PPA 419 – Aging Services Administration Lecture 7a – Demographic, Economic, and Political Factors Related to Housing for the Elderly.

PPA 419 – Aging Services PPA 419 – Aging Services AdministrationAdministration

Lecture 7a – Demographic, Economic, and Political Factors

Related to Housing for the Elderly

SourceSource

• Daniels, R. Steven. 1994. Demographic, economic, and political factors related to housing for the elderly. Chapter 17 in W. Edward Folts and Dale E. Yeatts, eds., Housing the Aging Population: Options for the New Century (pp. 369-390). New York: Garland Press.

• Daniels, R. Steven. 1994. Demographic, economic, and political factors related to housing for the elderly. Chapter 17 in W. Edward Folts and Dale E. Yeatts, eds., Housing the Aging Population: Options for the New Century (pp. 369-390). New York: Garland Press.

IntroductionIntroduction

• Shelter is a basic human need. The presence or absence of adequate, safe, reasonably priced, and accessible housing directly affects a household's quality of life (Pynoos, 1987).

• Shelter is a basic human need. The presence or absence of adequate, safe, reasonably priced, and accessible housing directly affects a household's quality of life (Pynoos, 1987).


• Older adults are less likely to move, and are, therefore, more likely to develop considerable psychological attachment to their "home“.

• The elderly are more likely to have difficulty maintaining a house and may find a structure increasingly unsuited to their needs.

• Older adults are less likely to move, and are, therefore, more likely to develop considerable psychological attachment to their "home“.

• The elderly are more likely to have difficulty maintaining a house and may find a structure increasingly unsuited to their needs.


• Further, substantial proportions of the older population (especially minorities, the poor, renters, and older people with outstanding mortgages) pay more than 30 percent of their income for housing.

• Further, substantial proportions of the older population (especially minorities, the poor, renters, and older people with outstanding mortgages) pay more than 30 percent of their income for housing.


• Despite the obvious importance of housing as an issue for the elderly, housing policy has generally not received much attention from the federal government or from advocates for the elderly.

• Despite the obvious importance of housing as an issue for the elderly, housing policy has generally not received much attention from the federal government or from advocates for the elderly.


• Reasons for neglect:1. Proportionally, the elderly have benefited more than other

groups from federal housing assistance programs;2. Most elderly own their homes and are aided by

homeowner deductions for mortgage interest and property tax abatement or exemption programs available in most states;

3. The housing agenda is dominated by much stronger and better organized producer groups;

• Reasons for neglect:1. Proportionally, the elderly have benefited more than other

groups from federal housing assistance programs;2. Most elderly own their homes and are aided by

homeowner deductions for mortgage interest and property tax abatement or exemption programs available in most states;

3. The housing agenda is dominated by much stronger and better organized producer groups;


• Reasons for neglect (contd.):4. The elderly have had difficulty generating

enough political support to help create a national housing policy, especially at a time when the federal government is rapidly moving away from housing as a priority; and

5. The parameters of federal support for housing itself are somewhat outside the influence of housing interest groups.

• Reasons for neglect (contd.):4. The elderly have had difficulty generating

enough political support to help create a national housing policy, especially at a time when the federal government is rapidly moving away from housing as a priority; and

5. The parameters of federal support for housing itself are somewhat outside the influence of housing interest groups.

The Demographic Context of Elderly Housing Policy


• Recent demographic trends in the United States suggest that the demand for elderly housing will increase in the next few decades.

• In 1985 the elderly represented almost 12 percent of the total U.S. population. By 2050, nearly 23 percent of the U.S. population will be sixty-five or older.

• Recent demographic trends in the United States suggest that the demand for elderly housing will increase in the next few decades.

• In 1985 the elderly represented almost 12 percent of the total U.S. population. By 2050, nearly 23 percent of the U.S. population will be sixty-five or older.



• More important for housing policy is that the characteristics of the elderly population will also change in some significant ways.

– Those eighty-five and over will make up an increasing proportion of the older population (more vulnerable and frail).

– More men will survive into old age, increasing the sex ratio.

– Percentage of minorities will increase from 10% of older population to 21%.

• More important for housing policy is that the characteristics of the elderly population will also change in some significant ways.

– Those eighty-five and over will make up an increasing proportion of the older population (more vulnerable and frail).

– More men will survive into old age, increasing the sex ratio.

– Percentage of minorities will increase from 10% of older population to 21%.



• All three trends may generate increased demand for supportive housing.

• All three trends may generate increased demand for supportive housing.

The Economic Context of Elderly Housing Policy


• Today's elderly are generally believed to be better off, economically, than their predecessors.

– Real adjusted family income between 1970 and 1987 grew nearly 50 percent for the elderly while growing only 20 percent for all families and unrelated individuals.

– Poverty rate declined from 22% in 1959 to 12% in 1987.

• Today's elderly are generally believed to be better off, economically, than their predecessors.

– Real adjusted family income between 1970 and 1987 grew nearly 50 percent for the elderly while growing only 20 percent for all families and unrelated individuals.

– Poverty rate declined from 22% in 1959 to 12% in 1987.



• However, considerable variation exists within elderly population.

– Women, the elderly over seventy-five, and minorities are all overrepresented among those living below the poverty level. Further, these groups are more dependent on Social Security as their sole source of income

• However, considerable variation exists within elderly population.

– Women, the elderly over seventy-five, and minorities are all overrepresented among those living below the poverty level. Further, these groups are more dependent on Social Security as their sole source of income

The Economic Context of Elderly Housing


• Housing policy for the elderly in the United States has been profoundly affected by the traditionally high rates of home ownership among the older population.

• Approximately 75 percent of the population over sixty-five owned their own homes in 1983. And, among older homeowners, 83 percent had no mortgages

• Housing policy for the elderly in the United States has been profoundly affected by the traditionally high rates of home ownership among the older population.

• Approximately 75 percent of the population over sixty-five owned their own homes in 1983. And, among older homeowners, 83 percent had no mortgages



• Elderly homeowners face two problems.– Homes older in less desirable locations.– Housing equity is more difficult to convert to

liquid assets.

• Poor elderly renters face different problems.– Vulnerable to shifts in the housing market.– Gentrification.

• Elderly homeowners face two problems.– Homes older in less desirable locations.– Housing equity is more difficult to convert to

liquid assets.

• Poor elderly renters face different problems.– Vulnerable to shifts in the housing market.– Gentrification.

Political Context of Elderly HousingPolitical Context of Elderly Housing

• Changing demographics and economics will increase political demands for changes in elderly housing policy.

• The likelihood of change will be affected by free market and policy incoherence.

• Changing demographics and economics will increase political demands for changes in elderly housing policy.

• The likelihood of change will be affected by free market and policy incoherence.

Free Markets and Political ChoicesFree Markets and Political Choices

• Procedural democracy protects free market as most efficient allocation of housing resources.

• But, U.S. system does not have perfect information, most sectors do not have free entry, and most sectors restrict competition.

• Result: inefficient allocation of housing resources.

• Procedural democracy protects free market as most efficient allocation of housing resources.

• But, U.S. system does not have perfect information, most sectors do not have free entry, and most sectors restrict competition.

• Result: inefficient allocation of housing resources.

Policy Incapacity and Policy Incoherence


• Whereas the economic system is often too concentrated to meet the conditions of a free market, the political system is too decentralized and fragmented to compensate for the weaknesses of the market.

• Whereas the economic system is often too concentrated to meet the conditions of a free market, the political system is too decentralized and fragmented to compensate for the weaknesses of the market.



• The American political structure is characterized by fragmentation and decentralization.

• Consequences:– Fragmented political and economic demands.– Short-term ad-hoc decisions rather long-term.– Uncoordinated policy choices.

• The American political structure is characterized by fragmentation and decentralization.

• Consequences:– Fragmented political and economic demands.– Short-term ad-hoc decisions rather long-term.– Uncoordinated policy choices.

Policy Domain of Elderly HousingPolicy Domain of Elderly Housing

• Housing policy for the elderly and the non-elderly in the United States reflects both the weaknesses of the marketplace and the fragmentation of the American policy process.

• Housing policy for the elderly and the non-elderly in the United States reflects both the weaknesses of the marketplace and the fragmentation of the American policy process.


• Housing policy choices tend to be made at the national level with state and local governments generally responding to federal initiatives.

• Housing policy choices tend to be made at the national level with state and local governments generally responding to federal initiatives.


• Nevertheless, many of the most significant constraints on housing selection and location reflect state and local political decisions.

• Many of the policy choices are also heavily influenced by the housing industry, especially the materials producers, builders, and real estate developers.

• Nevertheless, many of the most significant constraints on housing selection and location reflect state and local political decisions.

• Many of the policy choices are also heavily influenced by the housing industry, especially the materials producers, builders, and real estate developers.


• Most housing policy driven by national groups, not housing consumers, especially the elderly.

• Housing policy in the United States clearly reflects the dominance of private incentives (mortgage interest deduction key policy).

• Single family dwelling focus.

• Most housing policy driven by national groups, not housing consumers, especially the elderly.

• Housing policy in the United States clearly reflects the dominance of private incentives (mortgage interest deduction key policy).

• Single family dwelling focus.

Elderly Housing Policy ConsequencesElderly Housing Policy Consequences

• The social, economic, and political context of elderly housing portends serious policy conflict in the future.

• The rapid aging of the American population suggests that the demand for housing of all kinds by the elderly will increase in the future.

• The social, economic, and political context of elderly housing portends serious policy conflict in the future.

• The rapid aging of the American population suggests that the demand for housing of all kinds by the elderly will increase in the future.


• Although much of this demand will be for single-family dwellings, major changes in the demographic composition of the elderly population itself will increase demand for more specialized housing.

• Although much of this demand will be for single-family dwellings, major changes in the demographic composition of the elderly population itself will increase demand for more specialized housing.


• Much of this demand will continue to be met with owner-occupied single-family housing.

• To date, despite extensive academic interest, the housing industry has paid little attention to issues of design and retrofitting for the elderly population.

• Much of this demand will continue to be met with owner-occupied single-family housing.

• To date, despite extensive academic interest, the housing industry has paid little attention to issues of design and retrofitting for the elderly population.


• HUD programs are too specialized and limited.

• They only aid 4 percent of elderly population.

• HUD programs are too specialized and limited.

• They only aid 4 percent of elderly population.


• State and local housing decisions face additional burdens.

– Federal limitations.– Balanced budget amendments.– Zoning ordinances.

• Policies for change under-funded and of limited scope.

• State and local housing decisions face additional burdens.

– Federal limitations.– Balanced budget amendments.– Zoning ordinances.

• Policies for change under-funded and of limited scope.

Housing Options: Possibilities for Change


• How, then, can the expected demand for elderly housing be met?

• How, then, can the expected demand for elderly housing be met?



• Possibilities:– Home-sharing programs.– Home equity conversions/ reverse mortgages.– Boarding homes.

• Policy options limited because of absence of continuum of care.

• Possibilities:– Home-sharing programs.– Home equity conversions/ reverse mortgages.– Boarding homes.

• Policy options limited because of absence of continuum of care.



• The primary obstacle to significant policy change is the inertia of the political process.

• The primary obstacle to significant policy change is the inertia of the political process.



• Despite the closed nature of the politics of the federal bureaucracy and the Congress, both arenas are permeable by outside forces.

• If significant policy direction can come from the other arenas of American politics, specifically the executive branch or public opinion, the scope of conflict can be expanded to include elderly housing policy.

• Despite the closed nature of the politics of the federal bureaucracy and the Congress, both arenas are permeable by outside forces.

• If significant policy direction can come from the other arenas of American politics, specifically the executive branch or public opinion, the scope of conflict can be expanded to include elderly housing policy.

PPA 419 – Aging Services Administration Lecture 7a – Demographic, Economic, and Political Factors Related to Housing for the Elderly.

Documents

elderly population

supportive housing

accessible housing

influence of housing

national housing policy

obvious importance of

statesthe housing agenda

older population