Produced by the Massachusetts Councils on Aging in partnership with Greater Boston Legal Services Funded by the Massachusetts Executive Office of Elder Affairs and Your Membership Contribution MCOAs 2017 Housing Issues Training Forum ID: 929974
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MCOA’s Housing Issues Training Forum
Produced by the Massachusetts Councils on Aging in partnership with Greater Boston Legal ServicesFunded by the Massachusetts Executive Office of Elder Affairs and Your Membership Contribution
MCOA's 2017 Housing Issues Training Forum
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Slide2What is the Problem?
Economic Insecurity in MA Elder Households
Living Longer + Low Pensions +
High Housing Costs +Depleted Savings + Lack of Financial Literacy +
(Financial Abuse for a few)= Economic Insecurity Older Adults Staying in a Home Too Long
Older adults living in a single family dwelling or an apartment that has become too expensive for 1 person to afford.
Older adults living alone suffering from social isolation.
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MCOA's 2016 Housing Issues Training Forums
MCOA's 2017 Housing Issues Training Forum
Slide3Forum Goals
To set the table for thinking about how to inject more housing “issues and choices” conversations, into your client education & counseling activities.
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MCOA's 2017 Housing Issues Training Forum
Slide4Agenda Today
1 PM Welcome
1:10 Setting the Table –
Housing is Costly!
Options for Cutting Costs2:15 Tenants & Landlords – Safeguards for Tenants2:45 Home Sharing – How to Go About Finding a Tenant to Share Your Housing3:00 Short Break3:10 Group discussion: What would you need
to
empower older
adults to think
more critically
about
their
housing options and take action?
4:00 Adjourn 4MCOA's 2017 Housing Issues Training Forum
Slide5Hosts, Funders, and Learning Methods
Hosts: MCOA – Mary Kay BrowneGBLS – Betsey Crimmins
FunderMA Executive Office of Elder Affairs
Materials:
Slide PresentationHandoutsPathway Today:Consider a way to counsel about short term and long term housing goals and options. Review key resources that help pay housing costs. Learn key rules for tenants and landlords.
Discuss how you could Integrate housing education and counseling into your community centers
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MCOA's 2017 Housing Issues Training Forum
Slide6Financial Education…
Is a process by which consumers improve their understanding of financial concepts, products, and risks.
They develop the skills and confidence to make informed choices, to know where to go for help, and take other effective actions to improve their financial well-being
.MCOA's 2017 Housing Issues Training Forum
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Slide7Setting the Table
MCOA's 2017 Housing Issues Training Forum
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Slide8Help! Owning a Home is Really Costly!!
-- Mary Kay Browne, MCOA Local Property Tax Relief Programs
State Income Tax Credit for property taxes or rent plus water/sewer bills that exceed affordability thresholds
Home Repair or Renovation Funding SourcesEnergy Cost Reduction Strategies
Reverse MortgagesMaybe Renting Would Be Better…8MCOA's 2017 Housing Issues Training Forum
Slide9What Does Affordable Housing Mean?
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Families who pay more than 30 % of their income for housing are considered
moderately cost burdened .
They likely have difficulty affording necessities such as food, clothing, transportation and medical care. Families who pay more than 50% of their income are considered severely cost burdened. Source: HUDMCOA's 2017 Housing Issues Training Forum
Slide10So What?
Nearly half (47%) of single Old Age Social Security Pensioners rely upon SS for all their income!
Average Social Security Amounts (2016): $1,341/month per person
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MCOA's 2017 Housing Issues Training Forum
Slide11MCOA's 2017 Housing Issues Training Forum
11In MA in 2014, 48% of renters are paying more than 30
% of income on
rent. Of those people, more than half (25.5%) were severely cost burdened (paying more than 50%)
Slide12Homeowners
MCOA's 2017 Housing Issues Training Forum
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Slide13The negative impact of
social isolationStudies show that
social isolation can be as dangerous as smoking 15 cigarettes a day.
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Slide14Friendships are a Big Deal
“Ironically, just at the time that we may need others more in our life to get around, to help with daily tasks, to talk with, we find ourselves utterly alone.”Janet Seckel-Cirrotti,
Executive Director, FriendshipWorks
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Slide15Options for Cutting Expenses
Tax Relief – Low Cost Home Renovation Loans - Utility Discounts – Tapping Equity - Downsizing – Home Sharing
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Slide16Types of Property Tax Relief
State Statutes (by local option)
Tax Deferrals Elderly Tax Exemptions
Town Adopted Program (by local option)Senior Work Programs
State Tax Credit Program:Senior Circuit Breaker Refundable Tax CreditMCOA's 2017 Housing Issues Training Forum16
Slide1741 A Deferral – Delay Payment
(“a low interest loan from town”)Eligible Age: 65 years
Income Limit: Set by local option, up to Circuit Breaker Limit
Defer Tax: All or part*,
up to 50% of value of property owned Interest rate: Set by town, not greater than 8%/per yearApplication: File annually Repayment Terms: Payment due when the owner conveys the property via sale, gift, or via probate MCOA's 2017 Housing Issues Training Forum
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Slide18Exemptions
Fixed Amount Set by TownEligibility Basics
All eligibility factors determined
as of July 1st.
Age 65 + requirement.Income and asset testsApplicant must own the property.Applicant must occupy the property as his or her domicile (your principal and legal home where your family, social, civic, economic life is centered.)
Applicant
must apply annually by
deadline which is related with when tax bills are mailed out by town.
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Slide19Senior
Tax Work Off Program Elders in the program earn an abatement that reduces their annual property tax, through working in a municipal department. The elder earns minimum wage pay for the work.
Eligible Age: 60 years and above.
Other Eligibility Factors: Some towns set a maximum income level. Assistance Amount: Up to $1500 maximum (2017). Amount is set by town
legislators. Amount earned is not considered income for state income tax purposes How its Paid: By abatement when actual tax bill issuedMCOA's 2017 Housing Issues Training Forum
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Slide20“Circuit Breaker” Refundable Tax Credit
A income tax credit for adults age 65 + Property taxes and half of water/ sewer bills must be more
than 10% of annual income (for renters, rent must be greater than 25% of their
income.) Adults can get this income tax credit even if they owe no state income taxes.
Also, you can get this refundable tax credit if you also receive a property tax exemption or senior tax work off.The value of the refundable credit can be as high as $1,070 for 2016 tax filers. To obtain the credit, you must file a MA Income Tax “Form 1” and the “CB Form” for the 2016 tax yearYou may file to get a refundable credit for the last 3 years* tax returns.
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Slide21Circuit Breaker, continued
25% Rule for Renters: The credit will equal the amount by which 25% of your rental payments exceed 10% of your income, up to the maximum credit of $1,070 in 2016.
The law assumes that 25% of rent goes toward property taxes.
Income Eligibility:
$57,000 – Single$71,000 - Head of Household$86,000 – Married and filing jointlyMaximum Home Value: $720,000MCOA's 2017 Housing Issues Training Forum
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Slide22Editable Fact Sheets Available
Go to www.MCOAonline.com to get fact sheet templates for use in your townInsert your local detailsPhone number for Council on Aging and the Tax Assessor’s Office
Interest Rates for property tax deferralsThe amount available for the property tax exemptionsThe office that manages the Tax Work Off Program and the eligibility factors for same in your town
Specific timelines and due dates for your town
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Slide23Next: Home Repair or Renovation Funding Sources
Multiple Sources Provide Loans, Grants, Donated or Discounted Labor
Self FundedHousing Consumer Resource Centers Veterans AgentsHabitat for Humanity
Local Funds for Home RepairsCBDGFHA backed Low Interest Loans
And othersSee Housing Issues Manual for detailsMCOA's 2017 Housing Issues Training Forum23
Slide24Next: Energy
Cost Reduction Strategies LIHEAPWeatherization Programs with generous subsidies
Utility Discount ProgramsUtility-funded Energy Efficiency Programs
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Slide25LIHEAP and WAP
Low Income Home Energy Assistance Program (LIHEAP) offers fuel assistance for low-income renters and homeowners. Eligibility is based on household gross annual income.
Once eligible, your local fuel assistance agency will notify your heating company. LIHEAP
application also covers WAP Current Income Eligibility:1 person - $32,618
2 person – 42, 654The Weatherization Assistance Program (WAP) for low-income households enrolled in LIHEAP, SSI and TAFDC Includes installation of weather stripping, caulking, storm windows, insulation, and other materials as well as burner testing, tune-up, and minor repairs.Massachusetts HEATLINE toll-free at: 800-632-8175
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Slide26Lowering Energy Costs for those not eligible for LIHEAP
The Good Neighbor Energy Fund: For limited income households who are NOT eligible
for LIHEAP.Operated by
the Salvation Army:In area codes 617, 508, 781, or 978: 1-800-334-3047
In area code 413: 1-800-262-1320Website: www.magoodneighbor.orgUtility Funded Energy Efficiency Programs
Free home energy use assessment
Rebates
on light bulbs and fixtures, electric clothes dryers, dehumidifiers, room air cleaners, advanced power strips, and energy-saving
showerheads, etc.
Guidance
and
rebates on new efficient boilers, water heaters, central air conditioning
systems and more. Installation at no cost or a reduced fee. 75% off, up to $2,000, toward the installation of approved insulation improvements. Contact your local utility company or DHCD: 617-573-1400.MCOA's 2017 Housing Issues Training Forum26
Slide27Next: Tapping Home Equity
What
is a Reverse Mortgage?
The FHA – insured Home Equity Conversion Mortgage (HECM) was signed into law on Feb 5
th
1988 by President Reagan
As part of the Housing and Community Development Act of 1987
A reverse mortgage is…
A loan against the home that allows qualifying senior homeowners to convert their home equity into cash
A loan that does not require monthly payments
A loan that requires repayment only when the last surviving borrower leaves the home permanently
Also know as a HECM & is federally insured by HUDMCOA's 2017 Housing Issues Training Forum27
Slide28Why do people get a Reverse Mortgage?
To pay off their existing mortgage and relieve household budget
To pay for home repairs/ImprovementsTo pay for taxes & insuranceTo pay for a large expense
To have access to additional funds for the future if neededTo improve their quality of life
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Slide29How does it work?
Works just like a regular mortgage but in reverse.
No payments are required & the borrower can receive money from the mortgage lender in several different ways
As a monthly payment sent for a certain term, or
As a lump sum at closing, orAs a line of credit to draw from as needed, orAs a monthly tenure payment sent as long as the borrower lives in the home, orAs a combination payment
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Slide30How much money
can
you get?
The lender will determine this based on:
The property valueYoungest borrowers ageThe interest rate used
Its usually between 40-60% of the home value
T
he younger the borrower the lower the amount
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Slide31The Pros …
No payments requiredAny money that you receive is not considered incomeNon-taxableNo restrictions on spending
Does not affect social security or Medicare Borrower retains title of homeNon-recourse loan
The Cons …
The loan balance grows over time Expensive loans, with high closing costsMost costly for short term useThe heirs inherit a home with a lien
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Slide32Borrower Obligations
Must live in the home as your primary residence for 6 months and 1 day out of each year
Must pay property taxes and home owners insurance and HOA fees
Must keep the house in good general condition
If the obligations are not met the loan can become due and payable and the borrower could lose the home to foreclosure
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Slide33How does a Reverse Mortgage get re-paid?
When the last surviving borrower leaves the home permanently (moves, sells, or dies), the reverse mortgage becomes due and payable
The heirs have 3 different options…
If they want to keep the home, they will have 6 months to re-pay the loan
If there is equity in the home and the heirs do not want it, they will have up to a year to sell, pay back the lender and keep the rest of the moneyIf there is no equity left in the home and the loan is upside down- the heirs are not responsible to sell or pay anything MCOA's 2017 Housing Issues Training Forum
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Slide34Impartial Counseling Requirement
Counseling is required by HUD through a 3
rd
party housing counselor who is specifically trained in the HECM program.
MA has several federally designated counseling agencies Counseling plays a vital role in the overall process of getting a reverse mortgage. The counselors job is to be impartial and go over the advantages and disadvantages The counselor explores all options with the borrowerThe counselor will help locate any resources to help them save money on any expensesMCOA's 2017 Housing Issues Training Forum
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Slide35“So, Maybe I Should Move….”
To Own or To Rent? That is the Next Question…Average rents are high, its true…But home ownership is even more expensive than renting for many people.
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Slide36MA Rent Levels are Higher than National Average
Boston MA (has a rental market with costs twice as high as the nation.)
The cost of living in Boston is 240% the national average, with apartments ranking 48% more expensive than the national
average of $934 in 2014.Boston, MA1 BR $1900
2 BR $2,3003 BR $2,650 Cambridge, MA$1,400 1 bedroom$1,750 2 bedroom$2,300 3 bedroomSources: April 29, 2016 - Rent.com and https://www.rentrange.com/boston-ma/
Brockton
1 BR $1,000
2 BR $1,200
3 BR $1,400
Springfield
1 BR $8002 BR $9203 BR $1050
Lawrence 1 BR $1,1502 BR $1,2503 BR $1,410Pittsfield1 BR $7802 BR $9003 BR $1,00036MCOA's 2017 Housing Issues Training Forum
Slide37MCOA's 2017 Housing Issues Training Forum
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Costs of Homeownership
Assume MA Home Costs $300,000
Per Period
Actual
Annual Cost
Transaction costs (realtor, attorney, appraisers, staging costs, etc.) when both buying and selling home (Assumes $125/month for a $100,000 home, owned for a 10 year holding period.)
Per
month = $375/Month
Times 12
$4,500
Annual taxes
Average property tax amount rate in MA for Homes was $14.91 per $1,000, according to DOR in 2014.
Annual
$4,473
Insurance
Average cost for homes
Annual
$900
Household maintenance (cleaning, touch up repairs and larger items such as roofs, furnaces)
Averages at 2%/year of the cost of home
$6,000
Forgone Interest / Opportunity cost by Tying Up $300,000 in a house,
Assuming 5% annual return for full cost of home invested over 5 years.
Annual
$15,000
TOTAL COST TO OWN A HOME
Per Year
$30,873
Per
Month
$2,572
Slide38Housing as Share of Income: Social Security Pensioners
Average Social Security Amount (2016): $1,341/month -- $16,100/yearAlmost half (47%) of single Old Age Social Security Pensioners rely upon Social Security for almost all
(over 90%) of their income!
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MCOA's 2017 Housing Issues Training Forum
Slide39Wide Spread Problem
For renters with incomes less than $15,000, 84% are cost burdened (paying more than 30%) In fact, an astonishing 77
% are severely cost burdened (pay more than
50% of their income on housing costs.)
Source: Harvard University, Joint Housing CenterFor renters with incomes between $15,000 - $29,999/year, still 77% are cost burdened
Of those, 37
%
are
severely cash burdened
(pay
more than 50
%.)
MCOA's 2017 Housing Issues Training Forum39
Slide40What Tenants and Landlords Need to Know
Betsey Crimmins, Senior AttorneyGreater Boston Elder Services
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MCOA's 2017 Housing Issues Training Forum
Slide41THE BASICS OF LANDLORD - TENANT LAW
IN MASSACHUSETTS
Slide42WHO CAN EVICT A TENANT?
A landlord can initiate the legal process,
BUT ONLY A JUDGE
CAN EVICT!
Slide43THE EVICTION PROCESS
.
INITIAL NOTIFICATION:
If a landlord wants to terminate a tenancy, he must first serve the tenant with a Notice
to Quit. This puts the tenant on notice that the landlord plans to terminate the tenancy by a certain date. However, the tenant does NOT have to leave the apartment by that date
Slide44NEXT STEPS
FILE A CASE IN COURT
:
In order to proceed with the eviction process, the landlord must wait for the notice period to pass. He can then file a Summons and Complaint
with the court which is then served on the tenant by a constable
Slide45THE ANSWER
This is the tenant’s chance to tell her story and build a successful legal case by asserting any and all
defenses
and counterclaims
she may have
Slide46DISCOVERY
Along with the Answer, the Tenant can request “
Discovery.” This requires the landlord to provide documents and answer questions that might be helpful to the Tenant’s legal defense
moves the trial date back two weeks
Slide47TRIAL
Each party tells their story to the Judge
The Judge will render a decision or “Judgment”
Each party has ten days to appeal
Slide48Post-Eviction Issues
Once Execution issues -
~ Landlord gives the paper to a constable
~ Constable delivers a 48 hour move out notice [move outs Mon. - Fri. only]~ Landlord pays movers and storage for 3 months
Slide49REASONABLE ACCOMMODATION
Federal
and state law allow people with disabilities to request and receive reasonable accommodations from their landlords to allow them to fully use their homes
T
Slide50TYPES OF ACCOMMODATIONS
~
Structural changes - e.g., installing a wheelchair ramp ~ altering management policies, rules, or services - e.g., allowing a blind tenant to keep a seeing eye dog even if a building has a no pets policy
~ support services plans - e.g., for someone with a mental impairment
Slide51WHAT IS AT RISK?
Eviction can result in
Homelessness;
Premature institutionalization; Exacerbation
of medical problems; Dangerous living situations; An increased risk of all forms of abuse; and, Extremely limited chance of ever accessing subsidized housing in the future!
Slide52Contact Info
Betsey Crimmins, Senior Attorney
Greater Boston Legal Services
bcrimmins@gbls.org
Slide53Home Sharing - An Idea Whose Time Has Come (Back)
See the guide to learn:What it isPros and Cons
How to go about itSample lease
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Slide54How Can We Empower Older Adults?
To stay in their current home AND make needed changes Modify physical structureTake in boardersTap equityUse tax deferrals
Etc.
To move to a more suitable placeBetter access to people
Or access to commercial center or transitLower monthly costBetter physical plantMore amenitiesMaintained by someone elseMCOA's 2017 Housing Issues Training Forum54
Slide55Tools for Supporting Decision Making
A list of options in the AreasCostsAmenitiesWaiting listsTransit nearbySample Work Plan
How to downsizeManageable steps
What else?
MCOA's 2017 Housing Issues Training Forum55
Slide56By Harold Pollack and Helaine
Olen, The Index Card (2013)
Slide57We can help
older adults improve their financial and social well being
1. Integrate housing education and counseling into your work
2. Share these tools
3. Build strong relationships with your local property tax assessors, tax collectors and regional housing counseling agencies to offer public education and counseling.
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Slide58In closing…
Thank you for attending today!Please use and share these tools with older adults. The MCOA Housing Guide and editable consumer fact sheets are available via
www.mcoaonline.com.
Please give MCOA suggestions and feedback on the Housing Issues Manual, for the next revision due out in 2018.
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