TL;DR: Americans now need to make $120K a year to afford a typical middle-class life and qualify to purchase a home. Minimum.
Where we failed is that $120k was supposed to be a middle-class income when living costs this much. The fact the median is 63k is a sign that all the excess value has been sucked out of the masses and funneled into the coffers of the billionaire class.
100% this. It’s not that costs rose as much as it’s that salaries didn’t increase.
It’s both. If the price of homes aren’t reflecting an affordable price, you have to ask, who’s buying them? It’s not the average family - it’s corps sucking up homes as investment assets, driving up prices to sell to each other and the “lucky” family or two that get to empty out their retirement fund just to have a place to live. That’s not reflective of a natural, reasonable increase. That’s the result of hedge funds destroying the housing market for the rest of us, just to pad their bank accounts.
That may be true in some of the lower priced Midwestern markets, but I sell real estate in Boston and I don’t see big corporate interests in the single family or owner occupied 2-3 family market. as much as big corporations have ruined a lot of things in this country, I don’t think we Dan just wave our hands and say “corporate buyers” and explain away our housing market problems.
We have a confluence of decades of exclusionary zoning and restrictions on building that make meaningfully adding to the supply of housing almost impossible. We have a huge deficit of qualified workers in the building trades, in part because all the work dried up after the great recession and people left the field and in part because we’ve pushed more and more kids to go to college. We have a mortgage system that’s nearly unique worldwide that allows homeowners tremendous advantages in keeping their housing costs low, but inversely provides tremendous disadvantages to having them move around more often and free up housing stock (so lots of aging singles and couples in big houses better suited for young people with kids). We have a society that’s bizarrely fixated on single family living even though we desperately need more density in most markets. And we have the problem of wage stagnation. None of those things are directly attributable to corporate ownership of large numbers of houses.
I’d love for there to be some silver bullet where we could just say “disincentivize corporations from owning small housing stock” and solve the problem, but it’s nowhere near that simple.
In the late 70s around 23% of US corporate revenues went to pay salaries. By 2012 that had fallen to 7% - in other words, just before neoliberalism really took off almost 1/4 of the money workers spent buying goods from US companies was almost directly back in workers’ pockets, whilst by 2012 less that 1/14 of what workers spent buying goods from US companies ended back in workers’ pockets.
All that excess money that doesn’t get recycled back to workers anymore has got to be pooling somewhere.
The problem is you need to be a couple to have a house.
In the 80s and even 90s the mother of the house probably didn’t work. I know mine didn’t. Now they have to. The prices have gone up to match this “new normal” because there simply aren’t enough houses. Or at least not enough houses in the places people want to live.
The free markets have settled on the idea that a house should cost two incomes. The government needs to step in to build affordable homes and get them into the right hands. No landlords scoffing them all up.
I honestly don’t even know why this upsets me so much. I am 50 and all set. I don’t have children and barely any debt. I never considered myself particularly patriotic but somehow this whole thing gets under my skin. I guess it sours my achievements and fruits of decades of struggle (it took three generations of planning and hustle to get us out of poverty). It’s like being a kid having a birthday party at Chuck E Cheese by yourself while all your friends are locked outside and you can see them through the glass windows.
It gets under my skin because the west was on the right trajectory; improving wealth equality, quality of life, work life balance, etc — Then Capitalists killed all those gains using Conservatism, Neoliberalism, and a bastardised version of Libertarianism — just to enrich a tiny percentage the human population and return the rest of humanity to feudalism.
Why should they own all the gains from humanities collective efforts, when all of us have a rightful claim to a share of those gains?
In the early 1900s we had huge fights for labor. Strikes yes, but also some literal armed fights.
We won a lot. They conceded a lot.
But they’ve eroded those wins, little by little, for a century or so.
This is what will ALWAYS happen when you live in a system explicitly designed to extract profit from workers and reward greed. It cannot be reformed. It cannot be controlled. It will always slide backwards into this. We need a different system altogether.
the west was on the right trajectory
A lot of the west is still on the right trajectory. It’s the US that is not.
There are a lot of developed countries, especially in Europe, where the “American Dream” is much easier to attain than in America. But, more often than not, they don’t even want that dream. For good reason.
Wanting other people to have what you have, without your struggle, is an opinion we need more of.
Especially when we have a society with a huge number of people who think that if you’re poor, you deserve it.
This happened because people were lulled into voting for the very people who gave their fair share of corporate profits to the rich. Looking at you, Republicans, especially Ronald Reagan.
TL;DR: Americans now need to make $120K a year to afford a typical middle-class life and qualify to purchase a home. Minimum.
Maybe in the middle of nowhere America. Meanwhile my wife and I make well above that in Los Angeles and we can’t afford the monthly on a two bedroom house in a sketchy neighborhood.
SF Bay Area, $125k a year, I gave up on buying a house. I’ll just inherit my parents’ when they die, thanks.
Most people’s parents will end up selling their home to pay for cruise ships, and or palliative care.
So why do people live there?
All I ever heard is how absurd the cost of living is in Cali, is the weather really that good?
Being born there, living your entire life there, your whole family and all your friends are there, you went to high school and college there so it’s easier to transfer to a CSU for grad school, and cheaper because you won’t have to pay non-resident fees, etc etc. The same reason people don’t move from other places. Besides, it takes a lot of savings to move, especially out of state, especially when you have to keep going back and forth to look at places. There’s also just not wanting to move. I am really not ok with being forced out of my home and away from my family because of bullshit like this.
And yes the weather really is that good - in Southern California.
I’m sorry, you think people that can’t afford a basic living situation in California are able to up and move their entire lives that easily? Do you have any idea how much that costs?
Well, it sounds like basic living there is way higher than anywhere else, so maybe?
Good thing investment “firms” are buying up all the rental properties, right, guys? Neofeudalism for the win!
But you can buy a microshare of the fund through Robinhood, so it all works out. Right?
