Amid high unemployment and foreclosure rates, an increasing number of older Americans are choosing to rent, adding to competition for an already strained supply of affordable rental housing.
A just-released study found that despite the belief that renters are usually younger adults, some 13 percent are 65 and older, reaching 4.9 million in 2010.
"The sheer size of the baby boom generation relative to its predecessor will push up the number of renters over age 65 by nearly 2 million" in the next 10 years, predicts the study, "America's Rental Housing — Meeting Challenges, Building on Opportunities."
In the wake of federal budget cuts, policymakers have their work cut out for them, the report says, as all levels of government will face challenges to help expand the supply of affordable rental housing. In addition, the report says, there will be increasing competition for assisted living homes.
"We need to find a way to support investments in existing affordable housing to to preserve this valuable resource," says Chris Herbert, director of research for the Joint Center for Housing Studies at Harvard University, which produced the report.
In 1980, the United States had about 4,185,000 renter households with people over age 65; the researchers expect that the figure could grow to just over 6.8 million by 2020 — a 62 percent increase.
With insufficient new construction of rental housing, affordability is likely to remain an issue as high unemployment rates limit tenants' ability to pay. The report predicts that, with supply remaining low, rents will only continue to rise as the economy recovers.
Rent and utility costs that consume less than 30 percent of a household's income are commonly considered to be affordable. Moderately burdened renters pay between 30 and 50 percent, and the severely burdened pay more than 50 percent.
In 2009, the share of those paying between 30 and more than 50 percent jumped to 49 percent, compared with 38 percent in 2000 and 24 percent in 1960.
"Renters are facing high cost burdens," says Herbert. And it isn't just the low-income renters suffering this way, as was the case traditionally.
Herbert presented the study April 26 at the Newseum, the Washington, D.C., museum about the news media.
Among other findings:
- About a fifth of households over age 55 are renters, often because of the appeal of less responsibility for home maintenance and potential declines in house values.
- Along with singles, householders over age 65 are most likely to rent in larger multi-unit buildings in cities or suburbs, while renters who are married with children tend to opt for single-family detached homes.
Talia Schmidt is an intern at the AARP Bulletin.
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