HOUSING DEMAND AND TENURE CHOICE FOR SENIOR CITIZENS: LESSONS FROM THREE ESSAYS

Abstract

The U.S. housing market faces a huge surge brought on by the growth of the older population. Housing researchers and gerontologists are now focusing on potential challenges that older households could face over the coming decades and are attempting to estimate how such challenges will affect the housing market. This marks a critical point for assessing housing affordability, availability of accessible housing, and housing demands based on geographical locations – all of which will be of utmost importance to aging populations in the coming decades.

Although the older population is growing rapidly and is receiving considerable attention from both researchers and policymakers, there have been relatively few empirical studies about the housing behaviors of older Americans. This dissertation examines the aforementioned three challenges through empirical essays by employing micro-data (e.g., the 2004–2014 Health and Retirement Study, the 2011 American Housing Survey, and the 2013–2017 Public Use Microdata Sample).

Specifically, the first paper will examine the reasons why elderly homeowners make the downward transition from homeownership, with a particular focus on the significance of property taxes on elderly behaviors. The second paper will investigate the living conditions of existing housing for stayers – those who have remained in their place of dwelling since reaching the retirement age of 65 – and estimate how accessible their housing is to meet the daily needs for aging in place. The third paper will seek empirical determinants on residential mobility and housing choices by elderly households in the Baltimore MSA, accessing the net impact of individual and housing attributes on migration behaviors and housing consumption.

The results of these analyses show that property tax abatement programs fail to provide tax subsidies targeted to low income seniors in need. Furthermore, policy approaches to grow the accessible housing stock have proven largely unsuccessful. Finally, seniors who migrate throughout the Baltimore MSA show a strong tendency to downsize and become renters – particularly of apartments – regardless of location. This research will provide timely new evidence, which will help decision-makers better understand the burning issues that impact aging adults’ housing-related behaviors in the U.S. housing market.