In response to the economic turmoil caused by the Coronavirus, New Jersey may cut funding to property tax relief programs that protect homeowners on fixed incomes from sharp housing-cost increases they can’t afford.
The loss of property tax reimbursements is just one potential blow to efforts to ensure low- and moderate-income older adults can afford to keep living independently in their own homes and apartments during this crisis. With federal and state renter protections potentially expiring, there are growing worries about widespread evictions in coming months.
Funding for both The Homestead Benefit Program and The Property Tax Reimbursement Program, more commonly known as the “Senior Freeze,” was left out of the three-month stopgap state budget enacted in June.
That money may not be restored in the budget adopted Oct. 1, and many advocacy groups are advising older adults to share their views with their elected state officials before budget talks resume in September.
Homeowners who qualify for Senior Freeze are also being advised to complete their applications for the benefit this year – regardless of whether this year’s funds are restored – in order to keep from paying proportionately higher increases in future years.
Applying before a Nov. 2 deadline will ensure that homeowners’ taxes remain frozen at the “base-level,” which is defined as the first year they applied. If and when the program is reinstated, later years’ reimbursements from the state would be calculated by the difference between the base tax year and the current application year.
Together, the Senior Freeze and Homestead programs can reduce the property tax bill by thousands of dollars a year for income-eligible homeowners over 65 and those with disabilities, depending on how long ago they applied.
Even in good economic times, low- and even moderate-income homeowners struggle with New Jersey’s highest-in-the-nation property taxes. An estimated 40 percent of elder homeowners remain “economically insecure” even after the mortgage is paid, according to New Jersey Division of Aging Services’ Living Below the Line report.
Even if they wanted to, many of those homeowners don’t have the option to sell their homes and use the proceeds to live more affordably in an apartment. That’s because New Jersey’s rental market is also the 7th most expensive in the nation, according to Out of Reach 2020, a report co-sponsored by the Housing and Community Development Network of New Jersey, which has been sounding the alarm that the pandemic could further raise the state’s incidences of homelessness and housing insecurity for people of all ages.
That report, just released this month, raises concerns that many renters who already pay a third to half of their income on housing are at risk if evictions are allowed to move forward and additional relief funds aren’t included in the next round of Coronavirus economic relief measures.
Likewise, without this essential property tax relief, many older and disabled homeowners might have to move from their homes and communities, losing meaningful social ties and needed support systems. Others may skimp on health insurance, food, or medications, compromising their health and increasing the likelihood that they will need long-term-care that could cost the state far more than these two programs.
Our age-friendly alliance works to demonstrate why remaining in one’s own home is by far the preferred, and more affordable, option – both for older homeowners and for our budget-troubled state. Our network of 16 community projects in northern New Jersey also works to keep older adults informed about government services and policies that impact on their well-being and ability to age in place, so that they are empowered to advocate for themselves.
New Jersey is the most unaffordable state in the country for households headed by someone 65 or older, with nearly half paying more than 30 percent of income on housing costs, according to New Jersey Future’s Creating Places to Age report.
It’s also a state dominated by single-family homes, with few affordable apartments and condos for older adults to downsize into. That leaves many with only the choice of their own home or moving into a long-term-care setting, where they would likely exhaust their resources and the state’s Medicaid program would end up paying tens of thousands of dollars each year on their housing and care.
That’s why providing property tax relief to the state’s most vulnerable homeowners has long been viewed as a sound – and age-friendly – budgeting choice to make.