Although recent federal budget changes for safety net programs hold some promise for the housing needs of low-income older adults, funding falls well short of what is needed, according to “The State of the Nation’s Housing 2020” report recently released by the Joint Center for Housing Studies of Harvard University. 

Program budgets increased from 2010 to 2020, including for the Rental Assistance Demonstration program, which expanded in late 2019 to include the Section 202 Housing for the Elderly program. At the same time, however, significant cuts were made to other critical programs, the report authors said. Although some funding for new homes under the Section 202 program was restored in 2018, its budget in fiscal year 2020 was still 18% lower than in 2010. 

“The economic disruption caused by the COVID-19 pandemic has underscored the stark — and growing — differences between financial secure households and those living paycheck to paycheck,” the report stated. “Many of these households had housing cost burdens even before the crisis hit, and now are facing the potential loss of their homes.

“There is no better time for policymakers to seize the moment by framing a new, comprehensive housing strategy that will reduce inequalities and advance the longstanding goal of a decent, affordable home in a suitable living environment for all.”

A distressing portrait

Overall, the report paints a distressing portrait of housing affordability in the United States for low-income older-adult households.

“The COVID-19 pandemic, social unrest sparked by long standing racial injustice, and the devastating impacts of climate change” made 2020 “excruciatingly” difficult for low-income households, according to LeadingAge, which partially funded the report. “Although low interest rates and continued growth in some sectors have bolstered homebuying and the broader economy, conditions have worsened for many households.”

The number of households headed by those aged 65 and older is increasing more quickly than any other age group, increasing by almost 1 million households each year between 2014 and 2019 and driving 80% of the increase in single-person households. 

Cost burdens

Cost-burden rates are especially high among low-income adults aged 85 or more years, according to the report. Older-adult households had the second-highest cost-burdened share in 2019, with 1.5 million of the 4 million households in that age range paying more than one-third of their incomes for housing.

Of the nation’s 33 million older-adult households, more than 5 million (15%) are characterized as severely cost burdened, meaning they spend more than half of their income for housing. For all 65-and-older owner households, 11% are severely cost burdened. 

“For older homeowners more generally, having mortgage debt can make the difference between being cost burdened and not. The share of homeowners with housing debt at age 65 and over more than doubled from 1989 to 2019, while the median loan-to-value ratio on that debt nearly tripled to 36.8%,” according to the report. “By 2019, 40.2% of older homeowners with mortgages (3.8 million) were cost burdened, compared with only 14.7% (2.4 million) of same-age owners without mortgages.”

The rentership rate for older adults continued to increase in 2019, with their numbers up 327,600. For 65 and older renter households, 30% are severely cost burdened.

Older adults with moderate cost burdens spent 31% less on healthcare and 21% less on food than same-age households without burdens, whereas those with severe burdens spent almost 50% less on both healthcare and food, according to the report.

Multigenerational housing

Growth in the number and share of older adults, along with the limited housing options that younger adults can afford, has led to an increase in multigenerational living, the report authors said. 

One fifth of adults aged 65 and older live in multigenerational households. The number of three-generation households — made up of grandparents and their adult children and grandchildren — grew over the past five years, increasing by just under 200,000 (4%) to 4.7 million.