#Housing - FRG Consultants

What’s Red, Blue and Gray All Over?

The population of the United States is rapidly growing older. According to the US Census Bureau, the number of older Americans is projected to more than double from 2010 to 2050. And by 2030, Americans 65 and older are estimated to represent over 20% of the total population. Technological advances and modern medicines are contributing to a greater number of seniors each year.

Question: Is the country prepared to meet the housing needs of this growing demographic?

According to the US Census Bureau, as of July 2022, there were approximately 144 million housing units in the US and of those housing units almost two thirds are owner occupied. Seniors living in lower income households cannot find the means to adequately update their homes to meet their needs as they age. Aging in place is becoming more of a challenge for this demographic group due to high home maintenance cost, interest rates, and a reduced income as seniors rely on social security and/or part-time work.

Several state governments are paying attention and trying to make it easier to age in place. The Institute for Taxation and Economic Policy (ITEP) provides a list of states that offer lowered property tax options, renter’s aid and reverse mortgages through HUD’s Home Equity Conversion Mortgage (HECM) program. For example, Iowa’s legislature recently passed bill SF 619 for the Elderly and Disabled Homeowners. The bill allows income qualified seniors to exempt $3,250 of taxable value of their primary residence for the 2023 tax year and $6,500 for the 2024 tax year. Similarly, Connecticut’s state law offers an income-based property tax credit up to $1,000 for single homeowners.

Without more awareness and action to proactively push funding through legislation for affordable senior housing, the “I’ll think about that someday when I get a little older” will be tomorrow and our nation may not be ready.

The Struggle to Find Home Sweet Home

As our MAI appraisers complete multifamily housing commercial appraisals and rent comparability studies (RCS) for HUD and private clients, FRG has extensive multifamily housing knowledge. And as a result FRG has a great deal of interest in remedies to the affordable housing shortage.

I can still remember signing my first apartment lease. I was 19 years old and excited to move into my very own 500 sq-ft, one bedroom, one-bathroom home. Well it wasn’t all mine, because I could not afford the apartment, thus I had a roommate. Even with a roommate, this was the first time I felt like a responsible adult.

Unfortunately, many today are struggling to find a place to call home. Nationally, the number of renters has reached historic highs, and as a result it is becoming increasing difficult for many to find safe, quality affordable housing. In fact, according to a Harvard University Housing Study the availability of affordable rental housing is being affected by:

High rental demand and low vacancy rates, which allow landlords to continually increase rental rates
Demand from higher income renters is driving the construction of luxury vs affordable multifamily rental housing

A recent Ohio Housing Finance Agency report that assessed the state’s housing needs noted that lower income Ohioans are struggling to pay for housing as they spend more than 30% of their income on housing. The agency discovered that there are only 43 available and affordable rental units for every 100 extremely low-income renter. And these extremely low-income renter households are typically made up disproportionately with seniors and/or small children.