Seeking Solutions to the Senior Affordability Squeeze

An aging population is getting priced out the housing market, and the clock is ticking.

Executive Editor Paul Rosta

Executive Editor Paul Rosta

As 2020 approaches, rest assured that MHN will devote plenty of column space to affordable housing. That sector rightly demands plenty of attention from developers, policymakers, non-profits and other stakeholders. Still, I have a hunch that at least one major constituency has yet to receive its share of the spotlight: the nation’s vast and growing cohort of seniors.


In MHN December’s cover story, the veteran journalist Sibley Fleming explores the challenges of providing affordable housing for America’s seniors. Though new product is plentiful, the volume of senior housing targeting lower- and middle-income residents is falling far short of the need.

Much of the new inventory these days caters to the high and low ends of the market, passing over the needs of the middle-income residents that make up the majority. A handy way to think of the niche is as workforce housing for seniors, says Beth Burnham Mace, chief economist at the National Investment Center for Seniors Housing & Care. She warns that unless solutions can be found, the burden will fall on Medicare, which doesn’t have enough resources to meet demand.

Source: JCHS tabulations of HUD, Worst Case Housing Needs 2007–2017 Reports to Congress; US Census Bureau, Current Population Surveys, and 2018 JCHS Household Projections.

Demographic and economic trends are at the root of the daunting challenges. By 2030, 18 million people will reach their eighties, and for many of them, income inequality will makes finding affordable housing problematical, contends a study published in October by the Harvard Joint Center for Housing Studies. Also of note, 10 million households in the 65-and-older category could be classified as cost-burdened because they dedicate more than one-third of their incomes to housing. Half of those 10 million households fall under the severely burdened threshold because housing costs take up at least half of their incomes. The Harvard study attributes this trend partly to fallout from the Great Recession. At any rate, only limited options will be available to these seniors as they age.

As as Fleming notes, the key is structuring a package that attracts partners able to develop the project, operate it efficiently and generate risk-adjusted returns while still remaining solidly in the market middle ground. Other potential solutions are in the air these days, such as public-private partnerships, tax credits and zoning flexibility (for instance, adjusting floor area ratio requirements).

Photo by Micheile Henderson on Unsplash

As Fleming reports, multifamily stakeholders are demonstrating ingenuity to reach the goal of providing affordable product for senior residents. Consider  American House Senior Living. Dale Watchowski, the firm’s president & CEO, cites lower construction and development costs. The firm can secure debt at a favorable rate because its equity contribution is typically 35 to 40 percent, considerably more than 20 to 25 percent in the equity market. Occupancy at its 70 properties, most of them affordable, is close to 90 percent.

Creating an adequate inventory of affordable housing for seniors will require all hands on deck from its stakeholders: private developers, lenders, nonprofits and government agencies chief among them. As the Harvard study makes clear, now is the time for comprehensive, innovative approaches. The window of opportunity to head off a national crisis won’t stay open for long.

Read the December 2019 issue of MHN.

You May Also Like