Many U.S. senior citizens will face various problems for their housing needs, while those in rural areas will have a more difficult time due to their proximity to neighbors, basic services and amenities, according to the Department of Housing and Urban Development (HUD).
The HUD released a publication that highlighted the different challenges and solutions for senior housing concerns. Affordable housing will be a major problem for both homeowners and renters.
While most senior citizens have their own houses, the percentage of those who rent is expected to rise to 23% in 2035 from 21% in 2015, according to the report. Property developers should view this forecast as a way to drum up business. For cash-strapped developers, many HUD multifamily financing solutions provided by financial firms like Bonneville Multifamily Capital can help with your next apartment project.
The need for more multifamily properties will be necessary, as the Harvard Joint Center for Housing Studies estimated that the population of Americans aged 65 years old and above increase to 79 million from 48 million over the next 20 years.
Some existing programs that aim to solve affordable senior housing issues include the HUD’s Section 202 Supportive Housing for the Elderly initiative. This provides non-profit groups with interest-free capital advances to construct residential properties for extremely poor seniors, whose average annual income only amounted to $13,238 in 2015.
For homeowners, applying for a reverse mortgage could be another solution. This allows them to unlock the equity value of their house “without having to leave it,” according to the HUD. The federal government insures most types of reverse mortgages through the Home Equity Conversion Mortgage program.
The need for more affordable housing simultaneously presents a challenge and a business opportunity for real estate developers. Companies should find ways to provide more low-cost housing solutions to meet an expected increase in the elderly population.