Study Calls for Action on Creating Senior Housing for Middle-Income Seniors

Published in the Woonsocket Call on August 18, 2019

A recently released report sends a stark warning to federal and state policy makers and to the private senior housing sector. The report forewarns that in the coming years, a large number of middle-income seniors, who need assisted living with supportive services, will be priced out of this level of care.

Seniors housing in the United States is paid out of pocket by seniors with sufficient assets. A relatively small percentage of Americans have long-term care insurance policies to defray the costs. For seniors with the lowest incomes, Medicaid covers housing only in the skilled nursing setting, but increasingly also covers long-term services and supports in home and community-based settings. Programs such as low-income housing tax credits have helped finance housing for economically-disadvantaged seniors.

The researchers call on the government and the senior housing sector to step up and to assist the projected 14.4 million middle-income people over age 75, many with multiple chronic conditions, who won’t be able to afford pricey senior housing.

According to this first-of-its-kind study that appears in the April 24 2019 edition of Health Affairs, 54 percent of middle-income older Americans will not be able to meet yearly costs of $60,000 for assisted living rent and other out-of-pocket medical costs a decade from now, even if they generated equity by selling their home and committing all of their annual financial resources. The figure skyrockets, to 81 percent, if middle-income seniors in 2019 were to keep the assets they built in their home but commit the reset of their annual financial resources to cover costs associated with seniors housing and care.

Accompanying the senior housing study are two perspective pieces in Health Affairs on how society can adapt to aging and supporting aging in communities.

The study, “The Forgotten Middle: Many Middle-Income Seniors Will Have Insufficient Resources For Housing And Health Care, was conducted by researchers at NORC at the University of Chicago, with funding provided by the National Investment Center for Seniors Housing & Care (NIC), with additional support from AARP, the AARP Foundation, the John A. Hartford Foundation, and The SCAN Foundation.

Learning About the Needs of the Emerging ‘Middle Market’

“We still have a lot to learn about what the emerging ‘middle market’ wants from housing and personal care, but we know they don’t want to be forced to spend down into poverty, and we know that America cannot currently meet their needs,” said Bob Kramer, NIC’s founder and strategic adviser in a April 24, 2019, statement. “The future requires developing affordable housing and care options for middle-income seniors. This is a wake-up call to policymakers, real estate operators and investors,” he adds.

The report notes that significant financial challenges are expected to coincide with many middle-income seniors seeking seniors housing and care properties due to deteriorating health and other factors, such as whether a family member can serve as a caregiver. The study projects that by 2029, 60 percent of U.S. middle-income seniors over age 75 will have mobility limitations (8.7 million people), 67 percent will have three or more chronic conditions (9.6 million people), and 8 percent will have cognitive impairment (1.2 million people). For middle-income seniors age 85 and older, the prevalence of cognitive impairment nearly doubles.

The researchers say that this ‘middle market’ for seniors housing and care in 2029 will be more racially diverse, have higher educational attainment and income, and smaller families to recruit as unpaid caregivers than today’s seniors. Over the next 10 years, growth in the number of women will outpace men, with women comprising 58 percent of seniors 75 years old or older in 2029, compared to 56 percent in 2014, they say.

Bringing the Public and Private Sector Together

“In only a decade, the number of middle-income seniors will double, and most will not have the savings needed to meet their housing and personal care needs,” said Caroline Pearson, senior vice president at NORC at the University of Chicago and one of the study’s lead authors.

“Policymakers and the seniors housing community have a tremendous opportunity to develop solutions that benefit millions of middle-income people for years to come,” says Pearson.

Researchers say there is an opportunity for policymakers and the seniors housing and care sector to create an entirely new housing and care market for an emerging cohort of middle-income seniors not eligible for Medicaid and not able to pay for housing out of pocket in 2029.

The study’s analysis suggests that creating a new ‘middle market’ for seniors housing and care services will require innovations from the public and private sectors. Researchers say the private sectors can offer more basic housing products, better leverage technology, subsidize ‘middle-market’ residents with higher-paying residents, more robustly engage unpaid caregivers, and develop innovative real estate financing models, among other options.

As to the public sector, the researchers call on government to create incentives to build a robust new market for middle-income seniors by offering tax incentives targeted to the ‘middle market,’ expanding subsidy and voucher programs, expanding Medicare coverage of nonmedical services and supports, creating a Medicare benefit to cover long-term care, and broadening Medicaid’s coverage of home and community-based services.

“This research sets the stage for needed discussions about how the nation will care for seniors who don’t qualify for Medicaid but won’t be able to afford seniors housing,” said Brian Jurutka, NIC’s president and chief executive officer. “This discussion needs to include investors, care providers, policymakers, and developers working together to create a viable middle market for seniors housing and care,” he says.

Adds, Lisa Marsh Ryerson, President of AARP’s Foundation, “All seniors want to live in affordable, safe and supportive housing, and more than 19 million older adults are unable to do so. We must act now to implement innovative solutions – including robust aging-in-community efforts – to accommodate what is sure to be an increasing demand for housing that meets the needs of older adults.”

Is Rhode Island prepared to meet the senior housing needs of the state’s middle-income seniors in 2029? If not, the state’s federal delegation, lawmakers, state policy makers and the senior housing industry must begin to chip away at this looming policy issue.

To view the study, go to http://www.healthaffairs.org/doi/full/10.1377/hlthaff.2018.05233.

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New Report Warns of Nation’s Housing Not Meeting Needs of Older Adults

Published in Pawtucket Times, on September 12, 2014

In the coming decades, America’s aging population is expected to skyrocket, but the nation is not ready to confront the housing needs of those age 50 and over, warns a new report released last week by the Harvard Joint Center for Housing Studies and AARP Foundation. While it is expected that the number of adults in the U.S. aged 50 and over is expected to grow to 133 million by 2030, an increase of more than 70 percent since 2000, housing that is affordable, physically accessible, well-located, and coordinated with supports and services is in too short supply, says the Harvard report released on Sept. 2.

According to Harvard Report, Housing America’s Older Adults – Meeting the Needs of An Aging Population, housing stock is critical to quality of life for people of all ages, but especially for aging baby boomers and seniors.  High housing costs currently force a third of adults 50 and over—including 37 percent of those 80 and over—to pay more than 30 percent of their income for homes that may or may not fit their needs, forcing them to cut back on food, health care, and, for those 50-64, retirement savings.

 Challenges and Issues

The Harvard report also noted that much of the nation’s housing stock lacks basic accessibility features (such as no-step entries, extra-wide doorways and lever-style door and faucet handles, and insufficient lighting, preventing older persons with disabilities from living safely and comfortably at home. Moreover, walkways, bike lanes, buses, subways, and other public transportation are not available to a majority of older adults who live in suburban and rural locations.  They become isolated from family and friends without the ability to drive.   Finally, disconnects between housing programs and the health care system put many older adults with disabilities or long-term care needs at risk of premature, costly institutionalization and readmission to hospitals.

“Recognizing the implications of this profound demographic shift and taking immediate steps to address these issues is vital to our national standard of living,” says Chris Herbert, acting managing director of the Harvard Joint Center for Housing Studies. “While it is ultimately up to individuals and their families to plan for future housing needs, it is also incumbent upon policy makers at all levels of government to see that affordable, appropriate housing, as well as supports for long-term aging in the community, are available for older adults across the income spectrum.”

*Tackling the Challenges

“What jumped out at us from this study is that when it comes to where people want to live as they age, the ‘field of view,’ if you will, has very quickly widened. People today are thinking about this at a younger age with expectations that are vastly different from their parents’ assumptions,” observes AARP State Director Kathleen Connell. “Most people are worried that retirement savings will not cover their long-term needs. They want housing that is affordable, physically accessible and well-located. But they also realize that, eventually, they’ll need coordination with supports and services. The challenges have never been more evident.

“There are many ways to approach this, with choosing healthier lifestyles very high on the list. But the report makes it clear that where we live matters,” Connell continued. “Growing older in car-dependent suburban and rural locations is a real problem because pedestrian infrastructure is generally unfriendly if you have stopped driving. That leads to isolation, which can severely compound just about any negative that comes with aging. And if access to the health care system is restricted, many older adults – especially those with disabilities – are candidates for more costly premature institutionalization. We need to pre-empt that cycle by building communities where people can better age in place

The Harvard report notes that the older population in the U.S. will continue to exponentially grow with the large number of younger baby boomers who are now in their 50s. With lower incomes, wealth, homeownership rates, and more debt than generations before them, members of this large age group may be unable to cover the costs of appropriate housing or long-term care in their retirement years.

Indeed, while a majority of people over 45 would like to stay in their current residences as long as possible, estimates indicate that 70 percent of those who reach the age of 65 will eventually need some form of long-term care. In this regard, older homeowners are in a better position than older renters when they retire. The typical homeowner age 65 and over has enough wealth to cover the costs of in-home assistance for nearly nine years or assisted living for 6 and half years. The typical renter, however, can only afford two months of these supports.

“As Americans age, the need for safe and affordable housing options becomes even more critical,” says Lisa Marsh Ryerson, President of the AARP Foundation. “High housing costs, aging homes, and costly repairs can greatly impact those with limited incomes. The goal in our support of this report is to address the most critical needs of these households and it is AARP Foundation’s aim to provide the tools and resources to help them meet these needs now and in the future.”

Making Your Community Livable

Even with this alarming report that calls on policy makers to confront the looming housing crisis for the nation’s old, a large majority of aging boomers have not reached the age where their housing needs become a serious problem.  For those choosing to age in place in their community they can plan ahead to improve their future housing options.

“AARP is committed to this because we know it’s what most people want. That’s why we encourage residents to participate in how streets, roads, sidewalks, crosswalks are designed as well as make their thoughts known on decisions regarding access to recreational space.”

On Sept. 19, AARP Rhode Island will host an Active Living Workshop at Kirkbrae Country Club in Lincoln. Nationally recognized expert Dan Burden will lead the event, which will focus on proposed improvements along New River Road in Lincoln – specifically in the village of Manville. Representatives of the RI Department of Transportation will be on hand to discuss the project and hear suggestions to make this neighborhood more walkable. Mr. Burden will conduct a sidewalks and streets survey, followed by a discussion. The one day event, involving both a classroom style session and a community walking audit, is free and includes breakfast and lunch. You can sign up by logging on to www. aarp.org/ri. Or, you can call Deborah Miller at 401-248-2654.

According to AARP Rhode Island, the goals of this bring together residents, government and elected officials to promote a shared language.

Groups invited to participate include Lincoln town officials, Lincoln Senior Services, the Bicycle Coalition, the Lincoln Police Department, the Blackstone Valley Tourism Council, GrowSmart, the RI Department of Health and the Northern RI Chamber of Commerce.

To access Housing America’s Older Adults – Meeting the Needs of An Aging Population, go to http://www.jchs.harvard.edu/housing-americas-older-adults-embargoed.

Herb Weiss, LRI ’12, is a Pawtucket-based writer covering aging, health care and medical issues.  He can be reached at hweissri@aol.com.