2.1. Some Statistics and Demographic Projections
The EU Member States are now planning to improve the housing structure parallel to shifting LTC from institutional to home care (see details in the
Recommendations on the National Reform Programme for Slovenia and the opinion of the Council of the European Union on the Stability Programme of Slovenia for the period 2012–2016 in [
42]).
However, the activities are too slow in all EU Member States. Reaching deinstitutionalisation will not be enough to retain older citizens in the previous home environment. It also requires the development of integrated community care and the adaptation of homes through the construction of universal housing in lifetime neighbourhoods that can accommodate older adults, or replace these homes with more appropriate homes. The housing market and the legislation, especially the legislative and executive branches, must respond to this challenge. Many national acts in the developed world define and enact at least four accessibility features to be included in new homes and which significantly impact accessibility for people with declining functional abilities and, consequently, the wider community.
According to the Memorandum of Understanding [
43], the right home environment is adaptable to heat, safe, accessible for older adults and visitors, and residents have access to support services and the help of others in general.
The comparative table (
Table 1), derived from the Aging report data [
44], shows that Croatia has the highest proportion of its population in need of assistance, at almost 10%. Spain has the lowest share of people needing assistance, at 4.3%. The difference may also be due to how people eligible for assistance are recorded and other factors (such as the effects of war and the associated higher number of war invalids in Croatia). On the other hand, Croatia has a relatively low percentage of people living in institutional care (0.8%) and the lowest percentage of people receiving state-subsidised home care (only 0.4%). In comparison, only 2.7% receive cash benefits. This means that only 3.9% of persons in Croatia, or approximately 40% of all EU citizens in need of assistance, are provided with long-term care, at least in some form. On the other hand, in the Netherlands, where 6.5% of the total population is dependent on assistance, everyone in need receives at least some form of long-term care (23% of all those in need receive institutional care, 81% receive home care and 7% receive cash benefits). The same is true for Italy (where 17% of those in need of assistance receive institutional care, 21% home care and 59% receive cash benefits) and Austria (9% of those in need receive institutional care, 11% home care and 78% cash benefits). A high proportion of those in need, 83%, receive some form of long-term care in the Czech Republic (17% of those in need benefit from institutional care, 15% from home care and 51% from cash benefits). In Finland, however, those in need of care receive several types of long-term care in more than 50% of cases (7% are in institutional care, 50% receive home care and 71% cash benefits). Long-term demographic projections point to a marked trend of ageing of the European population in the coming decades. As a result, the EU’s total population is projected to decline in the long term, and the population’s age structure is set to change significantly in the coming decades. According to Eurostat, the total population will decrease by 5% (424 million) between 2019 (447 million) and 2070. The working-age population (20–64 years) will decline even more sharply, from 265 million in 2019 to 217 million in 2070, driven by fertility, life expectancy and migration dynamics. According to Eurostat demographic projections, life expectancy at birth in the EU is projected to increase by 7.4 years for males and 6.1 years for females, with the most significant increases in the Member States that currently have the lowest life expectancy.
Figure 2 shows the growth index of people dependent on assistance. It shows that the EU Member States will experience different dynamics in the growth of the aid-dependent population. For example, the highest increase in the aid-dependent population will be in Spain (53% in 2060 compared to the base year of 2019 and falling to 47% in 2070), followed by Austria (32% growth in 2060) and the Netherlands (32% growth in 2060) and Italy (29% growth in 2060). On the other hand, Croatia expects to have the lowest growth index of its assistance-dependent population (100), and falling after 2060. It is obvious that these dynamics will stabilize after 2060. Due to the various dynamics of the population’s growth dependency on help from others, different countries will have different needs for developing a social infrastructure for long-term care.
Figure 3,
Figure 4 and
Figure 5 show the growth projections for recipients of institutional care, home care and cash benefits, considering existing legislation.
2.2. The Decline of Functional Capacities and Value of Housing Stock for Older Adults
For older adults who face physical and cognitive functional decline, choosing between staying in the current family home and moving to a retirement community with more accommodative housing units is demanding. Evaluation of the SV of such movements involves a new research method, data collection and the analysis of previously collected and tabulated data by other sources for other purposes, such as data collected from government agencies and publicly available data by third parties.
Figure 6 illustrates a trajectory of functional capacity. There are thresholds when an older person needs the help of others and such needs can be characterised by the Care Dependency Scale [
19], while the costs of such services are measurable. However, these costs can be influenced by housing characteristics, which could broadly expand the area of the functional capacity of individuals. People sooner or later reach the disability threshold (DT) when they need to find a more suitable living environment or intensive care. This moment is associated with higher costs of services and housing provisions. Hwang et al. [
44] found a positive relationship between home improvements and ageing-in-place. Their results underscore the importance of the accommodative environment to prolong living in the community and postpone relocating to a nursing home.
In
Figure 6, P is the highest point of functional capabilities at age XP of a person, while R is the point of retirement at age XR. If older adults live in an unadopted environment EH, high risks from the built environment, such as fall, are present after age X1. The risk decreases if the senior moves to a more accommodative housing unit in sheltered housing: if he moves at 72 to an SH (see A), his exposure to risk decrease. He may stay at an SH without care. Due to the accommodative environment and access to services in Housing with Care (HwC), the older adult postpones relocation to a nursing home (NH). The older adult reaches the disability threshold (DT is A in case of unadopted or B in case of adapted home) when living in his dwelling is no longer safe for him. If the older adult has the option to move to a more accommodative housing unit in sheltered housing (SH) or HwC that provides a safe living space, the relocation to NH can be postponed for X5-X2 years in cases in which there is no option for HwC or X5-X4 years in cases in which in this region HwC is also an available option. The trajectory of functional capacities can be measured by the Care Dependency Scale, while disability thresholds depend on the built environment’s barriers. With a more accommodative built environment, housing and public spaces, the disability threshold moves downward. A, B, D, E are the disability thresholds for the basic trajectory of functional capacities and C is the disability threshold in cases in which different activities during old age improve the trajectory (for example rehabilitation and other physical activities). In case of improving the trajectory of functional capacities and in case SH and HwC are also available options, the person moves to NH X5-X3 years later.
In the coming decades, in Europe, at least one-fifth of the houses and apartments will have to be converted into barrier-free homes, friendlier to older adults and more suited to their needs; otherwise, the costs of care for older adults will increase significantly [
25]. This transformation will require significant financial resources. Given the functional capacities of individuals and their other priorities, it is expected that the adaptation of their current homes, reconstruction and relocation of housing will take place in two directions:
(a) separation of older adults into different types of retirement communities (retirement villages, assisted-living facilities, continuous care retirement communities, sheltered housing, housing with care), which can be expected primarily in their old age [
45],
(b) the adaptation of homes, construction of universal apartments and accompanying facilities in their neighbourhoods, close to their current home, that will be suitable for all generations, even for those with fewer mobility and special needs typical of older people [
46], following the trends in many cities and smaller towns.
There will be a need for more considerable financial resources to which older people will contribute, and the society should be organised so that investment in an age-friendly environment and community-assisted-living facilities will be financially achievable for the community. To achieve these goals, it is not enough to improve the institutions of the social and health sectors. We also need to adjust the built environment and financial services, including the property tax of local communities and the state social infrastructure, to fulfil the growing needs of older adults.
With the rapidly growing older proportion, the development of built environments should follow guidelines set by the UN Standard Rules for the Equalisation of Disabled Persons [
37]. They recommend the design of buildings in renovations and new constructions that would enable the best integration of older adults and thus offer them equal opportunities to live in the community. The UN guidelines require the following from city planners and developers:
(a) construction and installation of facilities or devices that can be equally well-used by those with reduced mobility,
(b) flexibility in use,
(c) easy to use, and understandable for older people with less experience of new technological advancements and with linguistic constraints or lower education, knowledge or concentration,
(d) quickly recognisable accompanying information for orientation in the room and for handling devices, also for those with poor vision or hearing,
(e) less exposure to the risk of an accident,
(f) efficient use of facilities,
(g) appropriate dimensions of the space for access to facilities regardless of user mobility.
These requirements are also supplemented with detailed instructions on achieving the stated objectives. They are in favor of that part of the population with reduced mobility. Thus, providing a built environment and facilities in cities and settlements of an urban character that satisfies the needs of all residents requires substantial financial resources. Some, of these funds will also need to be collected through compensation for using urban land or real estate taxes, and some older adults with low incomes will also need to contribute.
Retirement villages, scarce solutions in Europe, have been at the centre of our investigation. The construction of retirement villages significantly contributes to Australia’s and Florida’s economies, with stable growth over the past decades [
47]. In Australia in 2013, there were over 2000 retirement villages, accommodating more than 177,000 seniors. Living in such arrangements contributed to government HC and aged care savings estimated at over
$2.16 billion annually. Residents of retirement communities enter institutional LTC later, have less frequent and shorter hospital stays and have better social wellbeing [
48,
49]. Such a housing stock arrangement also reduces the cost of publicly funded HC services [
50]. According to [
51,
52,
53,
54], the value derived from sheltered housing is recognised as beneficial to the individual, community and taxpayers. The older adults living in dwellings adopted to seniors were found to have higher perceived autonomy, a sense of security and good quality of life. Researchers [
51,
52,
53,
54] have advised that sheltered housing should be integral to LTC policy.
The Supported Housing Review [
55] acknowledges how broader benefits from supported housing which accrue to other agencies (for example, National Health System) are evident; therefore, a holistic ‘whole system’ approach to determining value for money is an unsolved challenge. Sheltered and extra care housing can deliver:
(a) individual flats and facilities that are accessible for people with mobility problems and easily adaptable to meet changing needs,
(b) accommodation is economical regarding heating and is of an appropriate and manageable size.
Proper sheltered housing design provides a building that is the foundation on which care and support services can be cost-effectively and efficiently delivered to meet individuals’ needs as they age. While schemes vary significantly in size, scale and facilities, there are some common areas where these schemes offer added value:
(a) provide better safety and security for vulnerable seniors,
(b) support and independence,
(c) better individual physical as well as mental health,
(d) maintain and develop links with the community,
(e) increase the income of seniors and reduce poverty,
(f) facilitate downsizing to more suitable housing (freeing up larger homes),
(g) delay admission to a nursing home,
(h) reduce the frequency of hospital admissions,
(i) enable care setting after discharge from the hospital and lower incidence of re-admissions to a hospital,
(j) allow rapid recovery from periods of ill-health or planned admissions,
(k) lower care costs.
The provision of dwellings for the decreasing functional capacities of older adults could be stepwise. Therefore, we can determine the needed housing stock structure based on the multiple decrement model as developed by [
56] On this skeleton, the SV of sheltered housing as reduction of LTC expenditures paid by the Health Insurance Institute of Slovenia can be modelled and evaluated using the principles of actuarial mathematics [
57].
2.3. Survey os the Housing Needs of Very Old Adults in Slovenia
A survey was conducted among 198 recipients of LTC, out of whom 100 recipients were from home care (mostly not adapted housing) and 98 from nursing homes in four Slovenian municipalities. The caregivers administered the questionnaire under the guidance of responsible researchers [
58]. Even though in 2018 the average pension income in Slovenia was 620 EUR per month, pension benefits of some groups of retirees, such as farmers, were lower than 300 EUR per month; therefore, they could not pay the rent for specialised housing. Among home care users, the preferential dwellings and services were as follows: 44% of seniors would have liked to stay in their old homes in any case; 40% of older adults wanted to live autonomously in ambient assisted arrangements; 13% of them insisted on living autonomously in any case till the end of their life and only 1.6% respondents were willing to spend the last hours of life in a nursing home. Based on these results, one can conclude that more than 40% of Slovenian older adults expect their municipalities will commence development of specialized housing as part of social housing. The social housing in Slovenia is now very poorly developed in comparison with Austria, France, Netherlands or Scandinavian countries. This makes movement between homes more difficult. Older adults are ready to pay the rent or buy such units without expecting social subventions. However, we can assume that, if the rent for ambient assisted arrangements (AAL arrangements) of housing units was financially affordable (publicly subsidised) to older adults with low pension benefits, the percentage would be even higher. The awareness that rent in specialised housing is financially unaffordable for older adults with low incomes has led many to decide that they will stay in the existing home, despite barriers in its environment and the greater danger of falling or other forms of accidents.
Table 2 shows that a relatively large proportion of older adults with low pension benefits (up to 500 € per month) want to stay in their current family home in any case. From their response, it was understood that, in many cases, the answers are influenced by the awareness that the pension they receive is too low to consider anything other than staying in their existing homes or going into institutional care in a nursing home. They are mostly owners (at least partly) of their homes, but in Central Europe reverse mortgage products are not suitably developed, and the housing market in the countryside is not developed either. AAL housing was the preferred option among those with higher pension incomes. Even today, in some EU member states a large share of these older adults lives in public housing owned by the state or local government (see
Figure 7).
Social housing rental stock as % of total housing stock in 2020 in EU varies a lot. It is presented in
Figure 8.
From the table, one can prove the hypothesis that older adults in the income classes of 800+ (n
2 = 13), who can afford rent and care in specialised housing, want to stay in their family home in a smaller proportion to that of seniors with lower pension income (n
1 = 32). This finding opposes the claim of the Eurobarometer [
1] that 90% of older adults want to stay at home, which is the base for European directives on deinstitutionalisation. Because of the small sample, the test was performed using the Agresti-Caffo method [
59]. We have calculated the probability with a z + 4-test to compare two proportions. From
Table 2, the statistics are as follows, where modified percentages p′ = p + 1 and q′ = q + 1 in Agresti-Caffo formula give:
Therefore, with the p-value = 0.05, we can confirm the hypothesis that Slovenian very old people in the income classes of 800+, who are better able to afford care in the AAL, want to stay in their current home in a smaller proportion to that of those in the lowest income brackets (up to 500 €).
Based on these conclusions, we suggest evaluating how many homes in AAL housing and similar community buildings should be constructed, on bases of [
60,
61,
62], considering also [
63]. Therefore, we recommend developing models, supporting decisions on optimal social programmes and financing policies and insurance schemes (social housing and reverse mortgage products) for older adults to enable them to move into AAL housing and other community dwellings. These dwellings would be adapted for older adults. There they could remain autonomous for longer, be less dependent, and it would cost them less in terms of HC systems. Under these assumptions we will develop the model in
Section 3. This is a new challenge for municipality administration and construction industry. Therefore, it is worthwhile to consider a strategy and other measures to better meet the ageing population’s needs.
Demand for AAL and other specialised housing for seniors with declined functional capacities could be calculated using the multiple decrement model for social housing. Financial products for fulfilling this demand will be developed. Therefore, we can determine the needed housing stock structure based on the multiple decrements approaches that Bogataj et al. [
56] developed using actuarial mathematics principles [
57].