Social Bonds, Impact Investment Funds, Partnerships Can Ease Lgbtq+ Senior Housing Affordability Crisis

Senior living is already a service that is out of reach for millions of older adults in the U.S. For gay and trans older adults, that is especially true.

A new report from the Milken Institute and LGBTQ+ advocacy organization SAGE sought to highlight and explore the funding challenges maintaining that status quo. The report included responses and insights from 40 interviews with “key stakeholders and subject-matter experts across sectors, including academia, financial services, government, health care, sustainability, nonprofit, and philanthropy.”

Included in the report were five potential ways to sustainably finance and advance affordable and inclusive senior housing options for LGBTQ+ older adults.

According to a 2024 Gallup survey, nearly 14 million American adults identify as LGBTQ+. Of those, 1.1 million were 65 and older. Forty percent of gay and trans older adults live below the federal poverty line, defined as making an annual income of $15,560 annual income for a single person. On average, just under half (49%) of all LGBTQ+ older adults own their own homes, which is significantly lower than the national average of 65% homeownership for all older adults.

LGBTQ+ older adults also face challenges stemming from systemic barriers, including lifelong employment discrimination, general lack of familial support and reduced access to financial tools – “all of which contribute to lower homeownership rates and wealth accumulation,” the report’s authors noted. And that is not to mention the risk of social isolation and discrimination in senior housing settings.

Although there is a great need for senior housing that caters to gay and trans older adults, the demographic is still vastly underserved, with only about 1,500 LGBTQ+-affirming and affordable senior housing units across 20 states, and a mere 37 developments in various stages of planning or operation.

“Existing affordable and affirming developments already struggle to fill their income-restricted units because they are still too expensive for LGBTQ+ older adults, many of whom fall below current area median income guidelines,” the report’s authors noted.

To help solve that shortfall, the report’s authors also suggested five solutions to help expand affordable and inclusive housing for older adults:

• Social bonds funding LGBTQ+-affirming and affordable senior housing programs and/or services
• Impact investment funds to create LGBTQ+-affirming and affordable senior housing
• Pay-for-performance models to fund LGBTQ+-affirming programming, workforce training, and inclusive design improvements
• LGBTQ+ senior housing prizes rewarded to best-in-class developments 
• Financial-sector partnerships to incentivize LGBTQ+-affirming services integration for older adults

At the end of the day, the report’s authors believe that solving LGBTQ+ senior housing challenges will require “new, multi-sector solutions that transcend existing funding options.” Through social bonds, impact investment funds, pay-for-performance models, prize incentives and financial-sector partnerships, senior housing companies can “access new streams of capital that are both sustainable and effective,” the report’s authors wrote.

“The models ensure that LOAs receive culturally competent services, stable housing, and long-term affordability,” they wrote. “They also align financial incentives with measurable social outcomes, making affirming and affordable housing more attractive to a wider pool of investors.”

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