I didn't think you could claim the foreign housing exclusion/deduction for rents when a retiree, as it is based on earned or employment income.
See here from IRS http://www.irs.gov/Individuals/Inter...n-or-Deduction
"The housing exclusion applies only to amounts considered paid for with employer-provided amounts, which includes any amounts paid to you or paid or incurred on your behalf by your employer that are taxable foreign earned income to you for the year (without regard to the foreign earned income exclusion). The housing deduction applies only to amounts paid for with self-employment earnings."
As I've said in some other threads, living abroad as a retiree and keeping the blue passport = financial suicide. No foreign earned income exclusion for sure, and pensions and SS are taxable income without being excludable.