Exorbitant Rent:The American Dream on hold, indefinitely?
Wanted to bounce a question or two on the hubpages forum. There is a sinister trend taking place, people with middle class incomes cannot find affordable places to rent. Thus, more are finding themselves homeless.
It has gone beyond the standard explanations provided by conservatives that victims are either indolent, mentally ill or are just experiencing a temporary patch of bad luck. They will also say, without any direct support, that Biden is responsible.
This is a new normal. My younger sister in Denver now makes the average salary for a single person yet cannot find a place to rent that won't take over 50 percent of her take home pay.
Capitalists say that we have to wait for the supply of available real estate to increase so that the increased demand can be satiated and sanity can return. Meanwhile, we all wait. Yet, Europeans come to American cities on holiday on wonder why there are so many people living on the street.
What is different now is that the exorbitant increases are not limited to just urban areas. There are only a handful of states, one being West Virginia that has shown resistance to this national trend. As a retiree, I always fell back on the idea that if things got to expensive in town, I would go rural. I can't rely on that, anymore.
There is this interesting piece from Leslie Stahl of 60 Minutes that puts much of it in a nutshell.
https://m.youtube.com/watch?v=ZEwxYvQVU5g
I am glad that I went with my wife's nesting instinct and bought here in Central Florida as I would have resisted and procrastinated based on my adage "that a rolling stone gathers no moss". We could have found ourselves in a trailer park, priced out of the market in the face of sharply rising rents in this area during the last 2 to 3 years if I had continued to delay.
THIS TIME, she was right and I am grateful.
https://discover.hubpages.com/relations … es-Attract
Your thoughts?I emphatically agree rent is getting out of hand as well as home prices, though in certain places it is a mystery if you know what I mean. I relate to it as you from a personal perspective. l care about the region I live and with my nephews and nieces it affects. BTW . . . the video was revealing.
For example living in San Diego county the average 1 bedroom apartment (876 sq.ft.) is $2,610. Of course that will vary where it is located. For instance the metro area of San Diego city vs. the adjacent metro cities vs. the cities in what we call North County or the east county. And, the median income for San Diego county is $63,739 / yr or $5,311 / Mth. So, avg. rent is 49% of income. But, remember that is net. Take home is about what 20% less? So, rent is about 61% of take home.
As to who it affects my niece now 24 lives with her parents still and most welcomed to do so. The reason as shared is the cost of rent. She is a teacher and average income of teacher just starting out is about $45,000. So, an apartment would be 70% of her net income and 87% of take home. Wow! Of course she could hurriedly marry and be rescued.
Building affordable homes and apartments is a central theme here in my county. You cannot build a new home tract without building affordable apartment/homes at the same time. As far as city/county sponsored affordable apartments the goal is to build them as close to public transit as possible.
As for me I have a very fixed income and own my mobile home. I live in Escondido in the North County. My space rent is about 25% of average apartment rent in my area last I checked a few years ago. But, in my city there are mobile home parks with space rent as much as 70% of the average apartment. The old rich area vs poor. Fortunately we have rent control for mobile home parks here in my city, but not apartments or homes. The bottom line is if some catastrophic event happens like the park sells to a developer I am homeless.Hello, TSmog
https://www.gobankingrates.com/money/ec … ery-state/
Check out the above link that show the average salary to be earned in each state to pay the average rent considering it as 30 percent of income.
And you know what? That chart falls short as it fails to take into account that most people have to deduct fed and state income taxes, and FICA. So what you are supposed to start with in your pocket is even less. I would be generous to say that this would amount to 20 percent of gross take home leaving you with 80 percent net. This is even worse than they present.
In San Diego you would have to earn somewhat over $100k a year to pay the average rent. That's crazy, that is not a salary that is typical of the American laborer at any point. My brother lives in the San Diego area, as one of those "cloud management people" (Computer Science) and earning 90k and single, still he is always bitchin' about the rents in the area. Now, I know why. Otherwise middle class people without family ties would be forced to live in their cars or even on the street.
So, even when you thought that you have "made it", you really haven't.
We only got off the hook, Tsmog, because for many years real estate in this area has been dirt cheap, until recently, the last 2 to 3 years. We managed to slip in through a rapidly closing window before it shut completely.
Is it turning out that only rich people can afford to buy houses or pay rent? That will take America back more than just a notch or two. i lament for family members and inlaws having to deal with this situation.My late mother stated over FOUR decades ago that there would be ONLY TWO classes in the future, the VERY RICH and the VERY POOR, no middle class at all. This has happened since the 1980s, it is the gentrification of society. Even solidly middle class people are being priced out. In order to survive even in the 1980s, one must be at the minimum UPPER MIDDLE CLASS. Rents started to become exorbitant in the 1980s. One bedroom & studio apartments were $980.00 a month! Yes, only rich people could afford decent apartments & housing- such is life!
This is why I have stated that the future will belong to the upper middle & upper classes. They are the ones who will profit & benefit greatly while the solidly middle class will struggle, forget about the lower middle, working, lower & underclasses who will become slaves or fodder. Those who are lower middle, working, & lower classes will be phased out. They will be marginalized in one way or another. Some will be imprisoned & others will be used as fodder for wars.So, looks like your prediction is coming true, are the resulting homeless going to sit idle by and not demand that something be done. At the rate we are going, there are going to be a lot more of them then there are of you?
Your example dealt with New York City, not the rest of the country.They can't demand anything. They are marginalized & powerless. Those w/wealth have power while those w/o wealth are powerless. This is reality. It pays to have wealth. People have to realize this & inculcate their children in such principles. Wealth is everything. Wealth is the most important thing in life. This is what occurs when people don't have wealth.
Numbers matter, and politicians can turn a deaf ear for only so long.
Money matters, not numbers. Those w/o power can be crushed i.e. imprisoned. They mean nothing. They aren't respected. If one has money, one has power and respect.
You are proposing a oligarchal despotism in place of democracy, we will see how long that goes?
It takes more numbers to overcome the money, another reason I cannot stand RepublicansEspecially when our politicians and our MSM work so hard to make us turn on one another each and every day.
CRT, BLM, LGTBQ, Trans allowed in Sports, all the issues given such prominence today are given that to help divide and distract Americans, not because those in power want to solve those issues.
What happened to all the BLM protests and focus on those issues once the election was over?
And take notice what happened to the Truckers in Canada and the Trump supporters, they were silenced, their assets frozen (stolen), etc. people are allowed to voice their opinions and take to the streets only so long as their actions and words benefit those who allow it.
Thanks for the link! I liked it also gave what the median income was so that one could see if it could be affordable for average Joe/Jane or them married. One must consider the average age to marry now is 27 for women and 29 for men. Remember the old rule of statistics there is always more below average than above. I see there in FL it is not as bad here where I live.
Another point is by 2030 1 in 4 San Diegans will be over 60.Today, 23% of 65+ cannot afford basic needs - housing, food, transportation, medicine, and etc. And, 35% live below 200% of poverty, which is about $2,600. Remember rent is $2,610 on average. About 27% of San Diego's homeless (about 1,000) are seniors at or above 55. So, we may be seeing that grow with as many senior complexes that are sold to developers who evict them and bulldoze the affordable units. Of course that is capitalism at play as the owners seek to retire by selling their investments in some cases.
Denver has a black Democrat Mayor Michael Hancock. You should ask him about the housing in Denver. He would be more aware of it than anybody. You should complain to people who have the power to change things.
So Mike, what does Denver having a Democratic black mayor have to do with it? Everybody knows that this a national problem, exacerbated by the market forces that conservatives always support and crave. In other words, the problem is bigger than just "city hall".
Perhaps, people living in the rest of the country's megalopolises, cities and towns should ask their mayors for a solutions? Dont you believe that it would be nice if it were all that easy?I simply suggested if you want rent prices to change, start with the mayor of the city. Start with the city council.
Yes, everybody in cities should start with their mayors and city councils. Simply complaining about it does nothing.
Seeking solutions is the key to resolving the issue.
He is a terrible mayor, but I don't know how a mayor can change the cost of housing. If anything, federal government or maybe the governor could have limited the number of houses a corporation could buy for rentals. But I don't even know if that would be legal.
Other than that, I don't know how a mayor can affect the cost of rent or house prices."Other than that, I don't know how a mayor can affect the cost of rent or house prices."
My point exactly, whether it be in Denver or anywhere else in America....It's a bad situation, all right. I have 3 grandchildren and 1 friend looking. Three of them have found housing, but it isn't cheap and it wasn't easy.
I don't know what the answer is, but it isn't making more section 8 recipients. In far too many of those "affordable home" cases it turns into (or already was) just another ghetto.
Perhaps we need more minimal housing - tiny houses might help. Public transportation out past, or at least to the far edge of the suburbs might help - certainly a part of the problem is people wanting to live downtown, where land is at a tremendous premium and drives rents up.
I don't have much to offer, I'm afraid. The experience of Seattle, where minimum wage was doubled in order that people could find housing only to find that rent went up just as fast as the wages did shows how fruitless it is to do that.It is a big problem , Wilderness.
What's bad about this problem at least in the Denver area is that the trend involve all areas within a reasonable commuting distance, there is probably not much relief until you reach the Kansas line. That may not be an exaggeration.
I have seen crazy ideas in Asia of sleeping spaces, like people size compartment, with public bathrooms and maybe a cafeteria. I heard that in areas where land is expensive, more people can be fit in less space. It probably would not translate well here and it could only practically work for singles.
A variety of factors have caused the issue.
People are fleeing states like CA & NY by the hundreds of thousands a year.
That is hundreds of thousands of people flooding to FL, TX, even Denver to be free from NY & CA taxation which are insane and impossible for Middle Class (Nurses, Carpenters, Mechanics, etc.) to afford.
2018
https://www.cnbc.com/2018/04/26/800000- … taxes.html
2022
https://nypost.com/2022/03/12/new-yorke … in-droves/
State by state, they have opened up investment into residential homes to foreign investments. Up until 2016 it was illegal for a foreigner (non- U.S. Citizen) to purchase residential property in Florida. In other words, Florida could not become Canada with homes being bought by Chinese investors sight unseen, driving up costs across that nation.
2018
https://wolfstreet.com/2018/06/07/how-c … -the-tide/
2016
https://www.pncrealestatenewsfeed.com/u … rs-in-201/
Because of the change to the law voted into effect in 2016, Florida is now the #1 destination of foreign investment. Slightly less than half of all foreign buyers purchased property in these three states Florida (22 percent), California (15 percent), Texas (10 percent) since that time.
And the newest reason, noted in that video link you gave, is because investment firms were given trillions of dollars to "prop up" the economy during 2020 and they in turn put those obscene amounts of money into things like REITs (Real Estate Investment Trusts) driving up the costs of residential properties as well as the rents.Thank you, Ken.
The difference in this issue of housing and rents, between NY-CA vs FL and TX for example is just a matter of degree. If you look at the link that speaks of minimum salary needs to rent the average rental unit in the relative state, you can see that the trend is nationwide and inspite of the fact that the Right wants to make an issue pointing to blue states as having the problem, they don't fare any better, really.This is a problem for FL and TX that has developed far more recently and is because of the very reasons I noted.
https://www.clickorlando.com/news/local … res-where/
In the last 10 years (and I would argue that it was mostly in the last 6) Florida's population has grown as much as 45% in some counties. Two major factors being the change in taxation policy which disallowed people to write off their state taxes making people flee NY and CA in droves and opening up FL to foreign ownership.
Orange County’s population -- home of Orlando -- increased 25%, while Brevard County’s population jump of 12% moved it to the No. 10 most populated county in the state.
It is the very politics and taxations of "blue states having the problem" that are impacting Florida and Texas driving up the costs of housing, purchase costs and rents.Ken, the problem regarding rising rents and housing issues are nationwide and has to go far beyond just the taxation issues of California and New York
Outside of Florida and Texas what is the explanation for the trends in Wyoming or South Dakota?As I said, it is a multifaceted problem.
Investment Firms that were given trillions to play with during 2020 created REITs and bought up housing across the nation.
The other links I gave explain the foreign investment aspect of it.
Inflation, the creation of 33% of all dollars in existence in 2020-2021 by default means that all prices are going to go up roughly 33%.
And of course states like TX and FL are being hit the hardest because they are the primary destination states for people fleeing CA and NY.
You’ve given me some food for thought!
Due to various Conservative Government Policies in the UK since the 1980s, Britain has developed a chronic shortage of housing, including social housing (affordable homes and council houses); and thus as like America, rented accommodation has become prohibitively high in Britain.
To be honest, I’m not sure how the middle class manage with such high rents in Britain because most people I know either own their own house, or are on benefits (Welfare State). Although, I doubt very much that the middle classes end up homeless, as homelessness isn’t such a stark issue in Britain than it is in the USA e.g. no ghettos in Britain; largely because affordable housing is partially alleviated in Britain due to local governments legal obligation to build sufficient ‘council houses’ to meet demand (a legal obligation which they struggle to keep since the ‘right to buy’ changes in the law introduced by Margret Thatcher (then Prime Minister) in the 1980s). Also, as Tim mentions above for what’s done in his county, in Britain local governments often make it conditional on planning consent that developers have to include affordable housing (social housing) as part of their build.
Certainly, high rents isn’t such an issue for the poor (unemployed and low paid) in Britain, in that if you are on benefits (Welfare State) because you’re unemployed or on low income and you rent property, then you’re also entitled to claim ‘housing benefit’ e.g. where your local government pays your rent for you.Arthur, I apologize for this terrible display of "dirty laundry" from our culture. It is the rank authoritarian and arrogant nature of such comments that pose a danger to us all during these times.
"Money matters, not numbers. Those w/o power can be crushed i.e. imprisoned. They mean nothing. They aren't respected. If one has money, one has power and respect."
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The idea of "ghettos" seem to be relative as well. On a visit to Toronto during the 1980s, I was told to avoid the "ghetto". When I went to see anyway, it was constituted of apartment houses, playgrounds with swing sets for the kids. Hardly the image that I would associate with what "ghetto" meant in America.
The idea of being "poor" in Canada did not include not having safe housing for everybody. I suspect that the same attitude prevails in the British Isles. I was impressed and saw this as a positive characteristic of most Western oriented nations calling themselves "civilized".
Interesting conversation on a real and present danger. Like Nathanville, I'm British and agree that spiraling house prices (rent or buy) are also a problem, not just in Britain, but in most parts of Europe.
At one time of day, we might have expected the left to focus on this issue but it seems not to be doing so. Has big issue politics disappeared as we focus on interest groups and those who shout the loudest?Stephen, while Europe is seeing the same trend, why does homelessness appear to not be an issue in your societies?
After the Rent moratorium of last year on account of the COVID, this capitalistic based society would have little patience for remedies such as rent control and such. Building more units so that supply can meet demand is the American way, but in meanwhile people will continue to suffer.
I also live in Denver, and the situation is actually dire for anyone wanting to rent a decent home or even an apartment. The average salary is hard to determine, it seems to vary depending on which website you look at. It appears to be around $35 per hour.
Depending on which part of town, a decent 3 bedroom/ 1 bath house can cost from $2,000 to $2,500. A problem is most landlords require three times rent in wages. Which equals $41.25 per hour for a house renting for $2,200.
And there are not many rental homes either. A studio apartment is around $1,300 per month. The average rent in Denver for a 1 bedroom apartment is now around $1,800/month.
The number of houses for sale is now at the lowest level it's ever been. And the median cost for a home is now around $590,000 or $352 per square foot.
One problem is too many people have moved here, that is a huge problem. And this started when Colorado legalized pot. Either a coincidence or a factor.
Like others have mentioned, corporations have been buying up many homes for sale to turn into rentals. We are becoming a country of corporate rentals. I have been reading though that companies like Zillow and others are starting to liquidate their home holdings. I think Zillow was more into buying to flip instead of rent.
But the Federal Reserve held rates so low for so long, the corporations practically have had free money to buy all these homes.
Mortgage rents last week almost hit 5%, and they haven't been over 5% since 2011. And rental prices are still soaring.
Rents have gone up well over 100% since about 2012. And home prices are also continuing to skyrocket. I read one news story the other day, that home prices in Denver climbed $80,000 in 30 days.
Some thing it is a housing bubble, and now with rising rates, this asset bubble will pop. I am thinking it is more of a supply and demand problem. And in cities like Denver, the supply is far too small for the demand.
Many people I know are quitting their jobs and leaving for other cities, because they cannot afford to live here any longer.
Pretty soon, the American Dream will be able to just rent a home.Hiya, Sam, its been a while. How have you been?
$35/per hour is a bit generous. Have a look at the link that I gave TSmog.
72K is well beyond the average salary even in Denver.
My sis earns 42K there and is completely priced out the market even considering subsidized rent programs for working seniors, which she qualifies for now.
I think about the house in Park Hill that my father bought in 1964 for 15K. The house was built in the 1950s. Now that house is priced at well over $500K. This is definitely a national crisis and Denver has been hit hard.
It may not do any good to move away, as even the more rural locations are seeing much of the same trend. There may not be escape in either Colorado Spring, Pueblo or even towns on the Western Slope.
There needs to be a fever pitch for building more housing, affordable. I thought that it was a supply vs demand problem. But in Sheridan Wyo, or Rapid City? There is something more sinister about all of this than what meets the eye.
Agreed, Credence. But there is a problem with homelessness in Britain. Perhaps it's not quite as severe as in the United States, but it will get worse. We are simply not building enough affordable housing.
Hi Credence. I've been fine, working a lot. I hope you've been good.
I don't know how the situation in Denver will be fixed. Housing prices are just too high and too many people moved here. They are building apartments on every available lot, but they aren't cheap.
Minimum wage has gone up in Denver to over $15, but that doesn't matter.
It is hard to build more homes here unless it is way out of the city, and the commute is miserable. This area was never meant to be this dense. Politicians think apartments are the answer, but higher density won't work because of the street system.
Light rail doesn't seem to work well here. It is just a mess.
Another problem with building more houses is water. This is still a desert, and water is a real problem.
I don't know if anything sinister has gone on. More like ridiculous politicians who don't think ahead. The mayor here is a joke. Denver was advertising in CA for people to move here.
They have been another reason for the housing problem. They were able to sell a home in CA for a great deal of money and move here and buy a house for cash, and many thousands over the asking price.
The government could have put a stop to corporations buying up so many houses. Foreign and US based corporations. And now there are homebuilders that are building brand new homes strictly to rent out, not to sell.
Another problem for those that own their home and retired now, and that is rapidly rising property taxes. Many retirees are considering moving because they can't afford the taxes on the homes they've lived in forever.
And this is causing a real dislike towards all the newcomers here.
Like your dad, I think about the house I grew up in. He bought it for $17k I think in 1959, and it's now worth over $600,000 in SE Denver.
Just 10 years ago, you could easily find a home to rent with a local landlord. Now that is very hard to do. And a nice 3 bedroom 2 bath home would rent for about $1,100. Now that same house is around $2,400.
Something has really one out of whack.
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