Housing options for older adults, affordable care choices

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Summary

• Homelessness among older adults is growing across the country, and the need for affordable housing far exceeds the supply in every corner of the country.
• The time to explore housing options in your community is long before you need them; most decisions are made in crisis.
• Determining the correct level of care is essential to happiness and appropriate care.

Jacob Wackerhausen via Getty Images

Jump to:

• Affordable Housing
• Income-Based Rental Housing
• Affordable Home Ownership?
• Age-Restricted Communities
• Assisted Living, Dementia Care, and Skilled Nursing Care
• Assisted Living
• Dementia Care
• Skilled Nursing Care
• Continuing Care Retirement Communities or CCRC
• Supported Care

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Shelter from the elements is one of the essentials of life. As we age, our housing needs change, and many options are available. This article will offer a brief overview. In a year when the Senior Lawyers Division is focusing on homelessness among older adults, I will cover income-based or affordable housing, as well as options for those who are financially secure.  For many of us, a home is more than shelter from the elements; home where the heart is, where we hang our hats, where our family and memories reside.

Affordable Housing

Not all lawyers are financially secure; not all of our siblings, children, grandchildren, and neighbors are financially secure. In virtually every community in the country, the need for affordable housing far exceeds the supply. Unforeseen circumstances can lead any of us to a housing affordability crisis. So what are our options?

Income-Based Rental Housing

There are multiple state and federal programs that provide lower-cost financing to develop and provide rental homes that are available only to individuals or families with limited income and assets. The rent is generally based on a percentage of household income (usually around one-third). Others are developed using financing from tax-free municipal bonds or community reinvestment funds. These may be built and operated by local governments, non-profit charitable, or religious organizations. Some may limit residence based on age or disability. The biggest challenge with income-based rental housing is that demand far exceeds supply. In my local community, there is a wait list of over 10,000 people; the local housing authority only has 1,400 units.

Income-based rental assistance for privately owned property is also offered in most communities through what is known as the Section 8 voucher program. The assistance is based on the household income, with the tenant paying about one-third of their income in rent and the balance being paid by the housing authority. Both the property and the renter must qualify, and again, in most areas, there are lengthy wait lists for available assistance.

Affordable housing is very local. Talk to your nearest housing authority, senior center, or area agency of aging for resources in addition to exploring local faith- and community-based organizations that provide housing services.

The number of older adults seeking housing assistance has increased in recent years as rents have dramatically increased. Many of these are lifelong renters who retired 10 or 20 years ago, with an average Social Security benefit and rent that was about one-third of their income. In 2026, Social Security projects the average retirement benefit for a single person will be $2,071 a month, and the average one-bedroom apartment in urban areas rents for over $1,600 a month. Unless the person has significant other income (only about half of retirees do) or savings to draw against, the person is at risk of homelessness.

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Affordable Home Ownership?

Homeowners fare a little better, but the rising costs of taxes, utilities, insurance, and maintenance can make a home that is paid for unaffordable. For some, home equity conversion mortgages (reverse mortgages—this field should be entered with caution and good advice from trusted lawyers and advisors) can bridge the gap; selling the home puts the person into the already crowded rental market.

Many state and local governments have special financing programs for first-time home buyers and others seeking affordable homeownership. Typically, these programs provide down payment assistance or reduced down payments and lower interest rates for those who qualify.  Nearly all of these options are limited to first-time buyers, often defined as someone who has not owned a home in the recent past, with income sufficient to make the payments but below a ceiling, and has limited assets. I used one of these programs to buy my first home in 1982, with a discounted interest rate of 13.5 percent (yes, 13.5 percent). I will be forever grateful for that program helping me get my first foot on the property ladder.

In rural areas, the United States Department of Agriculture offers interest-subsidized financing for basic housing. Both the home and the buyer must qualify for this program. Over the years, other federal programs have provided assistance with affordable homeownership.

If you are looking for a way to help your local community, become an advocate for affordable housing.

When people ask me for advice on security in retirement, it is: When you retire, have a home that is paid for that you can afford to live in. When you look at the financial mistakes people make early in retirement, the lists almost always include buying or building a dream home—homes that are often too large to maintain and afford in the long term—or are in a dream vacation location that is difficult to live in year-round.

Single-family homes are the most popular housing choice outside of large cities. Homes in urban and suburban neighborhoods with tree-lined streets, rural areas with room for a huge garden, and maybe a few backyard chickens. This is the home that many people own, and when asked, most will tell you it is where they want to live out their lives. Townhouses generally share one or more side walls with neighboring homes, and the person may own a single unit, or more than one unit. (It was popular at times to build two or three units together with the owner living in one, and the other lived in by family members or rented for extra income.)

Condominiums, or condos, are a hybrid form of ownership in which the person owns an exclusive right to occupy a specific part of the building and a limited interest and usage in common areas of the building and community. Condos vary in design from single-family homes to some of the largest high-rise residential buildings in the country. In a co-op, the person owns an interest in a corporation that owns the building and is entitled to the use of specific space within the building and use of common areas based on ownership in the corporation. In all of these, accessibility is important and should be a consideration in selecting or remodeling a home.

All homes have maintenance costs. In a single-family home, the owner maintains the home.  Some expensive elements such as heating, air conditioning, and roofing may last for decades, but the cost to replace them when needed can be very substantial. (A $20,000 roof replacement can be devastating for someone living primarily on Social Security who has exhausted other savings.) In a condo or co-op, reserves for repairs and replacements should be part of the ongoing maintenance fees that each owner pays. The laws governing condo and co-op budgeting vary widely from state to state, and monitoring for compliance can be very lax. If reserves are not sufficient, owners can be responsible for “special assessments” to pay for needed repairs. I live in a condo that has strong reserves; in 40 years of operation, the community has never had a special assessment. A nearby condo building just had a special assessment of $15,000 per unit for exterior masonry repairs—that explains in part why those residents’ condo fees have always been lower than ours.

Age-Restricted Communities

Laws allow communities to restrict permanent residence to persons age 55 and older. The first of these were communities built in the sun of the desert Southwest. Today, this option is available in virtually all states. These communities bring together older adults and often include community resort – and country club–style amenities. The communities have a different feeling than the communities that include all ages. Some older adults really enjoy living in them. They often have policies that might concern some people. Generally, residence by persons under the age of 55 is very limited in number of consecutive days and or in number of cumulative days in a given time frame (often no more than 30 days in a row and no more than 30 or 60 days in a calendar year). Unforeseen changes in circumstances can create conflicts, such as when grandparents are asked to care for grandchildren or when adult children return to live with parents (even as a caregiver). To maintain the restriction, the communities can be very aggressive in enforcement. While resales in the very successful over-55 communities can be in high demand, homes in smaller or less-popular communities can be very difficult to resell due to the restricted market.

ADUs, additional or auxiliary dwelling units, are a hot topic in the past few years. In concept, these have been around for 100 years, when the carriage house in the backyard or the second story of a backyard garage was an apartment for family members or used to rent for additional income. (The Fonz lived in an ADU–an apartment over the Cunninghams’ garage.) ADUs are being promoted as a housing option for older adults: either for the older adults to live near younger family members, for caregivers to live in while providing in-home care to older family members, or to generate needed income for the homeowner. Zoning laws in nearly every community prohibited or deeply regulated the creation of ADUs from the 1960s forward. With the aging of the Greatest Generation and baby boomers, the demand for ADUs has increased, and several states have enacted laws to streamline the process for building ADUs, and many local authorities are promoting ADUs as a way to address the demand for affordable housing.

Assisted Living, Dementia Care, and Skilled Nursing Care

While nearly every adult surveyed says they want to live independently in their own home and just not wake up one morning, the reality is that somewhere between 15 percent and 25 percent of us will live the last years, months, weeks, or days of our lives living in a place that provides some level of care.

Assisted Living

Assisted Living is most like living at home, or in a really nice hotel (some are operated by subsidiaries of major hotel companies). In assisted living, each person has a private living space, often a small apartment, some in clusters of small stand-alone homes. The facility provides assistance with things such as housekeeping, laundry, reminders to take medication, transportation, and meals. Most offer assistance with personal care such as showering or bathing (often for an additional fee). The level of medical care that can be provided beyond this is controlled by state regulations and by the standards of the community. The community may or may not allow outside private health care to provide services in individual apartments. Assisted living can be ideal for a person who just needs help with activities of daily living and housekeeping. Unless the facility specifically provides supervision and activities for a person living with dementia, it is not an appropriate placement. Medical care provided to a person living in assisted living is generally paid for by Medicare or Medicaid; the cost of living there, or room and board, is generally not paid for by Medicare or Medicaid. Some long-term care insurance policies cover assisted living. But the majority of assisted living is paid for privately. Costs can vary widely from area to area, from a couple of thousand dollars a month for a community run by a nonprofit service organization to tens of thousands of dollars per month for a resortstyle community with extensive services.

Dementia Care

Many people living with dementia are physically healthy but need assistance with daily living activities and supervision or guidance to live safely. This can include help with meals, getting dressed, and laundry (they often find comfort in folding laundry). Skilled dementia care providers know how to manage behaviors and how to redirect attention from repetitive actions. Dementia care is often more supervision than it is health care.

Because Medicare and Medicaid pay for skilled nursing care, persons with dementia often are placed in skilled nursing facilities. Many of them do not need the systematic health care provided in a skilled nursing facility. Even if a skilled nursing facility has a “dementia unit,” the design of the space is often more hospital-like and less like home. If regular checks on physical health are not needed, the person may find it disturbing that someone is checking their blood pressure and recording their temperature every day. Nearly all dementia care is private pay only.

Skilled Nursing Care

Skilled nursing homes are inpatient care settings that provide health care on a daily basis or physical or occupational therapy that must be provided or overseen by licensed healthcare providers. Statistics tell us that as many as one in four of us will spend time in a skilled nursing home before we die. There are really three groups of patients who spend time in skilled nursing homes. The first group is there for short-term recovery and returns home often in a month or so. The second group is expected to die within a relatively short time–this may include hospice or palliative care patients who are unable to receive care in other settings. The third group is long-term residents, often persons living with dementia or a severe physical disability, living in skilled care for months or years. For older adults, Medicare pays a limited skilled nursing home benefit (at least part of the cost up to 100 days), then patients pay privately until funds are exhausted, then Medicaid pays. Medicaid eligibility varies from state to state and is beyond the scope of this article. Medicaid pays for over half of all skilled nursing home care in the United States.

Continuing Care Retirement Communities or CCRC

CCRCs provide all or most of the above, from individual homes, apartments, assisted living, skilled nursing care, and sometimes dementia care, all in a controlled and managed environment. They generally offer recreation, entertainment, transportation, and services, sometimes including on-site Medicare providers. The concept is that you move in once, and no matter what care you require other than complex hospital care, your care needs can be provided on campus. The contracts are complex and detailed, the cost can be high, and, kind of like the age-restricted communities, it can be hard to leave if it is not a good fit for you.

Supported Care

Like persons living with dementia who often need trained supervision more than health care, persons with developmental differences and mental health challenges often need more than a place to live. Many are able to live safe and happy lives with help and supervision, but struggle without support. This is a vast and largely unmet need in most communities.

Think Now About What You Might Need Later

As we age, where we call home may change. The time to explore the options available in your community is long before you need them. Most moves are made in a crisis. The need for affordable housing exceeds the supply in every corner of this vast country. The time to plan for housing as we age is now.

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Author

David M Godfrey

DAVID GODFREY, JD, is an author, trainer, and consultant. He retired as Director of the ABA Commission on Law and Aging in Washington DC. Prior to joining the Commission, he was responsible for elder law programming at the...

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Author

David M Godfrey

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