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Lack of Affordable Housing for Seniors in Chicago According to a New Harvard Study

A new Harvard University study highlights what many Chicago residents know all too well, there is a lack of affordable housing for seniors. While the lack of affordable housing for seniors is a nationwide crisis, the issue is particularly prevalent in Chicago. The study uses the term “cost-burdened” to describe those that pay more than 30% of their income on housing. The authors found that 37% of households aged 65 to 79 are cost-burdened, compared to 30.8 percent of senior households nationwide. That number rises even higher for Chicago households age 80 and over (43.9 percent).

To be sure the ratio of income to housing costs does not tell the full story of the housing crisis facing seniors. Seniors may, for instance, have substantial savings or assets to draw from to support monthly housing expenses.  According to the study, however, this is unfortunately not the case. A smaller number of seniors own homes than in the past. Moreover, those that do own homes are subject to far more mortgage debt than the past.

The lack of homeownership combined with rising mortgage obligations and insufficient income to meet housing costs has left seniors with little options. There is a lack of affordable rental properties in the Chicago area. This is due in part to rent control practices being illegal in Illinois. Even if rent control measures were eventually permitted, however, it could lead a growing number of landlords to seek an out – converting existing apartments to condos or selling to the current occupants. If that were to occur, the rental marketing would face further tightening as supply would decrease.

Thus, there are no easy solutions to the lack of affordable housing for seniors in Chicago. This is not to say, however, that seniors are left powerless. There are household level methods that can be implemented to reduce monthly obligations, giving seniors more disposable income to meet housing costs.

Debt Relief for Seniors

Debt relief for seniors options depends largely on individual financial circumstances. Factors such as monthly income, assets, existing debt obligations, and even age all play a role. For those seniors that lack a means to realistically increase income or liquidate assets, reducing debt obligations will likely be the best means to get some relief. This is best accomplished through:

  • Creating and adhering to a monthly budget
  • Prioritizing and paying off debts, focusing on accounts with higher interest rates first. For instance, if you have multiple credit card accounts, pay just the minimum payments on all but the account with the highest interest rate. By paying more on the account with the highest rate you will pay off the account quicker and save yourself substantial interest costs, as well as eliminate a monthly debt obligation
  • Consider consolidating unsecured debts. If you are unable to obtain conventional financing, consider asking a friend or family for some help. Consolidating your payments into one payment will likely significantly reduce your monthly payment and save you a lot of money in the long-term

If none of the above are realistic options for you then you may want to consider more aggressive debt relief options such as debt settlement or filing bankruptcy, which we cover in some more detail below. For those seniors that own homes or other assets, consider liquidating those assets to pay off debts and/or reduce your monthly obligations. Selling your home may be difficult if your home is currently “underwater”.

Options for Houses that are Underwater

A house is said to be underwater where the outstanding principal balance of all mortgages exceeds the fair market value of the home. In other words, if you were to sell the home you would need to bring cash to the closing to pay off the remaining balance of the mortgage(s). Seniors with homes that are underwater have less options than younger households. The reason being is that younger homeowners can pay down some or all of the balance over the course of their lifetimes. This option is simply not realistic for most seniors.

The reality in most cases is that the combined costs of your monthly mortgage payment, taxes, insurance and maintenance can be prohibitive. With a decreasing likelihood of ever tapping into your home’s equity, your best option may be to refinance or get rid of your home. With the recent expiration of the Federal HARP program, refinancing your home where you owe more than it is worth will likely not be a possibility. Options to sell your home where you are underwater include:

  • Selling your home and paying the difference with other funds at closing
  • Selling your home through a short sale
  • Letting the bank foreclose on your property
  • Filing for bankruptcy

Short Sale

A “short sale” occurs where your lender agrees to let you sell your home for less than you owe, forgiving the balance owed. Short sales can be an effective way to get rid of your home and avoiding the subsequent collection efforts of your lender were they to foreclose. There are some negatives to short sales, however. Your lender will have the ultimate say in whether to approve the sale. Thus, you may work hard to find a qualified buyer only to have the lender reject the offer at their discretion. To qualify for a short sale, you will need to demonstrate financial hardship to your bank. The application process can be confusing and lengthy. For this reason, you may want to consider working with an experienced Illinois real estate attorney to negotiate with the bank on your behalf. Some other negatives to a short sale can include potential tax liability for the debt that is forgiven and a negative impact to your credit history.


A foreclosure occurs where you have defaulted under the terms of your mortgage. The most common reason for default is failing to make your monthly payments. After you have failed to make payments for a period of time, the bank will initiate foreclosure proceedings. In the event your home is sold, the bank will have the right to pursue a judgment against you for the deficiency. A foreclosure, as well as a history of missed payments, can be disastrous for your credit. If you are facing foreclosure proceedings in Illinois, contact an experienced foreclosure defense attorney to discuss your options.


For many seniors, the best debt relief option may very well be bankruptcy. In fact, the rates of bankruptcy filings among older Americans have been increasing substantially in recent years. The advantage that bankruptcy has over some of the other options discussed above (in connection with disposing your home) is that bankruptcy allows you to address all your debts. Thus, if you have credit card debt, medical bills, or even taxes bankruptcy can help to give you a fresh start.

Bankruptcy eligibility depends largely on an individual’s financial circumstances. Debtors with significant income or assets may not quality for a liquidation under Chapter 7 and may have to make monthly payments under a Chapter 13 plan. However, even where you have assets, Illinois bankruptcy law allows you to claim certain assets as exempt. What this means is that these assets cannot be sold by the trustee appointed in your case. For instance, some important exemptions under Illinois law include:

  • A homestead exemption which allows you to exempt up to $15,000 of equity in your home
  • A motor vehicle exemption which allows you to exempt up to $2,400 in one vehicle
  • A “wild card” exemption which allows you to exempt up to $4,000 worth of personal property
  • Public benefits such as Veterans’ and Social Security benefits are also exempt

For more information about exemptions under Illinois law and bankruptcy options, contact an experienced Illinois bankruptcy attorney.

The lack of affordable housing for seniors in Chicago is concerning. While there does not seem to be a quick fix to the growing crisis, there are some options for debt relief for seniors that can help you to regain control of your finances. For more information on debt relief for seniors contact an experienced Illinois debt relief attorney today.  

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