Housing costs determine whether individuals and families can live in a neighborhood without sacrificing other basic necessities, such as food and health care. Yet Approximately 9.8 million households headed by someone age 50 or older are considered severely cost-burdened. They spend more than 50 percent of their income on housing. Housing-cost burden affects both homeowners and renters, but renters are more likely to experience it.
Renters typically have lower incomes than homeowners. They also usually face rising rents each year. Homeowners with fixed-rate mortgages have more predictable housing costs (see also Home Mortgage Lending). Homeowners typically are less housing cost-burdened than renters across age groups. However, the difference is greatest for families with adults age 80 and older, in which renters are twice as likely to be housing cost-burdened. Nearly 60 percent of these renter households are cost-burdened, compared with 29 percent of homeowners in the same age group.
Older renters tend to be more rent-burdened than younger renters. The Pew Research Center found that in 2015, over half of renters headed by someone age 65 or older spend at least 30 percent of their income on rent. And 23 percent of renters in this age group spent at least half their income on rent. This leaves very little money for other necessities, such as food and health care. People with high housing-cost burdens may be at risk of eviction and displacement if appropriate tenant protection laws are not in place. The severe shortage of affordable housing can put families and individuals at risk for homelessness.
Policymakers can address affordability by increasing subsidies for housing. They can also create more housing and expand the variety of housing options to promote affordability. This can be achieved through the new construction of missing middle housing. Missing middle housing refers to attached housing, duplexes, tiny homes, and accessory dwelling units that are on the same lot as an existing home (see also Land Use and Zoning policy).