report, 2004 - Housing Assistance Council

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Housing Assistance Council & Rural Housing Issues Rural Seniors Their Homes

Transcript of report, 2004 - Housing Assistance Council

Housing Assistance Council

&

Rural Housing Issues

Rural Seniors Their Homes

This report was prepared by Lance George, Jennifer Pinder, and Amy L. Rose of the HousingAssistance Council (HAC). The work that provided the basis for this publication was supportedby funding under Cooperative Agreement H-21292 CA with the U.S. Department of Housingand Urban Development (HUD). Ndeye Jackson served as Government Technical Representa-tive. The substance and funding of that work are dedicated to the public. HAC is solely respon-sible for the accuracy of the statements and interpretations contained in this publication andsuch interpretations do not necessarily reflect the views of the United States Government.

HAC, founded in 1971, is a nonprofit corporation that supports the development of rural low-income housing nationwide. HAC provides technical housing services, loans from a revolvingfund, housing program and policy assistance, research and demonstration projects, and trainingand information services. HAC is an equal opportunity lender.

$x.xxSeptember 2003

Housing Assistance Council1025 Vermont Avenue, N.W.Suite 606Washington, DC 20005202-842-8600 (voice)202-347-3441 (fax)[email protected] (e-mail)http://www.ruralhome.org (world wide web)

ISBN 1-58064-128-8

Acknowledgements

The Housing Assistance Council (HAC) thanks Andy Kochera of AARP,Jim Mikesell of the U.S. Department of Agriculture’s Economic ResearchService, and Robert Gray and Ndeye Jackson of the U.S. Department ofHousing and Urban Development’s Office of Policy, Development andResearch for commenting on the first draft of this report. HAC also wishesto thank the following organizations for their assistance in preparing thereport’s vignettes.

Cooperative Development Foundation, Washington, D.C.Homestead Housing Center, St. Paul, MinnesotaNCB Development Corporation, Oakland, CaliforniaU.S. Department of Agriculture’s Rural Housing Service, Washington, D.C.

Executive Summary ........................................................................................................................................... 1Housing Conditions of Rural Seniors ......................................................................................................................... 1Elderly Housing Issues and Trends in Rural America ................................................................................................ 3

The State of Housing Among Rural Seniors ................................................................................................... 5General Population and Housing Characteristics ........................................................................................................ 5About the Data ............................................................................................................................................................ 5Distribution and Location of Rural Seniors ................................................................................................................ 6Tenure .......................................................................................................................................................................... 6Structure Type ............................................................................................................................................................. 7Household Characteristics ........................................................................................................................................... 8Income and Poverty ..................................................................................................................................................... 9Housing Costs ........................................................................................................................................................... 11Housing Quality ........................................................................................................................................................ 13

Elderly Housing Issues and Trends in Rural America ................................................................................. 15Housing Preferences, Choices, and Satisfaction Among Rural Seniors ................................................................... 15Housing Needs and Options for Rural Elders ........................................................................................................... 17Assisted Living Facilities .......................................................................................................................................... 18Reverse Mortgages .................................................................................................................................................... 19Elderly Migration in Rural America ......................................................................................................................... 22Government Housing Assistance for Rural Seniors .................................................................................................. 22

Summary and Discussion ................................................................................................................................ 27

Elderly Housing in Rural Areas Vignettes: Practical Applications ............................................................ 16A Model for Affordable Rural Senior Living: Homestead Senior Housing Cooperatives ....................................... 20Affordable Assisted Living: NCB Development Corporation’s Coming Home ProgramHelping Improve the Homes of the Lowest Income Rural Seniors: USDA’s Section 504 Rehabilitation Program ....25

FiguresFigure 1. Growth of U.S. Elderly Population ............................................................................................................. 6Figure 2. Elderly Households ..................................................................................................................................... 6Figure 3. Elderly Population by County, 2000 ........................................................................................................... 7Figure 4. Tenure ......................................................................................................................................................... 7Figure 5. Structure Type ............................................................................................................................................. 8Figure 6. Householders Who Live Alone ................................................................................................................... 8Figure 7. Elderly Nonmetro Housing Characteristics ................................................................................................ 9Figure 8. Race and Ethnicity ...................................................................................................................................... 9Figure 9. Income as a Percentage of the Area Median ............................................................................................. 10Figure 10. Poverty by Age and Residence ............................................................................................................... 10Figure 11. Homestead Exemptions by State ............................................................................................................ 12Figure 12. Cost Burdened Households ..................................................................................................................... 12Figure 13. Substandard Housing .............................................................................................................................. 13Figure 14. Housing Quality ...................................................................................................................................... 14Figure 15. Income Distribution of Surveyed Homestead Residents ........................................................................ 16Figure 16. Housing Modification Needs .................................................................................................................. 17Figure 17. Housing Options by Physical Dependency Level .................................................................................. 18Figure 18. Mortgage Debt by Age ............................................................................................................................ 21Figure 19. Elderly Population Change by County, 1990-2000 ................................................................................ 23Figure 20. Subsidized Housing ................................................................................................................................ 23Figure 21. Selected Federal Rental Housing Funding ............................................................................................. 24

Endnotes ........................................................................................................................................................... 29

AppendicesAppendix A. About the Data .................................................................................................................................... 33Appendix B. Data Tables ......................................................................................................................................... 39

Rural Seniors and Their HomesContents

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Today’s older Americans havewitnessed change and growth un-paralleled in our nation’s history.Many endured the economic dis-tress of the Great Depression andthen served their nation through thehardships of a world at war. Muchof the explosive post-war economicgrowth is directly attributable totoday’s seniors’ hard work, ingenu-ity, and perseverance. Now we livein a society with comforts and tech-nologies unimaginable at the timeof their births. Life expectancieshave increased dramatically fromthose in the early Twentieth Cen-tury, and older Americans are amuch more active and less isolatedsegment of our society than theywere just a few decades ago.

Housing Conditions of Rural Seniors

As the media have often noted, one of the most dra-matic demographic shifts in the history of our nation willoccur over the next three decades, as the elderly popula-tion is expected to more than double in size.

Of the approximately 102 million occupied housingunits in the United States, roughly 23 million, or 22 per-cent of all homes, are located in nonmetropolitan areas.Nationwide over 21 million households are headed by ahouseholder age 65 or older, and 5.8 million, or 27 per-cent, of them are in nonmetropolitan areas. Elderly house-holds are 26 percent of all nonmetro households, com-pared to just 20 percent in metropolitan areas.

An overwhelming majority of nonmetro senior house-holds (85 percent) own their homes, compared to thenationwide homeownership rate of 67 percent for house-holds of all ages. Whether seniors own or rent their homeis a significant factor affecting their housing and eco-nomic well being. Elderly rural renters generally facemore challenges and greater needs associated with theirhousing than elderly rural homeowners. Thirty-one per-cent of nonmetro renters age 65 and over have incomesbelow the poverty level, compared to 18 percent of theirowner counterparts.

Consistent with all households in the United States,most seniors (80 percent) live in single-family detachedhomes (not including mobile/manufactured homes). Atapproximately 10 percent, the mobile home occupancyrate among rural seniors is lower than that amongnonmetro households of all ages. Nonmetro seniors are

Executive Summary

One aspect of our culture that has not changed withthe beginning of a new century is the value of an afford-able and safe place to call home. Housing provides shel-ter and often economic security, but many seniors’ homeshave even greater value. They contain reminders of lifeexperiences, where they married, raised children, andnow play with grandchildren. Furthermore, for manyelderly Americans, home serves as a catalyst for an ac-tive and healthy lifestyle. This Rural Housing Issues re-port looks at the condition of rural seniors’ housing inthe United States, and investigates issues specificallyimpacting the provision of decent housing for older per-sons in rural areas.

i Rural Seniors and Their Homes

Although housing costs are lower in nonmetro areasthan in cities, many senior households, and in particularrenters, find it difficult to meet those costs. Among the5.8 million elderly nonmetro households, approximately1.4 million, or 25 percent, pay more than 30 percent oftheir monthly income for their housing and are thereforeconsidered cost-burdened. Affordability problems areworst for rural elderly renters, who are cost-burdenedmore than twice as often as their owner counterparts.

For the most part, nonmetro seniors live in good qual-ity housing as more than 9 out of 10 households experi-ence no moderate or severe physical inadequacies. How-ever, rural elders’ housing stock is much older than thatof the nation as a whole and, among all elderly house-holds, those in nonmetropolitan areas have the highesthousing deficiency rates. Approximately 426,000, or 8percent of nonmetro elderly households, have housingquality problems. Yet many seniors do not have the physi-cal or financial resources to improve their housing con-ditions.

twice as likely to reside in mobile homes as their metrocounterparts, however, and half of all rural seniors liv-ing in mobile homes are located in the South. The pro-portion of rural seniors living in mobile homes is likelyto increase in the coming decades, as householders age45 to 64 currently occupy nearly one-third of all ruralmobile homes.

Older households in rural areas tend to be smaller thanothers because they are often without children at thisstage of their lives, and they are also more likely to livealone. Overall, 77 percent of elderly householders wholive alone are women. They are much more likely to livein poverty and experience housing cost burdens than theirmarried or single male counterparts.

Elderly households in nonmetro areas tend to be lessracially diverse than is the population of United Statesas a whole. Nine out of ten rural elderly households arewhite and not of Hispanic origin. However, minoritiesin rural areas are among the poorest and worst housedgroups in the entire nation and these problems are evenmore profound among older minorities in rural areas.While just 9 percent of all elderly households in nonmetroareas are headed by minorities, they account for 18 per-cent of all rural elderly households in poverty. Further-more, nonwhite rural elderly households are four timesmore likely than whites to experience either moderatelyor severely inadequate housing conditions.

In recent years significant gains have been made inreducing poverty among older Americans, but economichardships are still shockingly persistent among certainsubsections of the elderly population: women, minori-ties, and those living in rural areas. Approximately 2.5million households, or 42 percent of nonmetro seniorhouseholds, have very low incomes (at or below 50 per-cent of their area median incomes). About 22 percent ofnonmetro elderly households have incomes below thepoverty level. Poverty rates among minority seniors inrural areas are even greater with 33 percent of African-American households, 28 percent of Native Americanhouseholds, and 27 percent of Hispanic households liv-ing in poverty.

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Rural Housing Issues

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Elderly Housing Issues and Trendsin Rural America

In general, rural seniors are very satisfied with theirhousing. Over 80 percent of them, more than any otherage group, express high housing satisfaction. Neverthe-less, as people grow older their housing needs change.

Contrary to the stereotype of the frail elderly person,most older people are healthy and active, or do not needassistance in regard to the activities of daily living. How-ever, 1.4 million, or 24 percent, of rural elderly house-holds report having one or more physical limitations. Ap-proximately 583,000 of these rural elderly householdsare in need of housing modifications to accommodatetheir physical limitations.

While most seniors wish to remain in their homes foras long as possible and want services in their communi-ties rather than in group settings such as nursing homes,unique challenges often complicate the provision of ad-equate and affordable housing for older persons in ruralAmerica. Sparsely settled rural areas often suffer fromlittle or nonexistent public transportation and limited so-cial service infrastructure. Thus a housing gap has beenleft unfilled in many rural communities where rural el-ders all too often must choose between living in a dete-riorating and substandard home or moving to a nursinghome.

Among the more recent developments in housing forseniors is the increase in the number of assisted livingunits that offer varying degrees of care in a living set-ting. While assisted living is one of the fastest growingtypes of senior housing in the United States, the coststend to be considerable, making this housing option pro-hibitive for many low-income seniors.

Reverse mortgages are another housing option for se-niors. Although it is still extremely difficult to measurethe reverse mortgage market, it is estimated that this loanproduct is currently underutilized. Many seniors, par-ticularly those with low incomes, do not want to borrowagainst their homes because these are the only assets theycan pass on to their children.

Typically, seniors are a very stable group and do notfrequently move; however, certain identifiable migrationtrends among older persons have significant impacts onrural areas. Migration of seniors into rural areas seemsto be more prevalent in the West and particularly in highamenity areas like the western slope of the Rocky Moun-tains in Colorado and Utah. More commonly, however,rural seniors are likely to live in areas that have experi-enced an outmigration of young adults seeking employ-ment. Often this type of migration reduces the level ofsupport networks — both formal and informal — forrural seniors.

A number of federal programs address the housingneeds of low-income elderly persons. These programsare primarily administered by the U.S. Department ofHousing and Urban Development (HUD) and the RuralHousing Service (RHS) of the U.S. Department of Agri-culture (USDA). Approximately 393,000, or 6 percent,of nonmetro households age 62 and over receive sometype of government housing assistance. HUD’s Section202 program and several RHS programs have seen steepbudget cuts, which have drastically reduced their effec-tiveness in serving the much needed affordable rentalhousing market for rural seniors in recent years.

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FIGURE 5Structure TypeNonmetro Elderly-Occupied Units

Source: HAC Tabulations of the 1999 American Housing Survey.

lation as a whole. This may be largely attributable to thefact that mobile homes are a relatively recent housingoption that arose after many current seniors were in thepurchasing stage of their housing life cycle. Neverthe-less, the proportion of nonmetro senior households re-siding in mobile homes is double that of their metro coun-terparts, and over half of all rural seniors in mobile homeslive in the South. Like elders who live in conventionallyconstructed single-family units, most rural seniors owntheir mobile homes and are highly satisfied with them.Cost is probably the most import factor for choosing amobile home, as a majority of elderly mobile home resi-dents have low incomes. However, other factors particu-lar to mobile homes may also precipitate their use byolder rural residents. Many rural areas lack zoning regu-lations, and mobile homes are relatively easy to moveand locate. For seniors, these factors may facilitate thelocation of mobile homes near relatives who provide sup-port and services.6

Rural senior households are more likely than youngerrural households to live in mobile homes that were builtbefore the implementation of the 1976 ManufacturedHousing Construction and Safety Standards, often calledthe HUD Code. Some evidence suggests that these oldermobile homes are at greater risk for health, safety, andhousing quality problems than units built under the re-quirements of the HUD Code.7

The proportion of rural seniors living in mobile homesis likely to increase in the coming decades, as house-holds age 45 to 64 currently occupy nearly one-third ofall mobile homes in rural areas.

Household Characteristics

Older households in rural areas tend to be smaller thanothers, as they are often without children, and they arealso more likely to consist of one person living alonethan are middle-aged households. Rural elderly house-holds are also more likely to be headed by a woman thanare nonmetro households in general. This can be ex-plained by the simple fact that women live longer thanmen. Only one in ten elder female-headed households isa married couple, while over 78 percent are widows.Overall 44 percent of rural elderly households consist ofa person living alone and over three-quarters of themare women (Figure 6). Single female-headed householdsage 65 and over are much more likely to live in povertyand to experience housing cost burdens than their mar-ried or single male counterparts. Because of advances inmedical technologies, however, it is projected that thegender gap among rural seniors will decrease in the com-ing decades.8

Many rural elders are living longer; on average seniorscan expect to live 17 years after they turn 65.9 Today’sseniors do not comprise one uniform segment of oursociety. They are a growing and diverse population withvarying interests, abilities, and needs (Figure 7). The“young elderly,” those age 65 to 74, tend to be moreactive and mobile, have higher incomes, be homeowners,and live in better quality housing than rural householdsage 75 and older.

Single Unit, Detached 79%

One Unit, Attached 2%

Mobile Home 10%

MultifamilyStructure 9%

Female 77%

Male 23%

FIGURE 6Householders Who Live AloneNonmetro Elderly Householders by Sex

Source: HAC Tabulations of the 1999 American Housing Survey.

Rural Seniors and Their Homes 9

FIGURE 8Race and Ethnicity

Nonmetro Elderly Householders

Source: HAC Tabulations of the 1999 American Housing Survey.

FIGURE 7Elderly Nonmetro Housing Characteristics

Source: HAC Tabulations of the 1999 American Housing Survey.

In contrast, the “oldest old,” those age 85 and older,have much different housing and service needs. Ofnonmetro householders age 85 or older, 73 percent livealone, over one-quarter have below poverty level in-comes, and 11 percent live in inadequate housing. Fur-thermore, the “oldest old” age category is one of the fast-est growing age segments in society. Today persons age85 and over make up approximately 11 percent of theelderly population. It is projected that by 2050 they willcomprise 23 percent of those over the age of 65.10

Elderly households in nonmetro areas tend to be lessracially diverse than the population of the United Statesas a whole;* more than nine out of ten are white and notof Hispanic origin (Figure 8). African Americans are thelargest minority group among the rural elderly at 6 per-cent. Most nonmetro African Americans over the age of65 live in the South. Less than 2 percent of rural seniorsare Hispanic,** and Asians and Native Americans makeup less than 1 percent of nonmetro elderly households.

Minorities in rural areas are among the poorest andworst housed groups in the entire nation and these prob-lems are even more profound among older minorities inrural areas. While minorities comprise just 9 percent of

all senior households in nonmetroareas, they account for 18 percentof those in poverty. Furthermore,rural minorities experience inad-equate housing conditions at fourtimes the rate of their white coun-terparts.

Income and Poverty

Adequate income is crucial forseniors to acquire and maintain ap-propriate housing. Incomes for olderhouseholds in nonmetro areas havehistorically been lower than thosefor the rest of the country. The me-dian income among elderly non-metro households is $16,800, 44percent less than the median incomeof $30,000 for all nonmetro house-

holds.* Approximately 3.6 million (62 percent) nonmetroelderly households have incomes at or below 80 percentof their area median income and are therefore consid-

Live Alone

In SubstandardHousing

In Poverty

Renters

Total Households

Age of Householder

65 to 74 75 to 84 85 +

0 20 40 60 80 100Percent

By Age Level

* Race and ethnicity of households reflect the race and ethnicity of thehouseholder. The householder is the first household member listed onthe AHS questionnaire who is an owner or renter of the sample unitand is age 18 years or older.

**Hispanic is an ethnic origin, not a race. Most Hispanics reportthemselves as white, but Hispanics may be of any race.

White 91%

Asian 0.1% Native American 0.7% Hispanic 2%

African-American 6%

*Caution should be exercised when referring to income and poverty datain this report. Poverty data in the AHS are not an official count ofhouseholds in poverty; rather, they are intended to show housingcharacteristics of low-income households. The Census Bureau notesthat, historically, the AHS underreports income and overreports povertywhen compared to the Current Population Survey. For additionalinformation on area median income (AMI) calculations please consultAppendix A.