There are two major problems in housing today, both relate to cost. The first is that the cost of housing, especially in areas restricted to single family residences, is rapidly rising. The second is that the skyrocketing costs of nursing home care for the elderly means that more seniors are “aging in place” - the elderly remain in their largely single family residences far longer than they did in the past. These problems seem to be irreconcilable, since aging in place means even less available housing available, but that is deceptive. In fact, it may be that the solution is not to address one or the other, but take advantage of “the cure” for one to solve the other.

In a recent interview with National Real Estate Investor, Assistant Professor Sean Huang of Georgetown’s Department of Health Systems Administration, the author of a recent study on nursing home costs, noted that the rising cost of nursing homes have vastly outstripped the rate of inflation in states like New York (20%), Florida (29%) Vermont (29%), and California (30%). Since much of the long term care costs are covered by the government, through Medicaid, Dr. Huang expects that the government will try to control those costs by having elders stay in their homes, where the costs of service is lower than in a nursing home. In most cases, these homes are single family residences, located in areas with restrictive zoning.

Meanwhile, the Urban Institute found, in 2015, that there was a 460,000 unit supply gap between the demand for housing and the supply. Despite the rebound since the housing market crash in 2008, single family permits are 47% lower than they were pre-crash. The vacancy rates are the lowest in decades and the rent rates the highest. At least four solutions to this housing crisis have been proposed: 1) invest in old, unused buildings, including factories, government buildings and warehouses, 2) normalize tiny living solutions, especially in urban centers, 3) create tax incentives for employers to help out with housing and 4) remove restrictions on development of duplex housing in single family residential areas.

The removal of restrictions has already gone forward in cities like Minneapolis, MN and are championed by several of the 2020 Democratic Presidential Candidates. The new rules allow an owner of a single family residence to add or convert space to the home to create an “in-law” apartment, thereby doubling the housing units without having to have families living on top of each other.
So, how does this help the aging in place of our elderly? Simply by having the elderly renovate the space in their home to accommodate their restricted mobility, and then having a younger family move in to the remaining space with the arrangement that the family earns equity in the property by providing support to the elderly individuals.

There are many unanswered questions in such an arrangement, such as how the services are supervised, whether training is provided, what safeguards there are to avoid abuse, and so on. Also, it is uncertain where costs and the supply of housing will go with the recent proposals for Medicare for All and rent control of apartments. That said, this could be, on a case by case basis, an elegant solution to these two thorny problems.

Matthew Erskine is the managing partner of Erskine & Erskine LLC, a fourth generation law firm, and The Erskine Company, LLC, (www.ereksineco.com) a consulting firm (www.erskineco.com).  He focuses on strategic planning and legal services for business owners, professionals, individuals, families, collectors, and inheritors of unique assets. Helping his clients and their families solve their problems through customized estate, tax and management solutions. 

Matt has a particular expertise in the stewardship of unique assets that few other estate planning and trust attorneys or family offices can match.  Working with collectors of coins, fine art, jewelry, heirlooms, and other valuable assets, as well as owners of real estate and family businesses, Matt brings his and his family’s generations of experience and intimate knowledge of unique areas of the law to help clients achieve their desired investment and personal goals.  This includes strategic planning and execution on forming operating and non-operating foundations. 

The Erskine family has been counsel to client families since 1876, overseeing estate and income taxation planning, personal trusts, dynasty trusts, private foundations, and family offices.  Matt is also active in numerous community organizations in the Worcester, Massachusetts area, including the American Antiquarian Society, the Worcester Economics Club, and the John J. Kittredge Numismatic Foundation. 

After graduating from Lawrence Academy, Matt received his B.A. in Medieval History from Carleton College and his J.D. from Suffolk University Law School.