Elderly and housing costs

1. Elderly and housing costs Constraints in mobility on the housing market M. Leussink J. Smeets

2. Content • Introduction • Housing costs • To move or not to move • Push, pull & keep factors • Discussion

3. Introduction (1) One of the goals of the Dutch policy is to stimulate elderly people to live independently as long as possible (up to 75-80 years old). Especially Housing Associations have the task to accommodate these elderly households in combination with services (‘live and care’-concepts). Not only the households in the rental sector belong to their target groups, but also elderly households in the owner occupied sector. The question is: Are they willing to move? What are the reasons to move or not to move?

4. Introduction (2) Forecasted development of senior citizens in region Eindhoven (Province Noord-Brabant) shows that the target group growth rapidly.

5. Introduction (3) • This presentation is mainly based on three surveys: • A survey among tenants and owners about their housing costs in the region of Eindhoven providing insight in the affordability of housing. • [Leussink & Smeets, 2012] • A research of Van Ginkel among elderly households to get insight in the significance of push, keep and pull factors in the decision to move or stay. • [Van Ginkel, 2012] • A tri-annual housing survey among inhabitants of South East Brabant. • [SRE, 2011]

6. Housing costs (1) The housing costs of households are not only determined by rent or mortgage but also by dwelling-related costs. pag2

7. Housing costs (2) Dwelling related costs as energy have increased continuously and will increase in the future.

8. Housing costs (3) • Population: • Social rental sector: Households in affordable dwellings (rent < €652,52/month) • Owner-occupied sector: Households in affordable dwellings • (purchase price < €250.000) • Respondents: • Social rental sector: N=910 • Owner-occupied sector: N=580

9. Housing costs (4) Elderly households in: - Social rental sector: 55% - Owner occupied sector: 31%

10. Housing costs (5) • Specified housing costs by type of households in social rental sector

11. Housing costs (6) • Specified housing costs by type of households in owner occupied sector

12. Housing costs (7) • Housing costs quota* by type of households in social rental sector * Ratio of current housing costs/disposable income

13. Housing costs (8) Housing costs quota* by type of households in owner occupied sector * Ratio of current housing costs/disposable income

14. Housing costs (9) • Housing costs of young elderly (55-74) and elderly (>74) households in.. • ..social rental sector: ..owner occupied sector:

15. Housing costs (10) • Total housing costs in social rental and owner occupied sector during • course of life:

16. To move or not to move (1) • Housing costs of elderly people in the rental sector are substantial higher • then in the owner occupied sector. • A shift from the owner occupied sector toward the rental sector has • -among others- cost implications for the household. • Are elderly people willing to move and what are the push, keep and pull • factors?

17. To move or not to move (2) • In general: only 14% of the elderly households is willingto move withintwoyears (PBL, 2013). • Keep factors are [Planbureau voor de leefomgeving, 2013; “Vergrijzing en woningmarkt”]: • moving does not lead toanimprovement of the housingsituation[Schellekens 2010, Van Iersel et al., 2009] • resistanceagainstmovingincreaseswithage[Huff & Clark, 1978] • attachment todwellingand direct environment increaseswithage[Filius 1993; Van der Meer 2006; Smith 2009] • higher total housingcosts in the rental sector can owners do decide not to move tothat sector • [Leussink & Smeets, 2012]

18. To move or not to move (3) [SRE: Woonbehoeftenonderzoek Zuidoost-Brabant 2011] The main push motive for elderly to move is fysical limitations/need for care.

19. To move or not tomove (4) In generalthosewho are willingtomove are lookinglessfor an owner-occupied property (59% in 2007; 49% in 2011). Especiallyforelderly households a rental dwelling can be a pull factor. Owner occupied property Land to build Rental home

20. To move or not to move (5) • Constraints to move (SRE, 2011): • Economic crisis andgovernmentalplans: • No/notenoughmortgage • Expectedproblemssellingcurrentdwelling • Uncertaintyaboutmortgage interest relief (tax benefit) • Uncertaintyaboutworkingsituation • Finding a socialrentaldwelling is harder because of incomelimitations

21. Push, pull & keep factors (1) Source: Van Ginkel 2012

22. Push, pull & keep factors (2)

23. Discussion (1) The tendency to move among elderly people is small. A housing policy that is based on the assumption that elderly will move to ‘live and care’ dwellings in the rental sector and will create space for younger movers on the market will fail. The keep factors for elderly households are strong. Elderly people will live independently as long as possible anyway.

24. Discussion (2) The low housing costs of owner occupiers is a strong keep factor. Thosewhoare willingto move expectproblemssellingcurrentdwelling.

25. Discussion (3) However the next generation of elderly will have higher housing cost. (interest-only mortgages, second mortgage). Costs as a keep factor will be less significant. The other keep factors (dwelling type, attachment, facilities) however will also be of importance for them.

26. Thank you for your attention! Email: j.j.a.m.smeets@tue.nl