On Sunday, City Councilmember Tony Daysog — who tweets a lot of truly random things — tweeted something that caught my eye:
The New York Times editorial board was the latest to weigh in on the need for affordable housing, but not just any sector of the population, but for our rapidly aging population of retirees. This editorial follows a recently released report from the Harvard University’s Joint Center for Housing Studies: Housing America’s Older Adults. From the Editorial:
For various reasons, the next wave of retirees will be at greater risk of homelessness, hunger and other problems than their immediate predecessors. Fewer of them will benefit from traditional pensions, which are disappearing. Many lost their jobs during the recession and have exhausted their savings. And low-income homeowners who were counting on home equity to finance retirement lost nearly a third of their wealth.
One-third of adults over 50, and just over one-third of those over 80, are “rent burdened” and paying more than 30 percent of their income for housing. This often means they have to cut back on essentials like food and medications.
The Editorial goes on to say that the number of families requiring federal rent assistance is projected to grow exponentially in the next few decades even as rent subsidies of privately owned homes (Section 8) begins expiring and the public housing stock continues to decay.
For the aging population of retirees, the Editorial suggests that:
Obviously, the federal government needs to step up. But so do the states, particularly in one area of great importance to many older people: housing equipped to accommodate wheelchairs and other necessary features. Some states provide grants and loans for such things while others require homes built with public subsidies to be accessible to the disabled. Given the population trend, these programs should be broadly and rapidly emulated.
Alameda has done a fairly good job at requiring new developments — namely Alameda Landing and the Del Monte building — to include universal design into a portion of the units. The universal design element still doesn’t help to tackle issues of affordability if opponents to these projects insist on — particularly for the Del Monte project — bundling in parking to increase the overall cost of the unit itself, or worse adding a two parking per unit requirement per unit and bundling that in as well.
While we can all say, just build senior housing and leave it at that, unless those senior housing developments are supported through public financing they’ll still be unaffordable to the population of seniors that this latest report is concerned about. Take the newest senior housing project due to come on-line pretty shortly that is taking up the old Chevy’s site. This project is a part of the existing Cardinal Point company. While there are some options for people of moderate income, the majority of these units are directed toward the “luxury” set. From their website:
Oakmont of Cardinal Point provides luxury living that cannot be explained but must be experienced. Daily tasks and quality of life are improved with access to our full time concierge, health & fitness programs, world class chefs, and even chauffeur service.
The affordable units for income qualifying individuals start at nearly $3000 per month, which does include board, but definitely might be beyond the ability of a lot of older people on fixed incomes to actually afford.
Here’s one super depressing infographic factoid from the Harvard report:
If you don’t want to read the whole report, the Executive Summary has a great overview with some of the things that can be done in local communities to help its retiree population.
While adding additional units to the overall supply won’t massively reduce overall affordability in Alameda and the Bay Area in general, it definitely won’t hurt.
Blogging Bayport Alameda 
Thanks to the “dot-com bust” of 2001-2002, we are still working in our 60s–at or near the time at which we once thought we could retire. (We may not be able to retire at all.) Even now, we could not afford the $3000 a month at Cardinal Point, much less on the reduced income we will have when we stop working.
Comment by Jon Spangler — September 26, 2014 @ 7:58 am
I strongly believe that one of the things government should be doing is to give incentives to business owners to hire workers over 50. This would be even more doable with national health care, because one of the obstacles to convincing corporate America to hire older workers is the higher cost of insuring them. During the recession, even companies that were doing well financially used the excuse of the recession to layoff older workers and improve the bottom line.
I think we all know someone who this happened to whose inability to get hired afterward forced them into early retirement or a job that is way below their skill set. These are people willing and able to work but the ageism is so daunting, many have just given up. Young people should be fighting for this too, because their taxes will have to support those who can’t make it, and people are living longer than ever. Already I see young people in social media complaining about having to support the Baby Boomers, saying things like “die already.” We don’t want a hand-out, but a hand up is sorely needed.
Comment by Denise Shelton — September 26, 2014 @ 8:33 am
The quality of life for most “Baby Boomers” will certainly be lower once they retire. It’s been in a declass for the past 18 years. The cost of living has increased to such a degree that people can no longer stay up with it. The recession and the down turn of 2001 weakened baby boomers to such a degree, it has caused them to live off of their savings and credit cards. Unfortunately, people over 60 are using money today that they will need in 5-10 years. It is a depressing thought, but suicide rates in this country will increase dramatically over the coming decade.
Comment by Bill — September 26, 2014 @ 2:15 pm
Imagine how bad it would be here if Prop 13 wasn’t around and Baby Boomers had to pay equitable property taxes.
Comment by Brock — September 26, 2014 @ 2:23 pm
I cannot but recall an interesting conversation on this very blog when I said the so called gentrification was nothing else but cleaning your saving , sound like these old bones were no so wrong after all ……
Now let see if the over building of the base / del monte and other will have the same effect ……deep down we all know it will , most don’t care , they do not leave there …
Comment by Joel Rambaud — September 26, 2014 @ 2:56 pm
4. if you approve of Prop 13 don’t you think current taxes are “equitable”? I actually agree that without Prop 13 a lot of elders on fixed income would be in trouble or worse trouble. However, don’t you think there could have been other creative but truly equitable ways to protect fixed income people than this Draconian law, the commercial half of which is a complete boondoggle which benefits people who don’t warrant protection?
5. sorry, no idea what you are talking about.
Comment by MI — September 26, 2014 @ 5:02 pm
6. looks like I need to turn my snark factor up a notch. I would be in favor of property tax subsidies to seniors who are truly in need but this system sucks. P13 is a massive “hand-up” to boomers (one of many).
Comment by Brock — September 27, 2014 @ 9:57 am
Most of those “truly in need” seniors are sitting on massively appreciated and largely untaxed assets: their home. In the rest of the country, where property taxes are value based (and school funding and credit ratings are higher) people in such a position typically sell, take their mostly if-not-completely untaxed profit and downsize.
By subsidizing seniors, Prop 13 causes a lot of supply to be pulled off the market, which is a significant portion of the cost-of-living difference between CA and other states.
Comment by dave — September 27, 2014 @ 10:17 am
As Property Values again rise I am sure there are others here benefiting from Prop 13 besides Seniors. Anyone who has purchased a property during the period of time before 2007 is benefiting. Seniors also have Prop 60 & 90 which allow them to retain their original Tax Basis when purchasing a qualifying property in CA. So they are free to move and downsize if they so choose w/o Tax consequence. I think that as Seniors (which I am) become healthier and live longer they are able to remain in their homes especially if they are happy there. I think at least in Alameda this is the case.
Comment by frank M — September 27, 2014 @ 12:20 pm
Lauren I think the new facility at the old Chevy’s site is geared towards Alzheimer’s patients.
Comment by frank M — September 27, 2014 @ 12:30 pm
Dave
Am I reading you correctly ? Sound like being over 60 and owning a house is a crime “fiscal” in your view .
Work all my life to be able to afford what they call the American Dream , only to find myself tax out of it to pay for bad business de ion made around the City ,hospital,school,alameda power and telecom(if I recall we lost a few hundred million on that one.)
Want togenerate cash flow kick out the N F l , the hospital and the organisation claiming to be nonprofit , just for fun try to skip on the hospital bill,try to sneak into any football game played in stadium we the tax payer built ….
Prop 13 has a lot of benefit , it should be limited to only one leaving residence ,as a large appt building around pay the same taxes as I do ????
Comment by Joel Rambaud — September 28, 2014 @ 1:53 pm
Thanks to Prop 13, many Boomers were able to keep their homes and so, when they do need to transfer to a nursing facility–and unfortunately a lot will–they can sell and have the money to afford to pay for it instead of relying on younger taxpayers to foot the bill.
Prop 13 needs to be amended but not repealed. There are loopholes that let billionaires avoid taxes because of it. It was not designed for them. It was designed for the people they love to lay off within 10 years of retirement to improve their almighty bottom line, those over 50.
Comment by Denise Shelton — September 29, 2014 @ 7:05 am
Mssrs. Jarvis and Gann, the authors of Prop 13 were big investors in rental property in So. California. The law was designed to benefit them, as well as business. The proposition was marketed as a huge boon to the elderly, who were being taxed out of their homes. It did have a positive effect on the people who were grandfathered in to their lower tax base and a fixed increase in tax rates. However, when those properties turned over, the new tax rates applied and gross inequities ensued. We own two adjacent properties, pretty close in market value. One is under Jarvis; one is not. The difference in the tax base for them is enormous. It is these inequities that will eventually cause the taxpayers to want to modify the law, I think.
There were other possible solutions to the problem of the aging folk being taxed out of their properties; one of the easiest would be tax forgiveness of the increased tax rate with a lien and payback to the government at the time of eventual sale, presumably on the death or incapacity of the owner.
Comment by Kate Quick — September 29, 2014 @ 7:31 am
# 13 Kate I don’t think you understand Prop 13. All property is governed by it. When it was passed those with existing properties were re-assessed back to the 1976 Base value. Going forward property taxes could increase 2%/year.
New base was established whenever there was a change in Title. So anyone purchasing a property since then tax basis is 1% of the purchase price with 2% compounded each year they have owned their property. If there is major construction done that also is a basis for re-assessment.
Click to access Prop13.pdf
Click to access pub29.pdf
Comment by frank M — September 29, 2014 @ 8:13 am
#14 I understand that very well. The problem is that when properties under the reassessment grandfathering date sold, they lost that lower base and went to the base upon which they were actually valued (sold) 1% tax.. Therefore, current market value of two like properties, one sold and one grandfathered have their taxes calculated on wildly differing bases. This inequity causes some tension between new buyers with higher taxes and those who benefitted from having their properties fixed at the 1976 base value. All grow at the same 2%, but if your base is at a 1976 value, it in no way reflects your current value and you are paying a lot less in taxes compared to other, non-Jarvis properties. If you are living in a Jarvis property, you are less likely to sell it, because if you purchase another home, even if it is smaller, you may wind up paying very big taxes on top of our currently inflated purchase prices. For those who had a 30 year mortgage in 1976, the home, if not refinanced, is likely to be paid off by now. No mortgage and low taxes make it hard to leave behind for a new mortgage and higher taxes in a smaller place. It only makes sense to sell if you need the cash for long term care and are not moving to another home or rental. Some do that; but many just want to scale down after the kids are gone and Jarvis-Gann makes that a bit harder to do.
Comment by Kate Quick — September 29, 2014 @ 9:59 am
#15 Lets say that someone bought a home in Bayport in 1998 for $600,000. They are still living there today and someone buys the house next door for $1 Million. Now without Prop 13 the original owner Tax Basis would jump from $600,000 (plus 2% annum) to the compatible of $1 Million. What I am saying is that everyone who stays eventually benefits due to the predictability of the 2% increase. People were having 100% increases back in the 70’s. If the person who bought the Million $ house stays there eventually the house next door will sell for $2 Million.
There are two things that allow older homeowners to sell their properties and downsize without Tax Consequence. The first is a $250,000 individual and $500,000 joint exemption under IRS rules. In CA we have Prop 60 and 90 which allows a senior homeowner to retain their original Tax Basis when purchasing a qualifying property within CA. So there is really nothing keeping homeowners from downsizing if they so choose.
Comment by frank M — September 29, 2014 @ 10:40 am