HOUSING VOUCHERS
Matthew Yglesias is now officially a writer. His first bylined piece in The American Prospect is now up.
He addresses the flip side of the housing boom:
Throughout the Bush recession [Didn’t the downturn start under the Clinton administration? Not that presidents cause recessions, anyway. -ed. ] and the ensuing jobless recovery, the one consistent source of good economic news has been from the housing market. The value of the average home increased 6.48 percent in the 12-month period ending on March 31, and it is up a hefty 38.04 percent over the past five years. This continuing strength has given homeowners a cushion in the value of their assets during an era of declining stock portfolios. It has also provided construction jobs during a catastrophic period for employment in the manufacturing sector.
This has been good news for families who own homes. But the millions of Americans who rent their homes — a disproportionately poor, disproportionately young group — face an increasingly bleak situation.
True. Not to mention those, also typically young, trying to buy their first home and thus starting without equity.
Unsurprisingly, the least-affordable parts of the country are the metropolitan areas around places such as San Francisco, Boston, New York and Washington, but rural America is feeling the squeeze as well. In West Virginia, America’s cheapest state for housing, the local housing wage is 171 percent of the minimum wage. Even in sparsely populated states where land should be relatively cheap, rents may be high simply because few rentable units have been constructed. Alaska and New Hampshire, for example, have the seventh- and eighth-highest housing wages, at $16.75 and $16.49 per hour, respectively. An Alaskan household — either a single person or a couple — would need to work a total of 94 hours per week at the state’s minimum wage ($7.15) to rent a two-bedroom apartment, while a family or single person in New Hampshire (where the minimum wage is $5.15) would need to put in 128 hours to rent a similar apartment.
Yowsa. Intellectually, I’d say that people whose skill levels are such that they can’t exceed the minimum wage shouldn’t expect to support themselves on 40 hours a week’s work. One would hope that, by the time you’re old enough to have to support yourself, you’d be marketable enough to earn a decent wage. I’m afraid people with insufficient IQs to do that are going to be at least partly reliant on welfare programs. [I think that’s what Matt’s getting to. -ed. Oh.]
Still, the housing crisis is largely an issue for the more tightly packed blue states, making it unlikely that the Bush administration will experience a change of heart and come to the rescue with a generous supplemental budget request. Of the 52 jurisdictions surveyed for the NLIHC report (all 50 states plus Puerto Rico and the District of Columbia), eight of the 10 most expensive went for Al Gore in 2000. Nonvoting and very poor Puerto Rico took the cheapest slot, followed by 19 Bush states in a row.
Oh, come on! We’re starving the poor in order to punish them for voting Democrat? [Serves ’em right. -ed.]
ABC News anchorman Peter Jennings led the charge to get the New York City Landmarks Preservation Committee to block the construction of a new 14-story apartment on the Upper West Side. His campaign is supported, as such things often are, by local liberal state legislators. Commissions and boards of this sort that allow well-off homeowners to protect the “character” of their neighborhoods at the expense of construction that would bring prices down for everyone else are all too common in the United States.
To be sure, such restrictions do not always directly block the creation of housing that would be affordable for low-income families — it’s unlikely, to say the least, that any minimum-wage workers would have been moving in across the street from Jennings. But by capping development in high-income areas, such efforts force builders to put expensive housing elsewhere, which in turn leads to the waves of gentrification that push the working poor farther and farther from centers of employment and transportation. In the worst-case scenario, it pushes them out of housing altogether, onto the streets and into overcrowded shelters.
Aside from the hypocrisy charge, it strikes me as reasonable that Jennings wouldn’t want to have a welfare project built next door. I mean, I’ve got a job and can’t afford to live next door to Peter Jennings. Or, even Sheppard Smith. Indeed, most everyone in the D.C. Metro area either has to endure an insanely long commute or live in substandard housing–or both–in order to make it. That’s, as they say, life in the big city.
James I can’t believe you fell for this scam….
It is so ripe for a fisking.
The numbers are pulled from wholecloth. You missed the important part of the survey he quotes…
A new report released Monday by the National Low Income Housing Coalition (NLIHC) reveals that the national housing wage (the amount of money per hour a full-time worker would need to make in order to rent a two-bedroom apartment on less than 30 percent of his or her income) for 2003…
That methodology is completely arbitrary and quite worthless as was quite evident when you read this:
…but rural America is feeling the squeeze as well. In West Virginia, America’s CHEAPEST state for housing, the local housing wage is 171 percent of the minimum wage.
OK if the “best case scenario” out there is so horrible perhaps your metric is wrong! If they lowered it from 30 percent to 10 percent they could make the number look worse! Raise it to 50% and the number look great! (again) They are using an arbitrary and worthless metric!
Another Example
An Alaskan household — either a single person or a couple — would need to work a total of 94 hours per week at the state’s minimum wage ($7.15) to rent a two-bedroom apartment,
OK if you consider this is a TWO bedroom house it would be logical that there would be TWO wage earners. (why would a single need 2 bedrooms?) OK so TWO wage earners have to work 94 hours to pay for the apartment WITH ONLY THIRTY PERCENT of their income! So assuming you have two wage earners they work 80 hours a week to make that money…
My calculator tells me that 94 hours * $7.15 minimum wage = $672.10. and 30% of that is $201.63 for rent for a 2 bedroom!
That represents only 35 percent of their income… AND this is the MINIMUM wage!
I don’t think that if combined the 2 people do not have enough skills to be paid more than minimum wage asking them to pay 35% of their income for housing is too much to ask!
AND their ridiculous model does not account for overtime!
Conclusion
Rather than compute actual percent of income for housing and letting the number speak for themselves, they introduce a false (hourly) model to confuse the issue.
The methodology is completely bogus. This is not a “study.” This is propagana from a left wing group. They just took some census numbers and distorted them to tell the story they wanted to tell.
Matthew does himself no favor by making this his premiere article.
Paul
The only thing more annoying than poor policy is poor science pushing it.
Interesting.
I’m not sure where one finds a house with fewer than 2 bedrooms? Indeed, the only time I’ve had only one bedroom as an adult was when I was in the Army renting in Germany. Even in grad school, I had a 2-bedroom apt.
You make a point on the 30 percent metric, although it is pretty standard as what you’re “supposed” to spend on housing. Indeed, I’ve always managed to live under that figure until moving here. Now, I’m going to be paying about 50 percent.
I think the hourly wage makes sense, considering low wage people are paid on that basis. I’ve never had a grown up job where I wasn’t on salary, so it’s a strange number for me to wrap my mind around.
I’m not sure where one finds a house with fewer than 2 bedrooms?
Think apartments. Studio apartments have no bedroom. Many have only 1.
You make a point on the 30 percent metric, although it is pretty standard as what you’re “supposed” to spend on housing.
In high school they told me 33% was the magic number and that was my only exposure to a formal rule about it.
But when your cheapest housing in the country did does not meet their standards, CLEARLY they have a goofy metric.
35% percent is HARDLY anything to fret over.
The hourly wage thing is a ploy. They could just as well producted a chart that had the actual percent of income and leave it at that. But as my fisking shows that would not be as impressive as saying someone had to work 94 hours to afford rent which is not completely accurate.
It ain’t science, it is junk.
Paul
I’m not sure where one finds a house with fewer than 2 bedrooms?
Think apartments. Studio apartments have no bedroom. Many have only 1.
You make a point on the 30 percent metric, although it is pretty standard as what you’re “supposed” to spend on housing.
In high school they told me 33% was the magic number and that was my only exposure to a formal rule about it.
But when your cheapest housing in the country did does not meet their standards, CLEARLY they have a goofy metric.
35% percent is HARDLY anything to fret over.
The hourly wage thing is a ploy. They could just as well producted a chart that had the actual percent of income and leave it at that. But as my fisking shows that would not be as impressive as saying someone had to work 94 hours to afford rent which is not completely accurate.
It ain’t science, it is junk.
Paul
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