A COMPREHENSIVE GUIDE TO THE SENIOR ACCESSIBLE HOUSING ACT (HR 1780)
On March 29, 2017, the Senior Accessible Housing Act (HR 1780) was introduced to the House of Representatives by United States Congressman Charlie Crist of Florida’s 13th District. If passed by the House and Senate and signed by President Donald J. Trump, this bill would become law and amend the Internal Revenue Code of 1986 effective December 31, 2017 to include a home modification credit for seniors.
In short, the act would allow individuals 60 years of age and older to receive tax-based credits for changes made to their homes “to enhance their ability to remain living safely, independently, and comfortably in the residences.” Why is this issue so important?
Seniors and “Aging in Place”
According to data provided by the American Association of Retired Persons (AARP), 87 percent of Americans ages 65 and up indicate that they’d like to stay in their homes and in their communities as they grow older, also known as “aging in place.” The data goes on to show that approximately 71 percent of individuals ages 50 to 64 feel the same.
However, statistics compiled via the U.S. Census Bureau’s 2015 American Housing Survey indicate that there may be a few housing-related obstacles that could prevent older individuals from achieving this goal. For instance, out of the 118,290 homes surveyed, only 36,845 (31 percent) were one-story homes. Additionally, 66,534 (56 percent) reported that some use of steps was required to access their residences from the outside.
Homes like these could be problematic for older individuals who have difficulties navigating stairs. Research has found that several factors can make going up and down stairs harder for seniors, such as age, medication use, and lower body issues and pain.
The survey also found that a total of 57,938 homes (49 percent) had stairs present inside the dwelling. While most reported that the railings for these inner stairways were firmly attached, there were still 2,288 homes (3.9 percent) that had broken or missing railings. Another 1,069 (1.8 percent) homes’ steps were either missing or broken.
Issues like these can make it harder for seniors to get around both in and out of the home. Thus, repairing them or otherwise modifying the home can help keep older adults in their residences while also providing a higher quality of life.
High Costs of Out-of-Home Care
Another reason many seniors prefer to stay in their homes are the high costs typically associated with nursing home care. According to a 2017 Genworth Cost of Care Survey, which covered 440 U.S. regions, the median monthly cost for a semi-private room in a nursing home is now around $7,148. A private room is even higher, at $8,121 per month.
With the American Association for Long-Term Care Insurance reporting that the average length of stay in nursing homes is 2.6 years for women and 2.3 years for men, these costs can easily exceed $200,000.
Granted, long-term care insurance can help offset these larger and longer-term expenses, but the AARP indicates that only 7.2 million Americans currently carry this type of insurance, at an average cost of around $140,000. For some, this is also too much money, even though not having it means that they’re more financially exposed.
Finding someone to provide home health care is often a much cheaper option as the Cost of Care Survey found that the average cost for a homemaker services is roughly $3,994 monthly and a home health aide is slightly higher at $4,099. These amounts are around half the cost of a private nursing home room, with the most affordable homecare option being adult day health care, which averages about $1,517 per month.
The Senior Housing Shortage
An additional concern that leads more seniors to want to stay in their homes is whether senior-accessible housing will be available when they need it.
According to a report released by the Joint Center for Housing Studies of Harvard University titled “Projections & Implications for Housing a Growing Population: Older Households 2015-2035,” the number of Americans 60 years of age and older is expected to increase from 48 million to 79 million by the year 2035. Individuals who are 80 years and up are also expected to double during this timeframe (from 12 million to 24 million), with most of the increase anticipated between 2025 and 2035.
This type of growth is expected to put a strain on safe and available senior housing, which is why Harvard suggests that individuals begin to think about “costs, the suitability of the home, and its accessibility to services” before reaching a point where these factors become critical.
For reasons such as these, many seniors find that it is easier and more realistic financially to simply modify their homes to better handle their needs as they continue to age. But which modification expenses can be written off should this bill make it to law?
What Types of Expenses Can Be Deducted With HR 1780?
The types of expenses eligible for credit under HR 1780 are those commonly associated with increasing a senior’s ability to safely maintain independence in his or her home. These include costs related to installing:
- Entrance and exit ramps
- Handrails and grab bars
- Non-slip flooring
This act also allows for the credit of expenses related to the widening of doorways, which may be necessary in cases where wheelchair access or walker use is required for the senior to stay in the home. So, how much of a credit is a senior entitled to take if these types of home modifications are made?
How Much Can Be Credited Under the Senior Accessible Housing Act?
The Senior Accessible Housing Act would allow for the credit of up to $30,000 in expenses. It’s also important to note that this amount doesn’t renew annually. Instead, it is a lifetime credit that continues to tally from year to year and can no longer be used once a total tax deduction of $30,000 is reached.
For instance, if you were to do $10,000 in creditable home modifications this tax year, the maximum amount of credit you can take next year is $20,000. And if you were to take these two credits ($10,000 this year and $20,000 next year), you would not be entitled to any future credits, even if the expenses were related to modifications designed to help you stay in your home.
Average Costs of Home Modifications
KompareIt.com, a site powered by HomeAdvisor, says that there are some general price ranges for home modification projects related to increasing accessibility for seniors.
Modifications made to the bathroom generally take the largest portion (if not the whole amount), as average costs for changes made to this particular room typically fall in the $15,000 to $30,000 range. Furthermore, they often include making some relatively major changes, such as adding a shower that sits flush with the floor and installing a door that swings open widely.
Other price ranges for common home modifications related to making a home easier for seniors to navigate include:
- Installation of grab bars, increasing safety while in the bathroom – $100 to $200
- Doorway widening to accommodate wheelchairs or walkers – $600 and up
- Installation of a removable entry ramp – $100 and up
- Installation of a custom, permanent entry ramp – $1,500 to $15,000
How To Find a Reputable Home Contractor
As you can see, though the proposed credit is $30,000, depending on which home improvement projects are pursued, these monies may only help reimburse the expenses paid on just one or two changes. That’s why it’s so important to find a reputable home construction specialist who will do the job right.
U.S. News & World Report says that there are few things you can do to select a home contractor you can trust. This starts with knowing exactly what you want them to do before asking for an estimate. That way the contractor knows specifically what you want and can provide you with a price quote on that exact service.
Also, ask around to see who your friends and family have used and have been happy with their service. This keeps you from walking into the process blindly, while also incentivizing the contractor to do right by you to keep getting positive referrals.
Other tips provided by U.S. News include:
- Interviewing a minimum of three contractors so you can compare bids
- Asking for specifics as to what work the contractor will do and when subcontractors will be used
- Taking the time to thoroughly vet the contractor to make sure their licenses are up to date and to see if complaints have been filed against the individual
- Calling references to see what they have to say about working with the contractor
- Asking for a detailed contract
- Not paying more than 10 percent of the total cost before the project is started and waiting until the job is fully complete before making the final payment
While this won’t 100 percent guarantee that you’ll have a smooth home modification process, it definitely improves the odds.
How to Show Support for the Senior Accessible Housing Act
If you support the Senior Accessible Housing Act and believe that it would be valuable to give seniors a tax break when they make their homes more accessible for the long term, you may want to contact your local legislative leaders to ask them to back it too.
The National Education Association says that writing an effective letter to your legislator involves:
- Limiting it to one page and a single issue
- Introducing yourself so they know who you are
- Specifically stating the bill number you’re supporting (in this case, HR 1780)
- Briefly stating your issues or concerns regarding what happens if the bill doesn’t pass
- Sharing a personal story to explain why the bill is important to you
- Providing your contact information (full name, address, and email address) so the legislators can contact you if they’d like more information from you or if they want to discuss the issue further
If you’re unsure who these leaders are, you can find them with a quick online search. For example, you can find your House Representative by simply going to the House’s website, entering your zip code, and seeing who your Representative is. And if you’re mailing the letter, the address you’ll send it to is:
The Honorable (Representative’s Full Name)
U.S. House of Representatives
Washington, DC 20515
You can also find your State Senators on the U.S. Senate’s website. They are separated by party and state, in addition to the committees they are on, if you’re interested in that type of information. Or, you can click the dropdown menu on the top of the web page, select your state, and view a list of your state’s senators and how to contact them.
Again, if you choose to use regular mail for your letter of support, the mailing address for U.S. Senator’s is:
The Honorable (Senator’s Full Name)
United States Senate
Washington, DC 20510
Additional Ways to Enhance Seniors’ Independent Living
In the meantime, until this act becomes law, the National Institute on Aging (NIA) shares that there are other actions that can be taken to further enhance independent living for seniors.
The first is to create a plan for this type of scenario before it even happens so you’ll know exactly what you need to do in the event that a major life change occurs. This is particularly helpful in situations where you may need some level of outside help to tend to your personal and home care needs.
Individuals to consider for this type of future assistance include those who can help you with:
- Your personal care routine (bathing, dressing, etc.)
- Remembering to take medications in a timely manner
- Meal preparation and/or delivery
- Housework and yard work
- Running errands (grocery store, post office, and doctor’s visits)
- Financial needs (paying bills, handling medical expenses, and working with insurance companies)
Some of these roles may be filled by family members, friends, or neighbors, while others may require that you hire help from a professional service provider.
A few colleges are also working to address needs of seniors aging in place by providing somewhat unique living opportunities. For instance, New York University developed a “home stay” program that pairs students who are looking for lower cost housing with local seniors who need help with household duties and errands. This type of arrangement is designed to provide benefits to both parties involved.
Creating a Pre-End of Life Home Renovation Plan
While end-of-life planning typically involves writing your will or trust, naming your beneficiaries, and every other action necessary to make life easier on those you’ll leave behind, it also benefits seniors to do some pre-end of life planning. This reduces the stress on family and friends because you’ll have the necessary steps in place to ensure that you can spend your final years living the life you want.
When it comes to aging in place, this plan should encompass all of the things you need to do in order to stay in your current home. Think about the various scenarios that could present themselves and then ask which ones are most likely given your health and family history.
Although legislation like the Senior Accessible Housing Act can definitely help reduce the financial burden associated with some of these home renovation expenses, it also helps to have the rest of your finances in place in case the costs are higher than expected. And if you’re younger and in the home that you plan to grow old in, doing some of these repairs now can reduce the burden on your budget further down the road.
Covering Higher Home Renovation Costs
If your budget is stretched tightly right now, there are a few governmental programs that could help offset these costs.
One is the Section 504 Home Repair program, also known as the Very Low-Income Housing Repair Program. This program is offered by the U.S. Department of Agriculture Rural Development and its grants are provided to individuals 62 years of age and older. They’re intended to help those who are homeowners, unable to obtain affordable credit, and have a family income lower than 50 percent of the area’s median income.
It may also benefit you to check with the U.S. Department of Housing and Urban Development (HUD) to see what kind of programs they offer. Your local government may provide financial help with regard to home improvement and renovation as well, so research their available resources and see if any apply to you, your situation, and needs.
Some local agencies also provide assistance with making necessary home modifications for seniors at a reduced financial rate. While best-known for building new homes, Habitat for Humanity also provides renovation services at a lower cost. Applicants are chosen based on level of need, willingness to partner with the agency, and the ability to repay the costs “through an affordable repayment plan.”
Multiple Options for Aging in Place
Though aging in place does take some planning, there are several things you can do today to increase the likelihood that you’ll be able to achieve this goal tomorrow. The Senior Accessible Housing Act is one option to consider, but there are many other factors to think about as well.
These include having a general idea of what type of home renovation financing options are available given your location and circumstances, as well as having a general idea of what changes you may need to make to your home to enable you to stay in it long-term.
The more prepared you are to handle these types of issues before they even exist, the less of an issue they become.
“The act would allow individuals 60 years of age and older to receive tax-based credits for changes made to their homes.”