Too Poor for Hot Housing Market, To Affluent for . . .

I didn't put this in the Poverty forum or in the DC, VA, or MD groups because I think it speaks to larger issues about the insanity of housing prices, the destruction of the middle class in this country, and the perspectives of people who are backed into a corner. Also, this is an issue near and dear to me: I'm living it. In all probability, my husband and I will leave the area within the next two years in order to be able to buy a single family home, where I could have a vegetable garden and where our dogs could freely play, without facing a 90-minute commute or more. Even rentals are above the reach of many: A study last year showed that a single middle-class person making $35,000/year (such as police officers or lower-level professional workers) would have to live about 25 miles away from the city center to find a 1BR apartment they could afford.

This is an issue to keep your eyes on.

For half a decade, Gwendolyn Halford, a 48-year-old librarian for a federal agency, has searched several Washington suburbs for a home to buy. With an annual salary of about $60,000, she is too well-off to qualify for most affordable housing programs, but she lacks the means to purchase something she likes on the open market.

So she remains a renter, frustrated by the actions of elected officials. "You are allowing developers to come in to build condo units and homes at prices that a large percentage of the population can't afford," she said. "So what is going on here?"

Across the region, government leaders have heard some version of that question. They are scrambling to provide "workforce housing" -- price-controlled homes for families with high five- and even six-figure incomes.

The Montgomery County Council is considering a bill that would require developers of sites near Metro stations to expand their projects by about 8 percent to add workforce units at below-market prices. A family of four with a salary of $90,000, under one scenario, would pay $300,000 for a townhouse. The median price for a new townhouse in Montgomery during the first quarter of this year was nearly $460,000.

http://www.washingtonpost.com/wp-dyn/content/article/2005/11/30/AR2005113002248.html

And if the gov takes away our tax deduction for mortgage interest, I'm going back to being a renter! At that point, I expect home prices to stagnate anyway and real estate will cease to be a good investment for average Americans. Only the corporations who will wind up owning all the real estate will profit.

I wouldn't be surprised if that's the goal of TPTB.

?

Shocking!




I agree, totally.

Is a de facto tax against renters. They don't receive the benefit of it, yet those who are wealthy enough to have a mortgage on a house do. It also doesn't really make housing more affordable: it merely inflates the price of housing, again, benefitting those who who 'have' at the expense of those whe 'have not'.

There IS however, a potential to pinch people who are already stuck in a mortgage on a house with the inflated price. Therefore, while I am against the mortgage interest deduction, I feel that it should be repealed in phases: Immediately, it should be limited to ONE house, and limited to 1.5 times today's average home value in an area (or $1M, whichever is lower). Every year thereafter, the home value should be reduced by 1/20th, until 20 years from now it is gone.

So, if you had 20 years to pay on a $525K loan (DC area), you'd never notice the difference.

the way old america was.

the better-off living in town, the not-so-well-off, living on the outskirts.

these re-developed downtowns, with their new multi-million dollar aquariums, museums, condos, sports multi-plexes/shopping mall combos... these aren't for the worker ants.

by the the time dubya and his corporate friends are finished, most of us will be back in the woods, destitute and on our own, hunting for our squirrel dinners.

...or we launch massive voter registration drives and throw out those crooked black box voting machines.

I've lived in the city, and I rejected that for living in the country. Yes, my commute is twenty-six miles, but given that I ride a motorcycle that gets 100mpg, I really don't have to worry about gas all that much.

Frankly the older I've gotten, the less I can stand urban life. Yes, it has restraunts, cultural attractions, etc. etc., but that only makes it good to visit. Living in a city also entails putting up with smog and pollution, an atmosphere that quite frankly smells, along with noise, and living virutally on top of one another. In addition there are ever increasing restrictions within a city about what one can and cannot do with one's own property. Not to mention rising utilities and taxes. No thanks, I'll stick with my twenty acres out in the hinterland.

But I do understand this problem of housing, and quite frankly I don't understand how you folks can live with it. It seems that the pay-scale in most coastal urban areas isn't much greater than what it is here in the midwest, but your cost of living is exhorbitant. If I were in the position that some of you people are, I would be moving also.

Tell you what, why don't all of you folks displaced by the high cost of living move out here to Mid Missouri. We've got a great little liberal city, with plenty of cultural attractions. In addition, you will be mere minutes from the beauty of nature, from forests to lakes to caves. And besides, you'll be helping a red state turn back to blue.

but not everyone likes being so far from "the big city".

and i'll admit i'm spoiled by all the 24/7 hi-tech, restaurant, shopping, and entertainment conveniences.

but if i did move to the country, i'd want it to be a voluntary move, not something i'm forced to do because i could no longer afford basic urban housing.

i already hate some of the choices corporate america (the "free" market) forces me to make.

however, your offer to move might sound better if i didn't have family members who loved the city even more than i do.
:)

Some people like the fast pace of the city, frankly I've gotten worn out by it. Now I enjoy the best of both worlds really. If I want to visit the city to go out, I don't live prohibitively far away. But every night I come home to the country, where it is clean and quiet, and I don't hear a thing except for the sounds of nature.

But I listen to people from the coasts going on about housing prices and I'm just floored. Hundreds of thousands of dollars for a 900 sq ft house? Hell, I sold my starter house(aprox 900 sq ft) in the Columbia for fifty thousand and marveled at how high prices had gone. I bought my current acreage, complete with three outbuildings and a 2400 sq ft house for less than $150,000. I just don't see how you folks can afford to live out there:shrug:

But I hope you find a good solution soon, otherwise it sounds like the city life will bankrupt you. Good luck.

Not in NYC, they didn't. In the old days, your wealth was measured by how far away from the Five Points you could afford to live. The higher the street number, the greater the prestige.

It's really cool because they can live in a nice loft and not have to drive 50 miles to and from work. That doesn't solve the mortgage problem, but they can at least save some money.

I wish Seattle would do that.

One interesting thing is that some have framed the issue in terms of homeland security: If all your first responders are living two counties and a two-hour commute away, how are they going to get to work in case of an emergency? And vice versa, if something were to happen in downtown DC, you're going to have a lot of panicked people who need to get to Frederick and Front Royal. I was here on 9-11; I remember coworkers living on the fringes of the area trying to figure out how they were going to get home, between the traffic jams, closed roads and bridges, and the shut down of commuter trains coming out of the city.

It freaked me out when I realized that broadcasting "essential personnel only-- everyone else stay home" was not a good idea-- for national security reasons.

Idiots!

I was offered a job in Washington DC that would have been a great stepping stone to other careers, but the pay (it was a govt job) was really low. I remember doing research and talking to a friend of mine and she told me that I would have to live with a group of people or far outside the area...

I didn't take that job because I just couldn't make it work and did not want to end up eating gruel every night...

I couldn't even afford the rent on my regular apartment and had to move in someone's basement.

5 years later I had a salary of about $55k/yr and bought a $200k house.

7 years later I sold that $200k house for $510k (even I admit that's a sick return but they bid up our house)

2 years later I live in the suburbs of a smaller southern city in a house twice as big that cost half as much.

Just saying, it's all about decisions... You could have done quite a lot in DC in 15 years.

some breathing room financially...I have done well since...

I just wanted to point out that you "could've" probably swung it...

However, if you're like me... you wouldn't change a thing about any decision you've made thus far. (Well, maybe a few exes, but now that I have met my husband I shudder to think of what would have been had I not taken that tragically low paying job in DC in 1992...)

So many great library jobs there... but who the heck can even afford to rent? Not on a 33k library job,m that's for damned sure...

I never realized. I'm an instructional librarian at one of the med schools in DC.

And you're damn right, although depending on where you are, you'll do somewhat better than $33K. (Of course, the modus operandi here these days is to either split librarian positions into part-time positions, at the university level to offer an August-May temp position with no bennies, or to downgrade a position to paraprofessional status even though the duties don't change. So, you're still fucked) My husband and I both work for universities (before that, he was in nonprofits) and after a year of cramming into a 1BR condo (which he was able to buy before the boom using a small inheritance), we've realized that we'll have to leave to buy a house.

But, we're increasingly tired of the lifestyle here, so it's not such a bad deal. (His last job was of the sort where you were supposed to be glad to work 80 hours a week for $30K/year, because you could have the name of this notable think tank on your resume.)

Overtime they are really the only ones that can afford to benefit from it due to the massive costs involved in it. Sure, a lucky and shrewd person can occasionally make a killing in real estate without much money at first, but only by taking enormous risk. It has always been a method of dividing the classes and this real estate boom has proven it.

If you live in the DC area and don't already own a home, you've missed the boat, like me.

The solution isn't more public money for housing, nor is it picking and choosing which professions get a subsidy (the Cops and Teachers thing also applies in DC, I believe it's a federal program).

The solution is letting / encouraging builders to build more housing units. Simple supply and demand. There is a fixed amount of land in DC, but quite a bit more room for building up. It's doubtful that much of the new construction would be affordable to single shmos like me, but it is likely then thay yesterday's unaffordable condos would become affordable.

The key here is to shift the property tax from buildings to unimproved land value. Less tax on building = more buildings. More tax on land = don't hold your land idle or underused: e.g. used car lots, surface parking lots, big parking lots around big box stores. In every case where a jurisdiction has implemented a split rate property tax, homeownership has increased, and housing units have increased.

More buildings = more construction jobs, more retail jobs, more office jobs, more security jobs, more janitorial jobs, more jobs in general.

Nicely, taxes on land values capture the value of public investment. The Columbia Heights metro station created far more real estate land value than it cost to construct. The positive influence on development would 'naturally' support transit oriented development around DC's metro system, and would recapture the cost of placing the 3 tramways DC has in the plans.

New Colonist article on affordable housing and the land value tax.

I've contacted the members of the council regarding a split-rate property tax, 1 or 2 responded positively, the others didn't respond, but then I don't live here.