PLANNING AHEAD: Plans underway for affordable housing alternatives for seniors [Column]

In October, 2022 AARP published a summary of a program they sponsored known as the “2022 AARP Livable Communities Workshop.” The purpose of the program, the article, and the several publications and resources following, many of which are now available on line is “to bring together thousands of local leaders, housing practitioners, and AARP staff and volunteers to explore how communities nationwide can provide safe, affordable housing options for individuals and families of all backgrounds, incomes and abilities…” (www.aarp.org/livable-communities/)

The senior organization also obviously wants to involve interested individuals and communities as a whole regardless of their background or prior involvement.

There is little question that housing availability and affordability are top of the mind issues for planners today. Affordability, in particular, has been the subject of multiple recent articles.  Reasons given for the trend which in some articles has been described as a crisis include prior slowdowns constructing new housing although, a look around in the Philadelphia suburbs would seem to show a housing boom at this time.

Also concerning is restrictive zoning that does not allow for more creative solutions such as building on to existing structures, converting structures to alternative uses and adding smaller structures alongside the primary residence. One particularly interesting segment in the AARP materials previously described is a brief video explaining Accessory Dwelling Units or ADU’s which can involve, among other strategies, converting garages and basements to add apartments and additional living area.

Multigenerational living, only one of many options, is likely to become more common as people live longer. AARP cites U.S. Census Data that by 2030, one of every five people in the United States — or 20% of the nation’s population — will be age 65 or older. Shared households can bring the added benefit of convenience and save expense. Two households can share expenses including mortgage, property taxes, utilities, and so on.

This is not the first time I have written on this subject. Here are some ideas our office has worked on successfully for families facing these issues.

Adult Child Moves In With Parent. One plan that has been very successful for several clients has been a “buy in” with an adult child obtaining a home equity line of credit to purchase an interest as joint tenant with right of survivorship. The house can be inherited by paying one-half of the value and there is protection dealing with the Medicaid rules, among others. We call it “whole house for the price of half a house.”

Parent Moves In With Adult Child. Parent who is a widow or widower comes to live with son or daughter and his/her family.  Parent makes monthly payments which are described as “contribution to household expenses” (not rent) which is actually true. It is expensive to run a household which include costs for electric, water, telephone/television, groceries, repairs, property taxes, mortgage and so on.  There should be a written Family Agreement to describe all of this.

Informal unwritten understandings might run into difficulty with Medicaid rules regarding “gifting.” It is also important to describe the expectations of the parties regardless.

When a parent moves in with an adult child’s family, often modifications need to be made to the house whether it is adding a new bath or even an “in-law suite.” What will zoning allow?   Who should pay for what. If a parent pays, this should be described and the terms agreed to in writing.

Parents and Adult Children Buy a House Together. Parents’ home either requires major modifications for handicapped access or is located too far away from their nearest adult child to allow for regular visits. Parents sell their home.  Adult child and spouse sell their home. Together they buy a larger house with more modern conveniences and better handicapped accessibility. Parents might contribute the down payment.  Adult child’s family contributes to the settlement costs and/or some of the down payment and, because adult child has a regular income from employment, he or she and spouse make the monthly payments on the mortgage.

Elder law and/or real estate attorney can draft the Family Agreement, work with the Realtor and attend the settlement. House can be titled in joint names — one-half owned by father and mother, one-half owned by adult child and spouse. Each half would be tenants by the entireties as between the spouses but joint tenants with right of survivorship as to the whole. The agreement — if properly drafted — can also take care of “gifting” concerns later.

Janet Colliton, Colliton Elder Law Associates, PC, is a Certified Elder Law Attorney and limits her practice to elder law, life care and special needs planning, Medicaid, real estate and estate planning and administration and is located at 790 East Market St., Suite 250, West Chester, 610-436-6674, [email protected] She is also, with Jeffrey Jones, CSA, co-founder of Life Transition Services LLC, a service for families with long term care needs.

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