharply, the supply of housing they can afford has at best remained stagnant (see Figure 2).  In 2011 there were 12.1 million extremely low-income renters who earned 30 percent or less of median incomes in the areas where they lived.  (This is a common income cutoff for eligibility for housing vouchers and is roughly equivalent to our $15,000 threshold but is adjusted for differences in area incomes and family size.)  Meanwhile, there were only 6.8 million rental units affordable at this income cutoff, representing a gap of 5.3 million housing units.  The shortage of affordable housing is made worse by the fact that many of these affordable units are occupied by higher income households. When the number of units affordable for extremely low-income households and available to them is considered, the supply gap in 2011 was even larger – 7.9 million units.  The magnitude of this supply gap testifies to the fact that it is nearly impossible to produce new housing at such low rents, and almost as difficult to maintain existing housing. In fact, 650,000 housing units renting for less than $400 a month in 2001 were permanently lost from the housing stock by 2011.

Note: Extremely low-income households earn less than 30% of area median income.

Source: JCHS tabulations of US Census Bureau, American Housing Surveys.

With the market unable to supply housing affordable for the nation’s lowest-income households, addressing the problem of rising rent burdens may largely come down to efforts to increase household incomes. But there will always be some households facing temporary financial struggles and others facing long-term challenges who will need more assistance to afford decent housing. Currently, only one in four of those eligible for federal assistance are able to obtain subsidized housing. Those who do are among the nation’s most vulnerable families and individuals – 35 percent are disabled, 31 percent are age 62 or older, and 38 percent are single parents with children. With the population of households struggling to afford housing at record levels and continuing to expand, there is a compelling need to assess whether existing resources for assisted housing are both sufficient to meet the need and being used effectively through current programs. 

But while options for reforming the housing finance system have been subject to a vigorous debate, to date the issue of how to address the significant problem of rental housing affordability has received relatively little attention.  The Bipartisan Policy Center’s (BPC) Housing Commission report this past year was a notable exception as it both framed the importance of this issue and advanced specific policy options that should be considered. 

The next snapshot of renter cost burdens will come this fall when the 2012 American Community Survey is released.  But as we showed in this year’s State of the Nation’s Housing report, rents are continuing to increase in markets across the country, against a backdrop of continued stagnation in household incomes. As a result, it is likely that this more up-to-date data will once again find that rental housing affordability has only gotten worse. Hopefully, the BPC report will start a dialogue on what should be done to address this urgent problem.

Are More Older Americans Retiring with Mortgage Debt?

by Irene Lew
Research Assistant

As the first wave of baby boomers prepare for retirement, it would be easy to assume that they’ve paid off their mortgage and credit card debt. However, data from the Census Bureau’s Survey of Income and Program Participation (SIPP) shows that older Americans today are grappling with mounting debt levels, even into their retirement years.  Among households aged 55 to 64, total median household debt jumped from $42,654 in 2000 to $70,000 in 2011—a 64 percent increase—while households aged 65 and over are now carrying more than twice the amount of household debt they were carrying a decade ago.  Even more surprisingly, older Americans had a larger increase in total median household debt than younger households, with the amount of total median household debt among householders under the age of 35 growing by a relatively modest 13 percent between 2000 and 2011.

Note: Percent changes are based on 2011 dollars.

Source: US Census Bureau, Survey of Income and Program Participation (SIPP), 1996 and 2008 Panels. 

The increase in debt among older Americans has been driven by a spike in the number of households who hold secured debt, which includes mortgages and home equity loans, even into their retirement years. According to data from the Survey of Consumer Finances, the share of households aged 65 and over with mortgage debt has nearly doubled over the past 20 years, from 21 percent in 1989 to 40 percent in 2010; among households aged 55-64 during the same time period, the share grew from 46 percent of households in 1989 to 69 percent in 2010. Just between 2001 and 2010, there was a 10 percent increase in the share of households aged 55-64 with mortgage debt and a 14 percent increase in the share of households aged 65 and over with mortgage debt.

Source: JCHS tabulations of Survey of Consumer Finances. 

It’s not just that more seniors are carrying mortgage debt; they are also saddled with much higher mortgage debt than they were carrying 20 years ago.  Although the median mortgage debt of all homeowners who are still carrying mortgage debt has increased from nearly $54,000 in 1989 to $109,000 in 2010, among homeowners aged 65 and over there was a 76 percent increase in the median amount of mortgage debt, from $15,180 in 1989 to $63,000 in 2010 (after adjusting to 2010 dollars).

While the dramatic rise in the share of older Americans with mortgage debt is partly the result of easily-accessible credit before the Great Recession (when many Americans took out home equity loans, extended mortgage terms, or refinanced their homes and took out cash), there is also evidence that older households were not spared from the Great Recession. A 2011 AARP study points out that, post-recession, a larger share of older homeowners with mortgages, particularly those with incomes below $23,000, are paying 30 percent or more of their income for housing costs. In fact, 96 percent of homeowners aged 50 and older with mortgages, who have incomes under $23,000, pay 30 percent or more of their income for housing.

Furthermore, a recent report from the Consumer Financial Protection Bureau (CFPB) indicates that more senior households are taking out reverse mortgages. According to the report, 70 percent of reverse mortgage borrowers in 2010 opted to take the full amount of the loan as a lump sum at closing, up from just 2 percent of borrowers in 2008. While data is not available on how they use these funds, this dramatic increase raises concerns about whether borrowers will have sufficient financial resources to cover their expenses later in life.

Childless Households Have Become the Norm

by George Masnick
Fellow

In 1960 almost half of all households were families with children under 18.  Since then, the number has fallen to under 30 percent (Figure 1).  By definition, the declining share of family households with children exists because households without children have increased more rapidly (Figure 2).  There are many reasons for this trend: delayed age at marriage and later age at childbearing, smaller family sizes, higher divorce rates, and more couples choosing not to have children (Table 1).  The changes in each of these measures over the last few decades are quite striking. In 1960 the median age at first marriage was 22.8 for men and 20.3 for women, compared to 28.6 and 26.6 in 2012.  The share of households with four or more people in 1960 was over 40 percent, falling to just under 23 percent in 2012.  Women who were 25 in 1960 ended their childbearing years in the mid 1980s with only 8.5 percent of them remaining childless. Women born in 1960 finished childbearing in 2010 with nearly twice as many of them childless (16.3 percent). In 1960, only 13 percent of all households were single persons, but by 2012 that percentage had risen to 28. All of these trends result in households having fewer children and fewer households having any children at all. (Click charts to enlarge.)

Source: Current Population Survey March and annual Social and Economic Supplement, 2012 and earlier. Table FM-1.  Minor children numbers from Census Bureau's population estimates for July 1 of each year.

Source: Current Population Survey March and annual Social and Economic Supplement, 2012and earlier. Table FM-1

Source: Census Bureau Current Population Survey historical tables.

The interesting aspect of this long-term trend is that it continued in spite of the strong upswing in the sheer number of American children, which grew after 1990 (also Figure 1).  That increase is due to the largest baby boomers having their own children (the echo boom) and to childbearing by the flood of immigrants who arrived between 1985 and 2005.  (Note that in 2012, fully 87.5 percent of children under the age of 18 who have an immigrant parent were themselves born in this country.) 

To be sure, baby boomer and immigrant childbearing did increase the actual number of households with children.  For example, the number of households with children under the age of 18 increased from 33.3 million in 1985 to 38.6 million in 2012. This 5.3 million increase was far less than the 11.3 million increase in total number of children in the population over this period because many households with children contained two or more children under the age of 18.  More importantly, however, the increase in households without children surpassed the 5.3 million growth of households with children by a considerable margin.

Two key reasons for the recent increase in childless households have been the aging of the population and increasing longevity. The large baby boom generation (age 45-64 in 2010) is now entering the empty nest stage (at least regarding children under 18). Between 2002 and 2012, households with at least one child, headed by today’s 45-64 year old cohort, declined by 12.3 million. There are still 11.5 million 45-64 year old headed households with children, and most will become households without children over the next decade.  Furthermore, empty nest households headed by those over the age of 65 are surviving longer and longer, making it likely that the trend in the decline of households with children will continue well into the future.

Significantly, the decline in the number of households with children accelerated after 2007.  Much of the decline can be explained by the sharp drop in the number of births. Annual births rose from just over 4 million in 2001 to over 4.3 million in 2007, the highest on historical record, but then fell to just below 4 million in 2011.  The total fertility rate (births per 1000 women age 15-44) fell from 69.5  (a 17 year high) to 64.4, a decline of 7.3 percent over this same period. Both the decline in births and the drop in the fertility rate are linked to the decline in immigration that followed the Great Recession. Because newly arrived immigrants are concentrated in the childbearing ages, and because immigrants have higher fertility than the native born, the loss of immigrants has had a disproportional effect on declining fertility.  The effect of the Great Recession on lowering fertility among the native born is also of importance, but this decline could be temporary.  The echo boom generation began to turn 25 in 2010, and has most of its childbearing years yet ahead of it. A return to higher levels of immigration and/or a rebound in fertility could reverse the decline in number of births and ease the long-term decline in the share of households with children, but will not likely reverse it.

As Baby Boomers Age in Place, They Will Increase Their Influence in the Home Improvement Market

by Kermit Baker
Director, Remodeling
Futures Program

Over the coming decade, the home improvement market will increasingly rely on older homeowners to generate growth. A previous post pointed out that baby boomers will continue to control a large segment of the housing stock nationally, that they have low mobility rates, and that they have continued to improve their homes as they prepare to age in place. Going forward, baby boomers have significant motivation to spend on home improvements.

They also have the financial resources to do so. By staying in the workforce longer, baby boomers often have sufficient incomes to undertake these improvements. Moreover, because older households were able to benefit from the run-up in stock prices and home values more than younger households, they typically have seen greater gains in wealth. The net result is that home improvement expenditures by older owners have grown faster than for younger ones.

As their longevity has increased, coupled with their uncertainty over future economic conditions, seniors have been more inclined than comparable groups in prior decades to remain in the labor force. The labor force participation rate (the share of the population that is working or actively looking for work) for the age 55 plus population increased from 30.1% in 1990 to 40.2% in 2010 according to the U.S. Department of Labor. They project that it will continue to inch up for this group in coming years.

While incomes for older workers have held up better than those of their younger counterparts, the biggest difference has been in the wealth positions of these households. Older families, who were able to benefit from both the run-up in stock prices and home values, are generally in a much better financial position now than their younger counterparts. Between 1995 – when both the stock market and housing market began to accelerate – and 2010, median family net worth increased by almost 34%. However, it increased significantly more for older households, with families age 75 and older having a net worth 133% greater than their counterparts in 1995.

Source: Federal Reserve Board, Survey of Consumer Finances

Not only was the upside greater for older families over this period, but the recent downturn has been significantly milder. While median family net worth declined over 35% from 2007 – when both stock prices and home values were near their market peak – to 2010, it declined less than 30% for those aged 55 to 64, and even increased modestly for families aged 75+.

Though families aged 55 to 64, the leading edge of the baby boom generation and therefore a key demographic to watch, haven’t done as well as older families in recent years in holding onto their net worth, their situation still looks promising. Typically more highly leveraged during the growth years, this leverage often worked against the leading edge baby boomers during the downturn. Still, by 2010, the median net worth of this group had increased more than 55% from 1995 levels, compared to 34% for all families. Coupled with incomes that have held up better than their younger counterparts since 1995, this leading edge of the baby boom generation is entering its retirement years in a generally comfortable financial position.

Greater longevity and lower mobility have given older households the incentive to improve and modify their homes so that they are able to comfortably and safely age in place. Higher incomes and greater wealth have given them the ability to do so. Average spending by homeowners on home improvement projects has increased about 30% over the past decade. However, while gains have been more modest for owners under age 55, they have increased by over 50% for those over age 55.

Source: JCHS Tabulations of the 2001 and 2011 American Housing Surveys

The combination of greater numbers of baby boomers aging in place and greater per owner spending on home improvement projects has dramatically shifted the composition of the home improvement market. In 2001, owners age 55 or older accounted for less than 32% of home improvement spending in the owner-occupied residential market. By 2011, this had grown to 45%. So, while the influence of baby boomers on the new residential construction market may be waning, they are a growing force in home improvement activity.

Over the Next Two Decades, Baby Boomers will Age in Place

by George Masnick
Fellow

Over the next two decades, the entire baby boom generation (age 45-64 in 2010) will cross the 65+ age threshold. Baby boom homeowners have dominated housing markets for so many decades that it is easy to imagine them exercising a large influence during the next two decades as they move into their senior years. A recent report from the Bipartisan Policy Commission makes just that case, arguing that the next twenty years should see significant additions to the housing stock released by aging baby boomers because of discontinued household headship and death.

But this report fails to underscore that the vast majority of baby boom household dissolution won’t occur until after 2030. Only about 15 percent of the 46+ million units baby boomers now occupy will be turned back to the market between now and 2030, assuming cohort household dissolution rates held constant at 2000-2010 levels. This works out to about 1 million total baby boomer housing units returned to the market between 2010 and 2020, and another 6.2 million between 2020 and 2030.  For owner-occupied housing, these numbers are 165,000 during 2010-2020 and 5.2 million between 2020 and 2030.  If baby boomers are healthier and live longer than their immediate predecessors, these numbers should be even lower.

Source: Joint Center calculations of household counts in 2000 and 2010 Decennial Censuses. Assumes cohort attrition rates held constant at 2000-2010 levels.

If more than 85 percent of baby boomers will continue to occupy housing as household heads for the next two decades, can we say anything with confidence about how they will affect housing markets?  Housing analysts have mostly focused on housing adjustments that aging boomers will likely make by moving – to smaller or one-story homes (perhaps in communities that are scaled to be less automobile dependent); to retirement destinations that are warmer, have lower taxes, or are “senior oriented” in terms of services and leisure opportunities; or to locations closer to kids and grandkids. Eventually, some will find themselves moving to assisted living. While during the next two decades many boomers will do all of these things, the majority of boomers will almost certainly not do any of them.  The majority of baby boom homeowners over the next two decades will simply age in place. 

By aging in place, boomers will likely follow existing trends among older homeowners. Elderly owners are the least mobile demographic group. Less than three percent of owners age 65-74 change residences in any given year, and this fraction has been declining, while for owners age 75+, the share that moves in a given year is now about 1.5 percent.  Such low mobility rates result in elderly homeowners having increasing durations of residency in their present homes: the older the owner, the higher the proportion with long-term residency. Indeed, according to the American Housing Survey, the majority of homeowners age 65+ have lived in their homes for 20 or more years (Figure B). These patterns have changed little over the past decade.

Source: Joint Center tabulations of 1999, 2003, 2005 and 2009 American Housing Surveys.  The 2004 data are averages of 2003 and 2005.

Aging in place does not necessarily mean that housing adjustments fail to take place.  Renovation and remodeling activity will allow those aging in place to repair, modernize, and reconfigure their homes.  Some of this remodeling activity will take place before age 65 to prepare the home for aging in place.  The 50s and early 60s are an ideal time to undertake major remodeling projects – the kids have fledged the nest and the still-employed parents have some additional disposable income.  Past trends suggest that while there is some fall-off in total remodeling spending after owners turn age 65, elderly owners will remain fairly active in spending on renovation and repair (Figure C).  More detail about aging in place and remodeling activity is the subject of a forthcoming Joint Center working paper.

Source: Joint Center tabulation of 2009 American Housing Survey.