Expert: Housing Affordability Impacting Retiring Baby Boomers
The need for affordable housing could take on a whole other dimension with 10,000 baby boomers retiring every day in the U.S.
“If even 3% of the population hasn't prepared well … that means we're going to have 1.5 million [baby boomers] in the next 10 years … who will require affordable housing,” Hunt Mortgage Vice President Gabe Seghi said.
Affordable housing is a growing issue in the U.S. The average wage needed for a two-bedroom apartment is nearly $14/hour, which surpasses the federal minimum wage of $7.25, according to the National Low Income Housing Coalition.
Retiring seniors make up a segment of the population that can have strong impact on local government budgets. Seghi said when seniors cannot afford private skilled nursing facilities, they end up going to publicly paid facilities that cost much more.
“What we're going to have to start looking at going forward is how to develop building these facilities with tax credits,” he said. “Ultimately, it's going to fall on the states.”
Seghi was part of a panel at last week's Bisnow Atlanta Affordable Housing event that focused on the growing affordability crisis for housing. Panelists highlighted a variety of reasons for the problem: escalating land and construction costs, local populations that block apartment projects in their communities and sheer demand.
Of the 40 million apartment renters in the U.S., 11 million live at or below the national poverty line, TI Asset Management President Margaret Stagmeier said. Of that group, less than 1% currently live in affordable apartment units built after 2010.
“We just can't keep up,” Stagmeier said.
According to Enterprise Community Partners Director Sara Haas, more than 70% of Atlanta residents are considered severely cost burdened, spending more than half their income on rent.
But while the need for affordable housing is growing, the city is seeing units once designated for lower-income families become market-rate rentals. Between 2010 and 2014, more than 30% of units renting for up to $800/month disappeared, Haas said. Haas said one way to help boost the city's stock of affordable units would be to ensure that those units currently affordable stay that way.
“Preservation does need to be a significant focus,” she said.