"Poverty persists because some wish and will it to."
April 7, 2023 7:50 AM Subscribe
Matthew Desmond's book Poverty, by America (adaptation, NYT gift) (WaPo video discussion, NPR audio/text, New Yorker, The Atlantic, NYT, Roxane Gay reviews) argues that poverty persists in the United States because more fortunate people benefit from it.
The transition was slow but 2008 marked the end of a prosperity built on a large, consumption-based middle class. After that there was a clear shift to a service-based economy where prosperity is for a much narrower group of wealthy who benefit from mass servitude. Debt (and shame) is used to keep the comfortable illusion of a large middle class. This all became real clear during Covid when the servant class suddenly had better options and decided they didn’t want to be servants anymore and the wealthy people who benefited were absolutely pissed.
A society built around home ownership as the primary means of wealth-building is the main way that well-off people on the left benefit from poverty. There’s a lot to be done about that, primarily building a massive amount of new housing, but a good first step would be acknowledge that the problem exists.
posted by scantee at 8:29 AM on April 7, 2023 [31 favorites]
A society built around home ownership as the primary means of wealth-building is the main way that well-off people on the left benefit from poverty. There’s a lot to be done about that, primarily building a massive amount of new housing, but a good first step would be acknowledge that the problem exists.
posted by scantee at 8:29 AM on April 7, 2023 [31 favorites]
I’d say well-off people of all parties.
posted by gottabefunky at 9:23 AM on April 7, 2023
posted by gottabefunky at 9:23 AM on April 7, 2023
I’d say well-off people of all parties.
Of course. But the right openly welcomes a bifurcated system of wealth versus servitude and poverty. Left-liberals do believe such a system is bad, or at least claim to, but often have a huge blind spot when it comes to housing in particular.
posted by scantee at 9:30 AM on April 7, 2023 [6 favorites]
Of course. But the right openly welcomes a bifurcated system of wealth versus servitude and poverty. Left-liberals do believe such a system is bad, or at least claim to, but often have a huge blind spot when it comes to housing in particular.
posted by scantee at 9:30 AM on April 7, 2023 [6 favorites]
A society built around home ownership as the primary means of wealth-building is the main way that well-off people on the left benefit from poverty.
How does owning a home make someone benefit from poverty?
There’s a lot to be done about that, primarily building a massive amount of new housing…
New housing built by whom? By corporations? They’re the ones price gouging. By the government? Isn’t that how we got “the projects.”
posted by shoesietart at 9:32 AM on April 7, 2023 [1 favorite]
How does owning a home make someone benefit from poverty?
There’s a lot to be done about that, primarily building a massive amount of new housing…
New housing built by whom? By corporations? They’re the ones price gouging. By the government? Isn’t that how we got “the projects.”
posted by shoesietart at 9:32 AM on April 7, 2023 [1 favorite]
How does owning a home make someone benefit from poverty?
Owning a home on its own does not make someone benefit from poverty. The benefit is that, because of the housing shortage (via single-family zoning, various investors buying homes to rent) the value of a home has increased far faster than inflation while those who don't own their residences are paying rents that have increased even faster.
If you build a ton more housing, things are more equal--but your 3 bedroom 2 bath is going to lose value relative to other assets because it's not as rare.
posted by thecaddy at 9:39 AM on April 7, 2023 [12 favorites]
Owning a home on its own does not make someone benefit from poverty. The benefit is that, because of the housing shortage (via single-family zoning, various investors buying homes to rent) the value of a home has increased far faster than inflation while those who don't own their residences are paying rents that have increased even faster.
If you build a ton more housing, things are more equal--but your 3 bedroom 2 bath is going to lose value relative to other assets because it's not as rare.
posted by thecaddy at 9:39 AM on April 7, 2023 [12 favorites]
How does owning a home make someone benefit from poverty?
Lack of housing supply in desirable locales, many of them in liberals areas, has made many homeowners extremely wealthy. That wealth gives them an incentive to oppose any mass home-building project that might lower their property values. Go to any community meeting when an apartment building is proposed in a wealthy left-liberal area and you’ll witness grosser sentiments expressed than you would hear from the most avowed reactionary.
New housing built by whom? By corporations? They’re the ones price gouging. By the government?
What’s the alternative to the government or corporations? Artisans and non-profits, I guess. Both of those are fine but don’t have anywhere close to the capacity to build the 10 of millions of homes we need that we’ve failed to build since 2008.
And if your response is to say that there are millions of units sitting empty owned by wealthy individuals and corporations, I’m fine with that, but then we actually need a plan for how to expropriate those units.
posted by scantee at 9:46 AM on April 7, 2023 [23 favorites]
Lack of housing supply in desirable locales, many of them in liberals areas, has made many homeowners extremely wealthy. That wealth gives them an incentive to oppose any mass home-building project that might lower their property values. Go to any community meeting when an apartment building is proposed in a wealthy left-liberal area and you’ll witness grosser sentiments expressed than you would hear from the most avowed reactionary.
New housing built by whom? By corporations? They’re the ones price gouging. By the government?
What’s the alternative to the government or corporations? Artisans and non-profits, I guess. Both of those are fine but don’t have anywhere close to the capacity to build the 10 of millions of homes we need that we’ve failed to build since 2008.
And if your response is to say that there are millions of units sitting empty owned by wealthy individuals and corporations, I’m fine with that, but then we actually need a plan for how to expropriate those units.
posted by scantee at 9:46 AM on April 7, 2023 [23 favorites]
This youtube video was posted in the previous thread sort of about this topic, and IMO it does a much better job of explaining issues. He doesn't have lots of positive things to say about this guy's work.
Points it makes:
1) means testing programs reject lots of actual poor people because they don't have enough income to qualify (many phase in)
4) that the points Desmond makes (housing/financial services costs) are not included in the poverty line measurements because they are consumption measures, not income measures. So adjusting them would not impact the poverty rate, which is solely an income-based measurement.
5) that poverty measurements are measured at the house-hold level, so a person individually can have low pay but not be in poverty due to a higher-earning spouse.
6) that lots of people don't work (kids, disabled, elderly) so they don't have the income to qualify for phase-in income supplements.
3) it's 50 minutes long, but you can watch it at like 2X speed and not miss too much.
Assuming it's all true (I have no way to verify this) you should watch this instead.
posted by The_Vegetables at 10:00 AM on April 7, 2023
Points it makes:
1) means testing programs reject lots of actual poor people because they don't have enough income to qualify (many phase in)
4) that the points Desmond makes (housing/financial services costs) are not included in the poverty line measurements because they are consumption measures, not income measures. So adjusting them would not impact the poverty rate, which is solely an income-based measurement.
5) that poverty measurements are measured at the house-hold level, so a person individually can have low pay but not be in poverty due to a higher-earning spouse.
6) that lots of people don't work (kids, disabled, elderly) so they don't have the income to qualify for phase-in income supplements.
3) it's 50 minutes long, but you can watch it at like 2X speed and not miss too much.
Assuming it's all true (I have no way to verify this) you should watch this instead.
posted by The_Vegetables at 10:00 AM on April 7, 2023
Owning a home on its own does not make someone benefit from poverty. The benefit is that, because of the housing shortage (via single-family zoning, various investors buying homes to rent) the value of a home has increased far faster than inflation while those who don't own their residences are paying rents that have increased even faster.
In California we've been getting zoning changes to allow and even require more dense housing. Which is great for housing accessibilty! But it also locks smaller builders out of the building process. A hundred years ago, you could build a house yourself, with own hands, and you were more likely to have the skills to do it well. Between safety regulations (yay safety!) and the new zoning regulations (yay more housing!) It means that you have to have enough access to money to be able to build a 3-story apartment complex rather than a small house. We need more housing! A small house, people can defer maintenance when times are tough. An apartment owned by someone else, I think tenants rights laws just maybe buy you a few months (and then you still owe for those few months). I don't have answers but I am wondering about this concern. I worry that the solution is still just going to make rich people richer.
posted by aniola at 10:04 AM on April 7, 2023 [4 favorites]
In California we've been getting zoning changes to allow and even require more dense housing. Which is great for housing accessibilty! But it also locks smaller builders out of the building process. A hundred years ago, you could build a house yourself, with own hands, and you were more likely to have the skills to do it well. Between safety regulations (yay safety!) and the new zoning regulations (yay more housing!) It means that you have to have enough access to money to be able to build a 3-story apartment complex rather than a small house. We need more housing! A small house, people can defer maintenance when times are tough. An apartment owned by someone else, I think tenants rights laws just maybe buy you a few months (and then you still owe for those few months). I don't have answers but I am wondering about this concern. I worry that the solution is still just going to make rich people richer.
posted by aniola at 10:04 AM on April 7, 2023 [4 favorites]
The solution is more public housing!
posted by thecaddy at 10:25 AM on April 7, 2023 [6 favorites]
posted by thecaddy at 10:25 AM on April 7, 2023 [6 favorites]
This is important stuff, but another avenue is how do we make the "less valuable" locales more valuable?
I will likely never buy a house where I live, and I live in this area for the work opportunities. I could buy a house today in much of rural America, but then I wouldn't have many options for work.
But there's a lot of room, it's a big country, and while suburbanization sucks, land for houses isn't the problem. Land for houses *in strong economic areas* is the problem. So in addition to squeezing more houses next to the jobs, is there more to be done to spread the jobs around the country? We're seeing some of that with many tech workers going remote, but I mean in a more balanced fashion.
posted by jellywerker at 10:29 AM on April 7, 2023 [3 favorites]
I will likely never buy a house where I live, and I live in this area for the work opportunities. I could buy a house today in much of rural America, but then I wouldn't have many options for work.
But there's a lot of room, it's a big country, and while suburbanization sucks, land for houses isn't the problem. Land for houses *in strong economic areas* is the problem. So in addition to squeezing more houses next to the jobs, is there more to be done to spread the jobs around the country? We're seeing some of that with many tech workers going remote, but I mean in a more balanced fashion.
posted by jellywerker at 10:29 AM on April 7, 2023 [3 favorites]
Lack of housing supply in desirable locales, many of them in liberals areas, has made many homeowners extremely wealthy. That wealth gives them an incentive to oppose any mass home-building project that might lower their property values. Go to any community meeting when an apartment building is proposed in a wealthy left-liberal area and you’ll witness grosser sentiments expressed than you would hear from the most avowed reactionary.
Oh my god, QFT. In my small Canadian city, we need affordable housing like, yesterday. But any attempts to build any sort of apartment housing to create a urban density in our cute historic downtown instead of continuing suburban sprawl results in very vociferous opposition from the "fuck you I got mine" crowd. I am very fortunate to be a homeowner in an desirable adjacent downtown neighbourhood and support any affordable housing for those who need it, but what ends up happening that is nothing gets passed, rents here are now on par with Toronto (but w/out the TO amenities), and at least two houses near me that used to be single family homes have now been converted to solely Air BnB rental apartments.
Don't get me started when I sat in on a city council meeting about St Vincent de Paul wanting to relocate to a VACANT lot a few streets over from me and my horrible neighbours losing their g-d minds about the possibility of having to see homeless or low income folks near their own stoops.
Oh, and yes a ton of condo projects have sprouted up along one of our major downtown streets towards the suburbs but it's all geared towards Queen's students, whose families I guess don't mind shelling out a ton of money for quickly built shiny apartments like this one. (If you click through, you'll see that this new building has very few options under 300K for shoeboxes.)
posted by Kitteh at 10:35 AM on April 7, 2023 [5 favorites]
Oh my god, QFT. In my small Canadian city, we need affordable housing like, yesterday. But any attempts to build any sort of apartment housing to create a urban density in our cute historic downtown instead of continuing suburban sprawl results in very vociferous opposition from the "fuck you I got mine" crowd. I am very fortunate to be a homeowner in an desirable adjacent downtown neighbourhood and support any affordable housing for those who need it, but what ends up happening that is nothing gets passed, rents here are now on par with Toronto (but w/out the TO amenities), and at least two houses near me that used to be single family homes have now been converted to solely Air BnB rental apartments.
Don't get me started when I sat in on a city council meeting about St Vincent de Paul wanting to relocate to a VACANT lot a few streets over from me and my horrible neighbours losing their g-d minds about the possibility of having to see homeless or low income folks near their own stoops.
Oh, and yes a ton of condo projects have sprouted up along one of our major downtown streets towards the suburbs but it's all geared towards Queen's students, whose families I guess don't mind shelling out a ton of money for quickly built shiny apartments like this one. (If you click through, you'll see that this new building has very few options under 300K for shoeboxes.)
posted by Kitteh at 10:35 AM on April 7, 2023 [5 favorites]
'There’s a lot to be done about that, primarily building a massive amount of new housing'
I live in Vancouver, BC, one of the most unaffordable places on earth, especially when traditionally low rates of pay are factored in(one of the latest paying regions in the US and Canada).
Building more housing here means building more investment opportunity for the rentier class. Land value is the key, and because land value here is astronomical all the housing one could build doesn't lower the costs. What has to be done is building more affordable housing, which requires investment from civic, provincial, and federal governments. We used to do this, and an awful lot of co-op housing was built using this model, but the Neo-liberal shift that started in the early '80s wiped out all the federal programs for this by the mid '90s.
So yes, build more housing, but in some areas, like Vancouver, it won't do a thing to lower housing costs. So, build more affordable housing.
posted by Phlegmco(tm) at 10:48 AM on April 7, 2023 [8 favorites]
I live in Vancouver, BC, one of the most unaffordable places on earth, especially when traditionally low rates of pay are factored in(one of the latest paying regions in the US and Canada).
Building more housing here means building more investment opportunity for the rentier class. Land value is the key, and because land value here is astronomical all the housing one could build doesn't lower the costs. What has to be done is building more affordable housing, which requires investment from civic, provincial, and federal governments. We used to do this, and an awful lot of co-op housing was built using this model, but the Neo-liberal shift that started in the early '80s wiped out all the federal programs for this by the mid '90s.
So yes, build more housing, but in some areas, like Vancouver, it won't do a thing to lower housing costs. So, build more affordable housing.
posted by Phlegmco(tm) at 10:48 AM on April 7, 2023 [8 favorites]
Even Robert Reich turned out to be a NIMBY when a corner house on his street came up and was going to be converted to MFH (there was already MFH on the other corner of this busy street in Berkeley).
AFAICT, every “advanced” economy has fallen into the housing trap now. Germany was doing OK as a renter-friendly market until the neoliberals showed up 20-odd years ago and curtailed the public investment that kept renting affordable in the postwar.
I entered adulthood in the mid-80s and got a pretty good deal. College was cheap enough ($1300/yr) to not have to budget for. Rent on a nice 1b in West LA in 1991 was $700, $1550 in today money (actual rent is now pushing $3000).
Things are a lot different now.
posted by Heywood Mogroot III at 11:39 AM on April 7, 2023 [2 favorites]
AFAICT, every “advanced” economy has fallen into the housing trap now. Germany was doing OK as a renter-friendly market until the neoliberals showed up 20-odd years ago and curtailed the public investment that kept renting affordable in the postwar.
I entered adulthood in the mid-80s and got a pretty good deal. College was cheap enough ($1300/yr) to not have to budget for. Rent on a nice 1b in West LA in 1991 was $700, $1550 in today money (actual rent is now pushing $3000).
Things are a lot different now.
posted by Heywood Mogroot III at 11:39 AM on April 7, 2023 [2 favorites]
This is important stuff, but another avenue is how do we make the "less valuable" locales more valuable?
There are over 100 metros in the US with more than 500k people, over 200 with over 200k in population. I mean, IMO it's already been done. There are network effects and commute distances (not even mentioning social factors) that prevent even smaller metros from becoming hubs of innovation. You can do it via high quality secondary education, but that's a long-term thing, and lots of small towners don't like secondary education.
posted by The_Vegetables at 11:52 AM on April 7, 2023 [1 favorite]
There are over 100 metros in the US with more than 500k people, over 200 with over 200k in population. I mean, IMO it's already been done. There are network effects and commute distances (not even mentioning social factors) that prevent even smaller metros from becoming hubs of innovation. You can do it via high quality secondary education, but that's a long-term thing, and lots of small towners don't like secondary education.
posted by The_Vegetables at 11:52 AM on April 7, 2023 [1 favorite]
I entered adulthood in the mid-80s and got a pretty good deal. College was cheap enough ($1300/yr) to not have to budget for. Rent on a nice 1b in West LA in 1991 was $700, $1550 in today money (actual rent is now pushing $3000).
$700 in 1991 for LA was still almost double the US median rent. Construction rates were still relatively higher then, but already constrained from the late 1970s.
posted by The_Vegetables at 11:56 AM on April 7, 2023
$700 in 1991 for LA was still almost double the US median rent. Construction rates were still relatively higher then, but already constrained from the late 1970s.
posted by The_Vegetables at 11:56 AM on April 7, 2023
jellywerker, Krugman had a column touching on this a while ago, I’d start with him and follow links.
It’s uncontrolled monopolization! Again! Through the 1980s, most industries had strong *regional* companies, and there were that many more headquarters and research arms and factories spread much more evenly with the population. But changes in law and enforcement allowed more mergers, and now there are what, ten cities in the whole US with expanding economies that aren’t extraction or retirement? It’s pretty hard to fit all of us in ten cities.
By Geoffrey West’s reasoning, purely economic factors will winner-take-all embiggen fewer and fewer cities until they fail from exogenous shocks or endogenous waste management problems.
posted by clew at 12:26 PM on April 7, 2023 [8 favorites]
It’s uncontrolled monopolization! Again! Through the 1980s, most industries had strong *regional* companies, and there were that many more headquarters and research arms and factories spread much more evenly with the population. But changes in law and enforcement allowed more mergers, and now there are what, ten cities in the whole US with expanding economies that aren’t extraction or retirement? It’s pretty hard to fit all of us in ten cities.
By Geoffrey West’s reasoning, purely economic factors will winner-take-all embiggen fewer and fewer cities until they fail from exogenous shocks or endogenous waste management problems.
posted by clew at 12:26 PM on April 7, 2023 [8 favorites]
Something else to keep in mind is that the cost of building materials has been rising steadily, up until the last few years where it rose precipitously. Which, I think, is one of the reasons nobody's building affordable housing despite the obvious market for it.
posted by MrVisible at 12:49 PM on April 7, 2023 [1 favorite]
posted by MrVisible at 12:49 PM on April 7, 2023 [1 favorite]
Thank you Clew. I'll do some additional reading.
I guess I'm not surprised? There are logistic advantages to concentration, but it can also lead to decreased resiliency.
Even with extractive industries, you have a limit when the resources runs out or becomes irrelevant. See all the dying coal towns and others. The poverty that results when those major employers up sticks is a substantial driver of rural misery from my observation, and then it becomes a self-reinforcing cycle. It's miserable and there aren't jobs, so nobody moves in, despite the cheap land and houses, etc...
posted by jellywerker at 12:52 PM on April 7, 2023 [1 favorite]
I guess I'm not surprised? There are logistic advantages to concentration, but it can also lead to decreased resiliency.
Even with extractive industries, you have a limit when the resources runs out or becomes irrelevant. See all the dying coal towns and others. The poverty that results when those major employers up sticks is a substantial driver of rural misery from my observation, and then it becomes a self-reinforcing cycle. It's miserable and there aren't jobs, so nobody moves in, despite the cheap land and houses, etc...
posted by jellywerker at 12:52 PM on April 7, 2023 [1 favorite]
By the government? Isn’t that how we got “the projects.”
Yes, it's exactly how we got the projects and we need to bring them back. Would you rather live in the projects or on the street? Ha ha just kidding! There's no actual choice anymore! Nowadays the street is the only choice for many. I don't know about you but I'll take a roof over my head and a locking front door over a tent by the overpass any day. What the hell is so wrong about the projects anyway? Oh, does it have something to do with institutionalized racism and locking people away then never investing another dime in them? Destroying neighborhoods and replacing them with a promise of ongoing help that was never kept? The projects didn't fail because social housing was an intrinsically bad idea.
posted by mygothlaundry at 12:56 PM on April 7, 2023 [34 favorites]
Yes, it's exactly how we got the projects and we need to bring them back. Would you rather live in the projects or on the street? Ha ha just kidding! There's no actual choice anymore! Nowadays the street is the only choice for many. I don't know about you but I'll take a roof over my head and a locking front door over a tent by the overpass any day. What the hell is so wrong about the projects anyway? Oh, does it have something to do with institutionalized racism and locking people away then never investing another dime in them? Destroying neighborhoods and replacing them with a promise of ongoing help that was never kept? The projects didn't fail because social housing was an intrinsically bad idea.
posted by mygothlaundry at 12:56 PM on April 7, 2023 [34 favorites]
By the government? Isn’t that how we got “the projects.”
I, an anarchist, assume that the state will do nothing truly right or just, so probably state-built housing will kind of suck. And if it doesn't suck, it will be destroyed by the state as soon as the reaction sets in.
However, if you're not actually an anarchist, bear in mind that "state housing, isn't that the projects?" is basically saying "under no circumstances can we imagine a US government which can execute a project which governments the world over have been able to do okay at". There has been tolerable-to-good public housing all over the world, in Canada, in the UK, in France, in China, in Singapore, etc, and some of it has somewhat not been destroyed by reaction.
Like, my feeling is that if you're not going to be an anarchist, then you need to believe and strategize a realistic way to get the state to do some good. If you don't believe that the state can produce durable justice and stability, then become an anarchist and try other things, but if you do believe that the government can do stuff, then there's no reason that it can't do housing.
If I recall correctly, Eleanor Roosevelt had some connection to some pretty good small-scale public housing designs.
Here in Minneapolis, we used to have some fairly nice, small scale six- or eight-plex public housing developments - pleasant looking, green campus, would be really nice if they were maintained. They were systematically privatized or knocked down or allowed to deteriorate until they had to be knocked down (that's happening to the last of them) by our fucking sold-out despicable selfish "liberal" mayors in this goddamn "liberal" city, but in theory if you believe the state can do things that are good, we could build something like that again.
The problem wasn't the buildings or the people, the problem was the city, god rot all our mayors.
posted by Frowner at 1:45 PM on April 7, 2023 [27 favorites]
I, an anarchist, assume that the state will do nothing truly right or just, so probably state-built housing will kind of suck. And if it doesn't suck, it will be destroyed by the state as soon as the reaction sets in.
However, if you're not actually an anarchist, bear in mind that "state housing, isn't that the projects?" is basically saying "under no circumstances can we imagine a US government which can execute a project which governments the world over have been able to do okay at". There has been tolerable-to-good public housing all over the world, in Canada, in the UK, in France, in China, in Singapore, etc, and some of it has somewhat not been destroyed by reaction.
Like, my feeling is that if you're not going to be an anarchist, then you need to believe and strategize a realistic way to get the state to do some good. If you don't believe that the state can produce durable justice and stability, then become an anarchist and try other things, but if you do believe that the government can do stuff, then there's no reason that it can't do housing.
If I recall correctly, Eleanor Roosevelt had some connection to some pretty good small-scale public housing designs.
Here in Minneapolis, we used to have some fairly nice, small scale six- or eight-plex public housing developments - pleasant looking, green campus, would be really nice if they were maintained. They were systematically privatized or knocked down or allowed to deteriorate until they had to be knocked down (that's happening to the last of them) by our fucking sold-out despicable selfish "liberal" mayors in this goddamn "liberal" city, but in theory if you believe the state can do things that are good, we could build something like that again.
The problem wasn't the buildings or the people, the problem was the city, god rot all our mayors.
posted by Frowner at 1:45 PM on April 7, 2023 [27 favorites]
A friend of mine owns an apartment in a Co-op in New York City. It was originally built as public housing and then turned into a co-op, my guess is that people were given the opportunity to buy their apartments.
It's a nice place. The apartments are nice. The grounds are nice. The place is safe. Because there has been actual money invested in keeping it nice. If all projects had had similar levels of investment, they'd be as nice or just about as nice (give or take institutionalized racism, transit issues, etc.). A building being a housing project isn't the problem. It's the chronic underfunding of these projects.
We're now in Edinburgh, Scotland. The housing here is as almost bad as NYC, except without the high incomes to compensate for it. (The rent is lower, but the median salary vs rent ratio is much lower than New York's) The University of Glasgow was telling students to take a year off or just not attend if they couldn't secure housing. We need more public housing in both the US and the UK and it needs to be somewhere that middle class people are happy to live along with the working class, of all races.
posted by Hactar at 2:22 PM on April 7, 2023 [5 favorites]
It's a nice place. The apartments are nice. The grounds are nice. The place is safe. Because there has been actual money invested in keeping it nice. If all projects had had similar levels of investment, they'd be as nice or just about as nice (give or take institutionalized racism, transit issues, etc.). A building being a housing project isn't the problem. It's the chronic underfunding of these projects.
We're now in Edinburgh, Scotland. The housing here is as almost bad as NYC, except without the high incomes to compensate for it. (The rent is lower, but the median salary vs rent ratio is much lower than New York's) The University of Glasgow was telling students to take a year off or just not attend if they couldn't secure housing. We need more public housing in both the US and the UK and it needs to be somewhere that middle class people are happy to live along with the working class, of all races.
posted by Hactar at 2:22 PM on April 7, 2023 [5 favorites]
I, an anarchist, assume that the state will do nothing truly right or just, so probably state-built housing will kind of suck. And if it doesn't suck, it will be destroyed by the state as soon as the reaction sets in.
The fact that there is intense variation in public goods provision around the global does more than suggests but in fact demonstrates that yes, the state can build good public housing.
posted by MisantropicPainforest at 3:06 PM on April 7, 2023 [2 favorites]
The fact that there is intense variation in public goods provision around the global does more than suggests but in fact demonstrates that yes, the state can build good public housing.
posted by MisantropicPainforest at 3:06 PM on April 7, 2023 [2 favorites]
Like we have study after study my empirical social scientist saying that more housing = lower rents, better outcomes on a host of measures, etc
posted by MisantropicPainforest at 3:08 PM on April 7, 2023
posted by MisantropicPainforest at 3:08 PM on April 7, 2023
For example, if a family paid $1,000 a month to rent an apartment with a market value of $20,000, that family would experience a higher level of renter exploitation than a family who paid the same amount for an apartment with a market valuation of $100,000.
In Australia we seem to be a double crunch where builders can't afford to build more houses because renters can't afford to offer more rent since wages are stagnant, created a widening gap in housing supply.
As an example, for many years I lived in a suburb 10km from Melbourne where today a 3 bedroom house sells for about $800,000, and if you assume the cost of capital (interest) is 6% right now, your interest incurred on the full amount is 0.06 x $800,000 = $48,000 per year. On the other hand, the best rent it can get is about $410 per week, so that's $21,000 per year.
So you're renting for much less than the interest cost on the mortgage the owner is incurring, even assuming a mortgage of 50% of total equity, what more when you include maintenance, agent fees, council rates, water supply charges, mandatory safety inspections, and of course depreciation, since the fixtures and house itself doesn't last forever and eventually needs replacing.
It costs about $450,000 to build a house nowadays (if you already have the land) due to rapidly rising prices of labor and raw materials, and even at that price a dozen builders have gone bankrupt because they can't keep up with those price rises.
So the supply end is getting squeezed because interest rates are up, building progress is stalling because builders are going bankrupt, and housing starts have disappeared because people are afraid their builder will go bankrupt, and interest rates going up means rental yields are deeply negative, so no one is building houses.
Yet the population is increasing every year.
In a functioning market, lack of supply means rent prices go up.
Yet rent yields can't go up in response to lack of supply, because rent yields are always dictated by buying power, and wages haven't gone up, so rents aren't going up as much as they need to in order to trigger new supply. Sure rents are up... some... but in my example, nowhere near enough.
So you end up in a situation where builders can't afford to build more houses because renters can't afford to pay more in rent.
You might ask, why does it cost $450,000 to build a house nowadays? Some of it is regulatory in nature - I have a small interest in building regulations and every year a whole raft of new requirements get floated. Most houses built prior to 2000 rate at 1 star NATHERS or worse, in terms of energy efficiency, while new houses are going to be mandated at 7 star NATHERS which use a mere 1/7th of the heating and cooling energy required. There's expenses everywhere you turn - requiring exterior venting exhausts, using far more expensive "non toxic" termite treatments, waterproofing / fireproofing standards. And raw materials simply cost more, concrete, steel, even labor cost per hour has shot up massively.
At the crux of it poverty is inextricably linked to inequality. In simple terms, money exists to be spent, the rich (or their children) eventually spend all their money, and bid up the price of goods, so if you're poor you get out-priced and out-competed for housing. Poverty isn't really an absolute measure, it's really an relative measure. The author leaves out "starvation" because that rarely happens in the US, but in absolute terms, globally, people absolutely do suffer from starvation, but we wouldn't use "doesn't starve" as a sign we conquered poverty in the US. Trying to fix poverty by offering people more and more Medicaid or SNAP is just a band-aid when the real driver is inequality. Tax the rich and you'll see a more rationally priced economy.
posted by xdvesper at 6:22 PM on April 7, 2023 [7 favorites]
In Australia we seem to be a double crunch where builders can't afford to build more houses because renters can't afford to offer more rent since wages are stagnant, created a widening gap in housing supply.
As an example, for many years I lived in a suburb 10km from Melbourne where today a 3 bedroom house sells for about $800,000, and if you assume the cost of capital (interest) is 6% right now, your interest incurred on the full amount is 0.06 x $800,000 = $48,000 per year. On the other hand, the best rent it can get is about $410 per week, so that's $21,000 per year.
So you're renting for much less than the interest cost on the mortgage the owner is incurring, even assuming a mortgage of 50% of total equity, what more when you include maintenance, agent fees, council rates, water supply charges, mandatory safety inspections, and of course depreciation, since the fixtures and house itself doesn't last forever and eventually needs replacing.
It costs about $450,000 to build a house nowadays (if you already have the land) due to rapidly rising prices of labor and raw materials, and even at that price a dozen builders have gone bankrupt because they can't keep up with those price rises.
So the supply end is getting squeezed because interest rates are up, building progress is stalling because builders are going bankrupt, and housing starts have disappeared because people are afraid their builder will go bankrupt, and interest rates going up means rental yields are deeply negative, so no one is building houses.
Yet the population is increasing every year.
In a functioning market, lack of supply means rent prices go up.
Yet rent yields can't go up in response to lack of supply, because rent yields are always dictated by buying power, and wages haven't gone up, so rents aren't going up as much as they need to in order to trigger new supply. Sure rents are up... some... but in my example, nowhere near enough.
So you end up in a situation where builders can't afford to build more houses because renters can't afford to pay more in rent.
You might ask, why does it cost $450,000 to build a house nowadays? Some of it is regulatory in nature - I have a small interest in building regulations and every year a whole raft of new requirements get floated. Most houses built prior to 2000 rate at 1 star NATHERS or worse, in terms of energy efficiency, while new houses are going to be mandated at 7 star NATHERS which use a mere 1/7th of the heating and cooling energy required. There's expenses everywhere you turn - requiring exterior venting exhausts, using far more expensive "non toxic" termite treatments, waterproofing / fireproofing standards. And raw materials simply cost more, concrete, steel, even labor cost per hour has shot up massively.
At the crux of it poverty is inextricably linked to inequality. In simple terms, money exists to be spent, the rich (or their children) eventually spend all their money, and bid up the price of goods, so if you're poor you get out-priced and out-competed for housing. Poverty isn't really an absolute measure, it's really an relative measure. The author leaves out "starvation" because that rarely happens in the US, but in absolute terms, globally, people absolutely do suffer from starvation, but we wouldn't use "doesn't starve" as a sign we conquered poverty in the US. Trying to fix poverty by offering people more and more Medicaid or SNAP is just a band-aid when the real driver is inequality. Tax the rich and you'll see a more rationally priced economy.
posted by xdvesper at 6:22 PM on April 7, 2023 [7 favorites]
I find it interesting that so much of the reaction, here and in the prior link and in public, is to quibble about just how poor people are--as if there were some genuine doubt that we had poverty in the U.S.--instead of looking at his major point that at this point in history, poverty in the U.S. is largely a function of exploitation rather than limited resources. I guess the former is easier.
posted by praemunire at 6:39 PM on April 7, 2023 [6 favorites]
posted by praemunire at 6:39 PM on April 7, 2023 [6 favorites]
If I was in charge of everything, I would offer good tax breaks for investments in Govt-sponsored Co-operatively owned low-rise (5 floor) public housing projects built to reasonable environmental standards, with some decent planning and transit.
posted by ovvl at 6:50 PM on April 7, 2023 [2 favorites]
posted by ovvl at 6:50 PM on April 7, 2023 [2 favorites]
But it is about scarce resources to some extent. The whole point of the book is that poverty in the US is fixable. The CARES act drastically reduced poverty. It worked! Building more housing lowers housing costs and lowers poverty. Making it easier for people to access welfare programs lowers poverty.
posted by MisantropicPainforest at 7:25 PM on April 7, 2023 [2 favorites]
posted by MisantropicPainforest at 7:25 PM on April 7, 2023 [2 favorites]
But it is about scarce resources to some extent. The whole point of the book is that poverty in the US is fixable. The CARES act drastically reduced poverty. It worked! Building more housing lowers housing costs and lowers poverty. Making it easier for people to access welfare programs lowers poverty.
Those are all artificially scarce resources -- we have enough land and building materials and money that, if we wanted to, we could build vast amounts of affordable/subsidized housing or otherwise ameliorate the worst of poverty. (This would be a far better use of public funds than subsidizing hedge fund managers via taxbreaks, say.) But to the point of the author, a major factor is that there a lot of individual people as well as institutions that benefit from the current status quo. It's not just that poor people are being hurt, it is that other people are directly benefiting, and many more of us indirectly benefit (like from access to products made by cheap labor). You can't fix it just by subsidizing the safety net, you would also have to remove and mitigate for the ways poor people are exploited.
posted by Dip Flash at 6:19 AM on April 8, 2023 [8 favorites]
Those are all artificially scarce resources -- we have enough land and building materials and money that, if we wanted to, we could build vast amounts of affordable/subsidized housing or otherwise ameliorate the worst of poverty. (This would be a far better use of public funds than subsidizing hedge fund managers via taxbreaks, say.) But to the point of the author, a major factor is that there a lot of individual people as well as institutions that benefit from the current status quo. It's not just that poor people are being hurt, it is that other people are directly benefiting, and many more of us indirectly benefit (like from access to products made by cheap labor). You can't fix it just by subsidizing the safety net, you would also have to remove and mitigate for the ways poor people are exploited.
posted by Dip Flash at 6:19 AM on April 8, 2023 [8 favorites]
The way I see it, increased housing prices don't really benefit the normal homeowner all that much. Right now my parents are living in a relatively cheap house in rural Georgia, which they bought new but the price has doubled over the past ten years even though it's in worse condition now and the neighborhood is less desirable than it previously was (more forest was cleared and there are more trucks hauling goods along the nearby highway).
But now that they want to move, the increase in value is not a help at all, because other real estate also increased in price just as much or more. Trying to upgrade to a nicer place is more difficult. Just finding a place is difficult -- the house across the street from me that was FSBO sold in three days. And renting an apartment is more expensive than a mortgage.
It seems to me like the ones that really benefit from higher housing costs are the landlords, house flippers, investors etc. And their activity helps drive up the scarcity and prices further.
posted by Foosnark at 6:24 AM on April 8, 2023 [2 favorites]
But now that they want to move, the increase in value is not a help at all, because other real estate also increased in price just as much or more. Trying to upgrade to a nicer place is more difficult. Just finding a place is difficult -- the house across the street from me that was FSBO sold in three days. And renting an apartment is more expensive than a mortgage.
It seems to me like the ones that really benefit from higher housing costs are the landlords, house flippers, investors etc. And their activity helps drive up the scarcity and prices further.
posted by Foosnark at 6:24 AM on April 8, 2023 [2 favorites]
The way I see it, increased housing prices don't really benefit the normal homeowner all that much. Right now my parents are living in a relatively cheap house in rural Georgia, which they bought new but the price has doubled over the past ten years even though it's in worse condition now and the neighborhood is less desirable than it previously was (more forest was cleared and there are more trucks hauling goods along the nearby highway).
But now that they want to move, the increase in value is not a help at all, because other real estate also increased in price just as much or more.
It's a benefit if you have a way to capture that value (like by selling and then moving to a cheaper location). And it's a benefit even if you are buying another house locally because all that additional equity that you have can be turned into a much larger downpayment on the new place. Like, say you bought your first house for $200k with $40k down, and then the pandemic happened and now your house is worth $400k. Ignoring transaction costs, that's another $200k you could use to either leverage a much more expensive house (ie, a downpayment of $240k buys a lot of house) or use to reduce the size of your new mortgage on a similar house. Versus a person trying to buy for the first time using that same $40k downpayment that you used a few years ago, you would be in a much stronger position, simply by fortune of good timing.
posted by Dip Flash at 9:40 AM on April 8, 2023 [3 favorites]
But now that they want to move, the increase in value is not a help at all, because other real estate also increased in price just as much or more.
It's a benefit if you have a way to capture that value (like by selling and then moving to a cheaper location). And it's a benefit even if you are buying another house locally because all that additional equity that you have can be turned into a much larger downpayment on the new place. Like, say you bought your first house for $200k with $40k down, and then the pandemic happened and now your house is worth $400k. Ignoring transaction costs, that's another $200k you could use to either leverage a much more expensive house (ie, a downpayment of $240k buys a lot of house) or use to reduce the size of your new mortgage on a similar house. Versus a person trying to buy for the first time using that same $40k downpayment that you used a few years ago, you would be in a much stronger position, simply by fortune of good timing.
posted by Dip Flash at 9:40 AM on April 8, 2023 [3 favorites]
If you're having your property appraised as a homeowner and you have more equity available as a result, isn't that a tangible benefit?
posted by Selena777 at 10:33 AM on April 8, 2023
posted by Selena777 at 10:33 AM on April 8, 2023
Yes, of course it is. You can borrow against that equity. When old age comes, you can sell the house to fund a move into care. A claim that "increased housing prices don't really benefit the normal homeowner all that much" is not particularly moored in reality. A fixation on the house as store of wealth is the engine of a lot of terrible housing policy.
posted by praemunire at 12:19 PM on April 8, 2023 [2 favorites]
posted by praemunire at 12:19 PM on April 8, 2023 [2 favorites]
The timing and circumstances were different for me, Dip Flash, but you otherwise hit it right on the head.
My wife and I bought our first house in 2011 from a bank that had foreclosed on and did a slap-dash remodel to get rid of it. We benefitted heavily from our parents gifting us funds to use as a down payment as they themselves got from their parents. We then sold that house in 2011 for a nice fat chunk more than we paid which we used as down payment on the next one which we got a little lucky and were pretty savvy in the negotiations. It's now worth another big fat chunk more than we paid.
In my defense, my grandfather was a WWII vet but he literally built his first house himself. It was also how he made a living so he would work on houses all day then come home and work on his. But otherwise my privilege is totally showing.
It really should just be that way for everyone.
posted by VTX at 3:53 PM on April 8, 2023 [1 favorite]
My wife and I bought our first house in 2011 from a bank that had foreclosed on and did a slap-dash remodel to get rid of it. We benefitted heavily from our parents gifting us funds to use as a down payment as they themselves got from their parents. We then sold that house in 2011 for a nice fat chunk more than we paid which we used as down payment on the next one which we got a little lucky and were pretty savvy in the negotiations. It's now worth another big fat chunk more than we paid.
In my defense, my grandfather was a WWII vet but he literally built his first house himself. It was also how he made a living so he would work on houses all day then come home and work on his. But otherwise my privilege is totally showing.
It really should just be that way for everyone.
posted by VTX at 3:53 PM on April 8, 2023 [1 favorite]
The way I see it, increased housing prices don't really benefit the normal homeowner all that much.
My mother benefits from a reverse mortgage. Yes, RMs are sketchy and feel predatory, but $1700 a month in social security isn’t quite enough. It will eventually be consumed by medical bills.
This country.
posted by mecran01 at 8:21 AM on April 9, 2023 [2 favorites]
My mother benefits from a reverse mortgage. Yes, RMs are sketchy and feel predatory, but $1700 a month in social security isn’t quite enough. It will eventually be consumed by medical bills.
This country.
posted by mecran01 at 8:21 AM on April 9, 2023 [2 favorites]
like by selling and then moving to a cheaper location
Like one of those places that is all out attacking LGBTQ and restricting reproductive freedom? The most affordable places are going to be the ones with the crappiest social stances.
There's value in staying connected to your network of friends, family, colleagues, invested social interests. I'm sure a much more savvy person could come along and let us know how to turn our house into a better house but the price of housing where I live has boomed past the local median salary and I don't see how we will ever turn our "starter home" purchased in 2007 into the home that will help us afford the next home or the "downsized" home for our elder years. I've even looked into purchasing a condo and even those seem more expensive than what we've got. We also aren't looking at any inheritance and were given minimal financial help when we started out. Our boomer parents are of the "bootstraps" mentality so they've spent their wealth on timeshares, nice cars and homes and furniture, china cupboards full of "heirlooms" and will likely spend the rest of their money on caring for themselves in their elder years.
posted by amanda at 9:05 AM on April 10, 2023
Like one of those places that is all out attacking LGBTQ and restricting reproductive freedom? The most affordable places are going to be the ones with the crappiest social stances.
There's value in staying connected to your network of friends, family, colleagues, invested social interests. I'm sure a much more savvy person could come along and let us know how to turn our house into a better house but the price of housing where I live has boomed past the local median salary and I don't see how we will ever turn our "starter home" purchased in 2007 into the home that will help us afford the next home or the "downsized" home for our elder years. I've even looked into purchasing a condo and even those seem more expensive than what we've got. We also aren't looking at any inheritance and were given minimal financial help when we started out. Our boomer parents are of the "bootstraps" mentality so they've spent their wealth on timeshares, nice cars and homes and furniture, china cupboards full of "heirlooms" and will likely spend the rest of their money on caring for themselves in their elder years.
posted by amanda at 9:05 AM on April 10, 2023
As an example, for many years I lived in a suburb 10km from Melbourne where today a 3 bedroom house sells for about $800,000, and if you assume the cost of capital (interest) is 6% right now, your interest incurred on the full amount is 0.06 x $800,000 = $48,000 per year. On the other hand, the best rent it can get is about $410 per week, so that's $21,000 per year.
That might be true in Australia, but it's not true in the US, at least until you are well into the millions. Those places rent at discounts to their purchasing prices. But below that? Rent is basically computed at monthly rent * 120, so the place in your example would be around $200k. An actual $800k home would rent for like $5k a month.
posted by The_Vegetables at 2:55 PM on April 12, 2023
That might be true in Australia, but it's not true in the US, at least until you are well into the millions. Those places rent at discounts to their purchasing prices. But below that? Rent is basically computed at monthly rent * 120, so the place in your example would be around $200k. An actual $800k home would rent for like $5k a month.
posted by The_Vegetables at 2:55 PM on April 12, 2023
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