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Federal Programs and Local Organizations:
Meeting the Housing Needs of Rural Seniors

© Housing Assistance Council, 2001

Permission is granted ONLY to nonprofit community-based organizations to reproduce and/or adapt this document, and only for their own use.

INTRODUCTION

Background

Elderly persons often have special housing needs. The Housing Assistance Council (HAC) conducted case study research that profiles how federal and other funds have been used in rural areas to help meet the housing needs of low-income elderly homeowners and renters in selected counties. The case studies focus on rural counties with high elderly populations or elderly in-migration rates. Each county examined exhibits substantial use of federal programs to assist elderly homeowners and renters. In many of the counties, these efforts to serve elderly clients have been innovative and involved collaboration among local housing and service providers.

Housing for elderly persons has become a pressing issue in America, and has recently received increased attention in both the academic and popular press. About 21 percent of U.S. householders in 1995 were over the age of 65. The percentage in rural areas was slightly higher, with about one quarter of rural householders over age 65.¹ More than half of elderly householders in rural areas were poor or near-poor, with 21 percent below the poverty line and 31 percent between 100 and 200 percent of poverty. The U.S. population over the age of 65 will likely double from 31 million in 1990 to 62 million by 2025, furthermore, the future elderly population will live longer, as average life expectancy is anticipated to increase to 81.2 years in this same time period.² These population trends suggest that the housing needs of older Americans will grow in significance.

In rural America, additional challenges arise when attempting to house elderly persons adequately and affordably. Sparsely settled rural areas often suffer from limited or nonexistent public transportation and limited social service infrastructure. In this environment, providing affordable housing accessible to the variety of services that improve the quality of life for elderly households can be a complicated task.

Characteristics of Rural Elders and Their Housing

Of the 31 million persons age 65 and over, approximately 8 million, or 26 percent,³ live in nonmetropolitan⁴ areas. Nationwide, 12 percent of the population is over the age of 65, but that number rises to around 15 percent in nonmetro places.⁵ Areas with sparse populations tend to have larger proportions of elderly persons than more metro areas. The percentage of elderly persons is highest in towns and villages with less than 2,500 persons and lowest in large towns and larger population centers.⁶ This significant age discrepancy between metro and nonmetro areas can be largely attributed to the exodus of younger persons for employment in more urbanized areas.

Women generally tend to live longer than men and subsequently comprise a larger percentage of the elderly population. In 1990, women made up 6 out of every 10 persons over the age of 65, and outnumbered elderly men by 6 million.⁷ The percentage of elderly men in nonmetro areas is slightly higher than the U.S. average. Furthermore, most elderly men are married, whereas most elderly women tend to be widowed and live alone.⁸

Nonmetro elders are predominately white. Approximately 92 percent of those over the age of 65 are white. Only 6 percent of nonmetro elders are African American, and the remaining 2 percent are either Native American, Hispanic or another race.⁹ Furthermore, most nonmetro African American seniors live in the South with very few residing outside of this region.

Housing characteristics of rural seniors have some distinct differences from those in city and suburban areas. Elderly households in nonmetro areas are more likely to be homeowners, live in mobile homes,¹⁰ and have physical problems with their units, than those living outside nonmetro areas.¹¹ Over 88 percent of elderly nonmetro householders own their homes, which is substantially higher than the national average of 78 percent among elderly persons. Nonmetro seniors also typically own their homes outright, as only one in eight had a mortgage.¹² Most nonmetro seniors live in single-family homes; however, a sizable number,13.6 percent, live in mobile homes.¹³

Substandard housing continues to be a persistent problem among nonmetropolitan seniors. Among elderly households, those in nonmetropolitan areas have the highest housing deficiency rates. In 1995, close to 500,000 nonmetro elders had moderate or severe physical problems with plumbing, heating, electrical systems, upkeep, hallways and or kitchens.¹⁴ These high deficiency rates are prevalent among both senior homeowners and renters. However, elderly non-metro renters consistently live in the poorest quality housing.¹⁵ Regionally, housing deficiencies among nonmetro seniors are particularly high in the South.¹⁶

The Elderly Housing Continuum: Rural Housing Options

Housing for elderly persons usually conjures up images of retirement villages, nursing homes, and federally funded housing complexes. While these housing types are all prevalent among elders, they do not accurately represent the breadth or nature of housing options for seniors, particularly in rural areas. Older persons need a continuum of housing options that correspond to the normal progression of the process of aging.¹⁷ The elderly housing continuum broadly consist of four major categories:

Homeownership: This housing option consists of elderly individuals or couples who own their homes. Most seniors own either single-family homes or mobile homes. Condominiums and cooperatives are also prevalent homeownership options for seniors. In most cases, seniors live independently in their home, receiving only small amounts of assistance from family or volunteer care givers. In addition, a growing number of seniors are now receiving in home support services such as meal programs, transportation services, and companionship.

Homeownership is by far the most popular and preferred housing option among seniors for a wide array of reasons. However, larger homes are often difficult and expensive to maintain, especially for older persons with limited physical ability and fixed incomes.

Rental Housing: Rental housing is the second category or phase in the elderly housing continuum. Rental housing is available in all housing types, including single-family homes, single rooms in houses or hotels, apartments, retirement villages and complexes designed specifically for older persons.¹⁸ Similar to homeowners, many elder renters live independently or receive only limited assistance from family members or service organizations. In addition, some rental complexes exclusively designed for seniors offer or coordinate varying degrees of service for elderly tenants. Some rental complexes are sponsored by federal programs and often help subsidize rents, making them affordable for many elders. Rental housing is much less burdensome than homeownership for seniors. It absolves them from the many physical and financial responsibilities of owning a home. Furthermore, many rented houses or units are smaller and structurally conducive to older persons' lifestyles. A lack of autonomy for tenants is probably the largest drawback for many seniors. While renting is not the most preferred housing option among seniors, it is generally viewed as an acceptable alternative to a nursing home.

Assisted Living: Assisted living is a relatively new housing option for elderly households. It combines the advantages of independent housing with support services and social activity.¹⁹ These facilities usually offer individual apartments or rooms and a full range of services such as meals, house cleaning, laundry services, transportation, and assistance with basic activities. Smaller board and care homes may also fall under the genre of assisted living. Assisted living units provide a mix of independent living and more intensive services which allows many seniors a higher quality of life than would be experienced in conventional nursing homes. However, this housing option tends to be very expensive, with average monthly costs ranging from $1,500 to $3,000.²⁰ These affordability barriers often preclude many low- and moderate-income seniors from utilizing the assisted living option.

Long-Term Care Facility: Long-term care facilities, also known as nursing or convalescent homes, are often utilized by elders who are entirely dependent on medical and nursing care. Long-term care is typically the final stage or option in the elderly housing continuum. In 1995, 1.5 million seniors resided in nursing homes nationally.²¹ These institutions often provide "hospital like" living arrangements where residents share space and are often limited to the amount of personal possessions. Long-term care facilities are generally viewed as the least desirable housing options among many seniors.

Housing Preferences of Rural Elderly Persons

Most persons over the age of 65 live in single-family homes which they own. Typically elderly persons also prefer this housing arrangement. ²² Bolstered by an attachment to home, and community, these housing preferences are strongest in rural areas. ²³ However, enduring social, economic, and psychological attachments seniors have with their homes are often jeopardized by the aging process. Many older adults remain in their homes, or "age in place," long after they can physically, mentally, or financially manage a home. This situation is worsened in rural areas by the fact that many elders live in older homes which are more likely to have structural and physical inadequacies. Yet, even seniors living in physically substandard housing tend to express satisfaction and a desire to remain.²⁴ This strong attachment, even in the face of inadequate housing, is often a factor of income, differing personal definitions of quality, and a fear losing one's independence.²⁵ In fact, the resistance to move is so strong that it often takes a major life disruption, such as serious illness, accident, or loss of a spouse, to provoke a housing move.

While there exists an overwhelming preference for ownership among the rural elderly persons, this may be due in part to a lack of housing options. A housing gap has been left unfilled in most rural communities between single independent dwellings and institutional care facilities such as nursing homes. ²⁶ Rural elders have less access to rental housing than do city or suburban residents. To some extent this is a matter of preference, but as people age, many want and need apartment living.²⁷ Although rental housing is an important component of the elderly housing continuum, however, its scarcity in rural areas greatly inhibits housing choices for rural seniors. Consequently, housing variety is severely constrained for many rural elders, who are all too often caught between the choice of living in a deteriorating and substandard home, or moving to a nursing home.

Poverty and the Propensity to Become Poor With Age

The importance of income as a factor in acquiring needed services and appropriate housing for the elderly cannot be overstated.²⁸ In recent years significant gains have been made in reducing poverty levels of older Americans. However, economic hardships are still shockingly persistent among certain subsections of the elderly population: namely women, minorities, and those living in rural areas. In 1990, the overall poverty rate for elderly persons in the U.S. was 12.9 percent. In nonmetro areas their poverty level was 15.4 percent.²⁹ The poverty rate for nonmetro elderly women was even higher at 31.6 percent. Elderly African-American women in nonmetro areas experienced the greatest poverty, with over 50 percent below the poverty threshold.³⁰ Poverty rates among elderly persons also increase with age. In 1992, the poverty rate of persons 65 to 74 was 10.7 percent, 15.3 percent for persons 75 to 84, and for persons 85 and over the rate was 19.8 percent.³¹

Education is considered one of the most significant factors impacting poverty rates among seniors. When education levels among elders decrease, poverty rises. Those with four or more years of college had an average monthly income of $1,173, as opposed to $661 for elderly persons with a high school education, and just $472 for seniors with less than a high school education.³² Nonmetro elders are less likely to have higher educations, and subsequently more likely to have experienced more marginal employment than their metro counterparts.³³

Recent studies indicate that elderly persons in rural areas spend more years in poverty and have a significantly higher likelihood of slipping into poverty as they age. The propensity to become poor after the age of 65 is greatly enhanced by the transition out of the labor force, as well as by a major life disruption, such as serious illness or becoming widowed, especially for rural women. This enhanced vulnerability to poverty among rural elders in rooted in lifelong employment disadvantages associated with rural economies.³⁴

Elderly Migration

Migration in rural areas is usually associated with younger persons relocating for greater employment options. Typically, seniors are a very stable group and do not frequently move. Persons age 65 and over represented only 4 percent of all movers within the U.S. between 1992 and 1993.³⁵ Only about 3 percent of all seniors moved far enough to change county residence and most of them stayed in the same region. Despite the actual minority of mobile elderly persons, there are certain identifiable migration trends among older persons which have significant impacts on rural areas. These trends have been broadly categorized as amenity migration, dependency migration, and rural return migration.

Amenity migration refers to elders who migrate to nonmetro areas in search of amenities such as good weather and recreation. Typical amenity migrants are those relocating to retirement communities and small towns in the Sunbelt.³⁶ These migrants tend to be younger, healthier, and wealthier than other senior of migrants. As a result they often do not in need affordable housing options, and in many cases they desire higher cost housing. Dependency migration, on the other hand, refers to the exit from a rural area to a larger city or population center for services that cannot be found in the current area. These migrants are more likely than amenity migrants to have lower incomes and be in need of services unavailable in their area. Studies have shown that older persons moving out of nonmetro areas indicate a higher level of dependency than those moving into rural locations. ³⁷ These moves are often facilitated by younger relatives. The final migration pattern is rural return migration. This migration stream consists primarily of rural elderly households returning to their native rural county or area of origin after an employment-induced exodus. These migrants are more economically and socially independent than long-time rural residents, but less so than amenity migrants. Gender may also play a significant role in rural elderly migration. Some studies suggest that elderly widows often move from small towns and villages to metropolitan areas, whereas as widowers are more likely to remain in rural areas.³⁸

Services and Rural Elders

One of the most unfortunate aspects of the human aging process is the inevitable decline in function and ability. Chronic disease, cognitive impairment, failing vision or mobility problems can have devastating effects on the lives of elders. Until recently, the onset of any of these factors meant almost certain isolation, burden on family or friends, or placement in a long-term care facility.³⁹ However, the recent expansion of community-based services has changed the landscape of housing provision and quality of life for many elders.

Most of the nation's 31 million people aged 65 and over have no functional problems, but one in four struggles with a physical or cognitive disability that limits independence or requires intensive medical care.⁴⁰ With modern gerontological care, the option of moving to a nursing home is no longer viewed as the only solution to the service needs of frail elderly persons. Because of the high homeownership rate among elderly residents, and generally high levels of satisfaction with their neighborhoods, seniors tend to want services in their communities rather than in group settings such as nursing homes.⁴¹ These services range from food, medical, and transportation assistance, to those which enhance recreation and socialization.

While these community-based services are in great demand by elderly persons, they are often not readily accessible in many rural areas. Small populations spread over great distances, and a lack of infrastructure and resources, make it difficult to administer social services in many rural areas. This problem is exacerbated by a lack of public transportation, which inhibits rural elders seeking services in nearby population centers.

The deficiency of community-based service provision in rural areas is often mitigated by the presence of informal support networks, including family members. Close kinship ties have traditionally been strong in rural cultures. Family members are the principal providers of long-term care for the frail elderly, providing from 80 to 90 percent of personal care, medical related care, and help with the tasks of daily living. ⁴² While strong informal networks and kinship ties help mitigate this service deficiency, they are no replacement for the array of assistance that can.improve the quality of life and allow elderly residents to remain in their rural homes and communities.

Federal Housing Programs for Rural Elderly Residents

A number of federal programs address the housing needs of elderly persons. These programs are primarily administered by the U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of Agriculture's (USDA) Rural Housing Service (RHS).⁴³

The only federal housing program dedicated exclusively to elderly rental housing is HUD's Section 202 program. It provides capital grants to nonprofit sponsors for construction and rehabilitation of apartments for persons 62 years old and over. Housing financed under this program may include appropriate support services. Approximately 25 percent of Section 202 funding must be set aside for use in rural areas.⁴⁴ Other HUD rental programs which support elderly housing needs include the Section 8 new construction and rehabilitation program, which provides a developer with rental assistance attached to the housing unit. Low-income seniors can also receive the Section 8 rental assistance vouchers, which provide rental assistance to tenants for use in private market housing. In addition, HUD's two large block grant programs, HOME and Community Development Block Grants (CDBG), also support production of affordable housing for elderly persons.

The RHS Section 504 home repair program provides loans up to $20,000 and grants up to $7,500 to very low-income homeowners to repair their homes and remove health and safety hazards. The grants are available only to persons 62 years or older to make their homes safe, sanitary, and decent. Section 504 loans, although not restricted to elderly homeowners, are made at an affordable 1 percent interest rate for a term of 20 years. The Section 504 program has helped many very poor seniors get amenities such as running water and an indoor bathroom for the first time in their lives.⁴⁵

RHS also administers the Section 533 Housing Preservation Grant program (HPG), which provides grants to nonprofit organizations for the rehabilitation of homes. Anecdotally, HPG is regularly used to assist elderly homeowners with rehabilitation work.

Although RHS has no specific rental housing program for elderly persons, special regulations and requirements in the Section 515 rural rental housing program allow its use to develop congregate housing for elderly, disabled, and developmentally disabled persons. Elderly tenants may also reside in Section 515 housing that is not expressly set aside for elderly residents. The Section 515 program has seen steep budget cuts in recent years, which have drastically reduced it effectiveness in serving the rental needs of rural seniors.

Methodology

The purpose of this study is to provide a profile of how federal funds have been used to meet the housing needs of elderly persons in rural areas, and to identify the factors that promote and support innovative elderly housing initiatives. Four rural counties are the subject of case study. The following questions were addressed in the context of these case studies:

• What do the case studies suggest are the primary federal funding sources for developing elderly rental housing in rural areas? What nonfederal funds were leveraged in projects in case study counties? To what extent have state governments invested in rental housing for rural elderly residents in the case study counties?
• What do the case studies indicate are the primary problems faced by elderly homeowners in rural areas? In case study counties, what types of rehabilitation services are in greatest demand for rural elderly homeowners? How have federal programs been used to address these problems?
• What emphasis has been placed in case study counties on extending services and housing assistance to elderly homeowners in rural areas so they may age in place? Conversely, to what extent are rural elderly residents relocating to county population centers in order to obtain decent, affordable housing, access to transportation and consolidated services, or for other reasons, such as to be closer to family?
• Are there examples in the case study counties of creative collaborations between rural affordable housing sponsors and service providers in order to better meet the range of housing and lifestyle needs of rural elderly residents?
• Do the case studies suggest any differences in housing and service provision in more remote or sparsely settled rural counties, as opposed to rural counties with larger population centers?
• Elderly residents require a full continuum of housing options, ranging from rehabilitation assistance for homeowners to long-term nursing home care, with a variety of assisted living opportunities between these extremes. What gaps in the range of housing options to meet rural elderly housing needs are evident in case study counties, and how have rural affordable housing sponsors addressed these gaps?

Census data, supplemented by other data sources as available, are used to provide background information on each county selected for case study. The case studies describe elderly housing needs and trends in each county. For each county, federally funded elderly housing projects, programs and initiatives are also described. Interviews were conducted onsite with housing providers, representatives from service organizations, or public agencies serving elderly residents in the counties. In addition, other local experts on elderly housing, transportation, or healthcare needs were interviewed.

Counties were selected to achieve geographical and demographic diversity. They also reflected a range of housing efforts to meet rural elderly housing needs. The rurality of counties was determined using the U.S. Department of Agriculture's Rural/Urban continuum codes. One sparsely settled county was selected to help illustrate the provision of elderly housing assistance in remote rural areas as opposed to counties with larger population centers. Two of the counties analyzed were characterized as retirement destinations. They both experienced at least a 15 percent increase in their over age 60 populations between 1980 and 1990. Overall the counties illustrate how a variety of federal housing programs have assisted low-income elderly homeowners and renters. All counties selected for case study exhibit active federal program delivery to the elderly.

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