The US may be past the most recent era of foreclosures, but housing now has two other affordability issues: high prices and high rents. Several cities like those in the Bay area, New York, DC, and Seattle are seeing price gains that are good for sellers and bad for buyers. As for renters, many foreclosed houses were bought by corporations and turned into rentals, new apartments are predominantly built as luxury single bedroom units, and increasing density frequently runs into resistant regulations. People with lower incomes are finding it difficult to rent or buy. Mortgages are more difficult for them because lower wage jobs aren’t seeing wage growth. Renting is difficult because affordable spaces tend to be far from city and job centers. The impact is estimated to be 10% of US GDP. One consequence is that people in poor parts of the country can’t afford to move to areas with better jobs because there’s no place for them to live. The issue has risen to the White House, but the solutions will probably be local because that’s where the incentives for employers, contractors, employees, and municipalities will be applied. Unfortunately, there’s no mechanism to even the inequities in wealth and income between places as diverse as Silicon Valley and Appalachia.
(Click on the graph for the link.)
My life story in San Francisco Peninsula and why I came to Seattle 33 years ago…and why I moved from east side to Whidbey 12 years ago to retire. I know this game/dilemma inside out. When the mall starts filling with exclusive shops and retail pads come in with paid / valet parking it’s not a good sign for the middle class. Few are swept upward with desire while the remaining feel the pressure of being displaced. But I always wonder where are these people coming from? You can blame the high tech crowd, but I worked in high tech for 25 years and never made enough of a salary to move up. But perhaps I wasn’t attracted to the trappings of the elite classes.
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