Policy Measures for Increasing the Supply of Elderly Housing: Incentives for Private Industry

摘要

Six indirect policies for encouraging private providers of housing for the elderly are examined. These policies include tax incentives and deregulation. Family provider tax credits would provide tax breaks to the family members to encourage them to house elderly relatives. Evidence suggests that financial considerations are very important in the decision to bring elderly relatives into the home, and that a tax credit would address a real financial need. The size of the credit is likely to be the key to successful implementation. Property tax abatements for elderly homeowners encourage the elderly to stay in their homes. But they vary according to jurisdiction, raising questions about equity. Because of poor design and cumbersome administrative procedures, not all eligible elderly benefit. Simplification of these programs would be beneficial. More information would help determine exactly how beneficial the capital gains tax exclusion has been and would help determine what modifications would be necessary.