Housing for Elderly Seen as Complex

Housing for the nation’s elderly persons, the fastest growing segment of the U.S. population, can’t be simply described and put into a convenient little cubbyhole.

“Older adults cannot easily be categorized. They differ greatly in terms of health, activity limitations, economic resources, whether they are homeowners or renters, and the availability of family or community supports,” said Rep. Edward R. Roybal, the Democrat who has represented California’s 25th Congressional district in Los Angeles County since 1963. “The challenge we face is to design a cost-effective housing strategy which can match the diverse needs of elderly Americans.”

In keynoting a seminar on elderly housing, sponsored here by the Mortgage Bankers Assn. of America, the chairman of the House Select Committee on Aging commented that the rapid increase in elderly persons has “far-reaching implications for public policy because of their potential need for supportive services.”

However, Roybal admitted that he sees little likelihood of “any substantial expansion or reshaping of elderly housing policy this year.”

Rather, he expects Congress to pass a bill that will provide stability to existing housing programs. He added: “There has not been a regular housing bill since 1980, largely due to the opposition from the Reagan Administration over funding for the programs.”

However, he said that he sees some hope for less affluent older adults in congregate housing, which “combines shelter with income supports and allowances for supportive services as a bridge between independent living and 24-hour nursing-home care.”

Both Roybal and Rep. George Wortley (R-N.Y.) a member of the House Select Committee on Aging, agreed that there is a strong likelihood this Congress will act favorably on legislation that would authorize a demonstration program for insuring home-equity conversion mortgages for about 2,000 older homeowners.

It has been estimated that older Americans have $800 billion of equity in mortgage-free homes, but that many of them need “reverse annuity mortgages” (called RAMs) to maintain their homes and pay for living and health-care expenses in their upper-age years.

Equity conversion, although sanctioned by Congress several years ago, to date, has failed to be promoted by lenders or to be widely accepted by older homeowners.

Wortley, an advocate of private enterprise, said he favors a demonstration program for home-equity mortgages because elderly persons often need new sources of income and because 70% of their total assets are in home equity. “Home equity is really social capital,” he added. The legislation already has been approved in the Senate and is expected to gain House approval this summer.

Whether the program for home-equity mortgages gets the required White House approval will depend on how much the total housing bill speding can be trimmed before being passed and sent to President Reagan for signature, Wortley summarized.

Meanwhile, Mortgage Bankers Assn. executive vice president Warren Lasko expressed pessimism that reverse annuity mortgages would gain acceptance because a secondary market for those mortgages is highly unlikely, and also because of coolness to such reverse mortgage finance by both prospective lenders and borrowers.

Lasko suggested that the federal government consider legislation that would provide modest voucher payments to elderly homeowners who need dollar assistance to remain in homes they own.

Another view on RAM financing came from James Burke, president of American Homestead Corp., a New Jersey firm that has been making home-equity mortgages. He contended that all other lenders have dragged their feet in promoting such mortgages to the elderly, and that it may take a plan of “shared appreciation” between lender and homeowner to make the RAM program more acceptable. Burke said his firm already has made $100 million worth of reverse home equity mortgages.

As a representative of the American Assn. of Retired Persons, Eugene L. Lehrmann said that the organization, representing many millions of over-50 Americans, is pushing for the enactment of a RAM demonstration project.

“We already have established a home-equity information center and stand ready to help older persons wanting to get regular cash payments out of their houses,” he added.

Another insight for housing older Americans came from Carl W. Riedy Jr., who stressed that any consideration of housing for older Americans must be delineated in terms of income groups and age groups. The former Housing and Urban Development official who now is an executive with the Council of State Housing Agencies commented that the market will respond to housing-related needs of persons who have annual incomes of $24,000 a year and can pay $1,200 a month for a place to live. He also reminded the 50 persons attending the MBA conference in the nation’s capital that the level of required care increases considerably as seniors grow older.

As the only speaker representing builders and developers of housing for adults and older persons, Alan F. Scott insisted that building for older persons has convinced him that those graying Americans really “want to be with people their own age” and also that they “want to see the recreation facilities (pool, golf courses and such) in place and be able to feel and touch them. They’re all from Missouri and believe in what they see,” he said.

As head of a firm (Zeremba Development) that has built thousands of multifamily dwellings, Scott also stressed that retirement housing must be marketed, if it is to be successful, as a “life style” for older persons.

He cited the success of large, posh projects such as Sun City in Arizona (with 48,000 residents) as an example of the market for housing that caters to the tastes of affluent older Americans. He added that a feeling of personal security is highly important to retired persons who want to take walks without being afraid and who want to take trips without worrying that their homes will be violated by intruders or robbers.

Older Americans also have a reputation as regular voters, according to Roybal. He said that persons over 55 vote more regularly than do other age groups, and that their votes have been largely responsible for his own political longevity.