While Colorado has experienced an increase in property values and new construction is booming throughout the state, an unintended consequence has resulted for older adults. One of the hardest hit are older adults who are living on limited incomes of less than150% of poverty and who rent, rather than own their own homes.
Colorado gives some relief in housing costs to property owners. Years ago a constitutional amendment that allows individuals age 65 and over who have lived in their own home for ten years or more to qualify for a Property Tax Homestead Exemption to reduce the amount of property tax by 50% on the first $200,000 of value on the home, regardless of income. Applications must be filed by July 1 of the year prior to the taxes being due with the County Assessor’s office. An application has to be filed only once.
Hardest hit are single individuals who have been renting the same apartment for a long time, sometimes as long as 20 or more years. While the landlord has steadily increased the rent over the term of the lease, today these individuals are seeing rent increases that are sometimes as much as $300 or more per month, making the monthly rent as much as $1000 or $1200 per month. The attitude of the landlord is “pay or move”, not easy for someone who is 80-years old with a limited support system and few family members.
Many landlords are also selling buildings to developers who are looking to change the use of the property to the “highest and best use”, meaning the existing building is demolished to make way for new construction or the existing building is converted to new condominiums.
Another group of older adults that are affected by the current real estate environment include traditional senior buildings that are owned by church groups and other nonprofit organizations. The boards of directors of these community-based organizations make business decisions to sell the property resulting in displacement of very low income seniors who have been long-term tenants.
In recent years through a combination of tax credits, special bonds, and housing authority initiatives, some new construction has been built and continues to be built to meet the needs of moderate income individuals. While these units meet a significant need, the monthly rent plus utilities represents more than 50% of many Social Security beneficiary’s monthly income, resulting in significant hardships.
With more and more health care costs shifting to the Medicare beneficiary, increased food costs and increased rent, many older adults are experiencing more expenses than the monthly Social Security income. Even moderate income buildings which offer lower rent are often not an available option.
Low income seniors who usually pay 30% of their income for rent, with the balance paid by housing vouchers are having problems finding affordable housing due to lack of availability.
Another effected group are residents in nursing homes. They are not being discharged through the Money Follows the Person program because of the lack of affordable housing. While some vouchers are available for this Program to help with paying the rent, finding landlords that are willing to accept a housing voucher is very difficult, oftentimes causing individuals to live for an extra year or more in the nursing home, rather than in their own apartment.
Landlords who have traditionally accepted housing vouchers from low income seniors either as private landlords, through community-based organizations, or for-profit corporations are evicting low income seniors because they can receive a higher monthly rent in the private market without the subsidy. The market rent approved for the housing voucher is often far less than the landlord can receive if the unit is rented in private market.
Cities, counties and the state have not been very responsive to meeting the increased demand for low income housing. In the past ten years, Denver County alone has lost more than 5000 units of low income housing for seniors who pay 30% of their income in rent to new developments or change in use. This trend is continuing with more units being taken off the market than being added to the housing inventory.
While several new low income housing units have been constructed in Colorado in the past five years with federal, state or local support, the demand far exceeds the supply. Most buildings that cater to low-to-moderate income seniors have between six months and two-year or more waiting lists, hardly an answer for an older adult who has received a 30-day eviction notice. Many buildings are not adding names to the waiting list.
Some community groups are looking into public will building and identifying ways to increase affordable housing. The need in Colorado is for low income as well as moderate income housing. Without some type of government intervention at the city, county and state level, more older adults will become homeless, have to move in with family, or move to other states.
If you are experiencing problems with affordable housing, call your elected city, county, state and federal officials to discuss the situation. For more information call 303-333-3482.
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