Which of the recommendations in the BPC Housing Commission’s report should receive highest priority?
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The Bipartisan Policy Center’s recent white paper, Housing America’s Future, raised some familiar discussion topics in the housing debate such as how to reform our current government-dependent housing finance system into one that moves us more toward private capital. The study also rightfully highlighted the challenges of meeting our growing affordable rental housing needs. But the study’s highlight of the situation of the Echo Boom generation (our senior citizen population) provided a fresh and unique insight into the housing needs and desires of this growing demographic.
Foremost, the study recognized the common desire among seniors to “age in place.” In meeting this goal and additional needs while maintaining affordability, senior homeowners face the challenges of fixed incomes, rising property taxes and unexpected housing-related costs. The study cited that over five million seniors spend half of their income on housing.
Notably, the study found that one-third of the Department of Housing and Urban Development’s (HUD) subsidized housing supports households led by individuals 62 or older. I would suspect the average taxpayer would be surprised by this statistic. Moreover, this housing stock, in many cases, is not designed to meet the structural needs of seniors.
The concerns posed by the Bipartisan Policy Center will only increase in upcoming years as the senior population continues to grow. The population of individuals 65 and over is expected to double between 2010 and 2040, and the population of individuals 85 and older is expected to double by 2030.
The study offered some thoughtful recommendations to address the needs of seniors including federal agency coordination, coordination between housing and healthcare policy, energy efficient retrofitting, integration of senior needs into policy priorities and access to reverse mortgages and other finance products.
The Federal Housing Administration’s (FHA) Home Equity Conversion Mortgage (HECM) Program was only mentioned briefly in the study, yet this program is one of the key public policy vehicles where the government can influence the availability of finance products designed to serve seniors wishing to “age in place.” While the HCM program is not for every senior and has experienced financial losses due to the downturn in housing values, it clearly deserves another look.
Moreover, while the study did an excellent job looking forward, a degree of looking back is also required. Seniors were severely impacted by the recent financial crisis experiencing high percentages of foreclosures and serious delinquencies. In addition to ensuring access to housing for seniors, protecting senior housing and financial assets must be a priority.
Meeting and maintaining the housing needs of seniors provides valuable emotional, financial, and physical benefits and therefore must be added to the national policy agenda as the study rightly points out.
Brian Montgomery is the chairman of The Collingwood Group LLC.
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