4 ms·

For those of us who live in high cost of living areas, its easy to forget just how cheap most of the US is: the median mortgage payment in the US is $1100.month

by ac29 6y ago

For those of us who live in high cost of living areas, its easy to forget just how cheap most of the US is: the median mortgage payment in the US is $1100.month (2017 data) [0]. That's 151 minimum wage hours, or about a month of ~40 hour weeks (before taxes, which are very low at that income level). So, a household with two minimum wage earners probably would struggle to afford the median mortgage, but remember half of mortgages are less than that. This is not me attempting to justify the current minimum wage - I think it should come up. I just think many on this site live in areas where renting a small 1 bedroom apartment is more expensive than $1100/month, or even significantly more than that, much less owning a home. [0] https://www.census.gov/programs-surveys/ahs/data/interactive/ahstablecreator.html?s_areas=00000&s_year=2017&s_tablename=TABLE14B&s_bygroup1=19&s_bygroup2=1&s_filtergroup1=2&s_filtergroup2=1&s_show=S https://www.census.gov/programs-surveys/ahs/data/interactive...

ethanbond 6y ago
The price of real estate in an area is set pretty exactly to the level of productivity (i.e. what kinds of jobs you can hold) in that area. So yeah, it all “works out” in that it doesn’t matter if the median person is producing $10 or $15 or $2000 worth of value per hour. The median person will always be “barely making it” given what they must spend to have access to jobs in which they can produce that much value. Look at Palo Alto’s consideration of housing welfare for people earning $150k - $250k/yr. Inequality grows as more people max out their individual productive potential, but real estate prices keep rising because the few hyper-productive peoples’ ceilings have not been hit yet.
- guessbest 6y ago
  The price of real estate is set to pretty nearly the salary of two people. The college educated live in different sections of the city from the high school educated. In nearly all instances families survive on two incomes.
- ac29 6y ago
  > Palo Alto’s consideration of housing welfare for people earning $150k - $250k/yr. This sounds like an exaggeration, this 2020 article puts "low income" housing at a household income of less than ~$70k: https://www.paloaltoonline.com/news/2020/01/17/palo-alto-boosts-affordable-housing-project-with-105-million-loan https://www.paloaltoonline.com/news/2020/01/17/palo-alto-boo... My experience in looking into this in the past is that there are maybe tens of units of this sort in development at any given time, orders of magnitude less than the number of people who would qualify. With wait lists easily exceeding 10 years, for all practical purposes these units dont exist.
  - ethanbond 6y ago
    I only remember this from when I was living in Palo Alto: https://sanfrancisco.cbslocal.com/2016/03/22/250k-per-year-salary-could-qualify-for-subsidized-housing-under-new-palo-alto-plan/ https://sanfrancisco.cbslocal.com/2016/03/22/250k-per-year-s... Wasn’t able to quickly find what the actual current number is (or if it just varies by development). But yes, obviously qualifying on even $70k would sound insane in most of the country. The point is that higher productivity = higher rent = real lifestyle gains that are nowhere near proportional to real productivity gains.
    - goliatone 6y ago
      In San Francisco, San Mateo, and in Marin households making $117,000 would actually qualify to live in low-income housing projects https://sanfrancisco.cbslocal.com/2018/06/26/hud-117000-low-income-san-mateo-san-francisco-marin/ https://sanfrancisco.cbslocal.com/2018/06/26/hud-117000-low-...
- null000 6y ago
  This doesn't need to happen, but this is the logical conclusion when we ensure most of the housing market is controlled by landlords rather than owned directly by the people living there. Also, when you turn housing into an investment vehicle. Also, remove any and all public housing alternatives. Also fail to build enough housing to create competition in the housing market. Also demolish housing stock serving poorer residents. Also fail to provide the transportation network to make transit from the suburbs cheap and easy. Also concentrate a bunch of upper-middle-class people in an area suffering from all of the above problems.

by ac29 6y ago

ethanbond 6y ago

The price of real estate in an area is set pretty exactly to the level of productivity (i.e. what kinds of jobs you can hold) in that area. So yeah, it all “works out” in that it doesn’t matter if the median person is producing $10 or $15 or $2000 worth of value per hour. The median person will always be “barely making it” given what they must spend to have access to jobs in which they can produce that much value. Look at Palo Alto’s consideration of housing welfare for people earning $150k - $250k/yr. Inequality grows as more people max out their individual productive potential, but real estate prices keep rising because the few hyper-productive peoples’ ceilings have not been hit yet.

guessbest 6y ago
The price of real estate is set to pretty nearly the salary of two people. The college educated live in different sections of the city from the high school educated. In nearly all instances families survive on two incomes.
ac29 6y ago
> Palo Alto’s consideration of housing welfare for people earning $150k - $250k/yr. This sounds like an exaggeration, this 2020 article puts "low income" housing at a household income of less than ~$70k: https://www.paloaltoonline.com/news/2020/01/17/palo-alto-boosts-affordable-housing-project-with-105-million-loan https://www.paloaltoonline.com/news/2020/01/17/palo-alto-boo... My experience in looking into this in the past is that there are maybe tens of units of this sort in development at any given time, orders of magnitude less than the number of people who would qualify. With wait lists easily exceeding 10 years, for all practical purposes these units dont exist.
- ethanbond 6y ago
  I only remember this from when I was living in Palo Alto: https://sanfrancisco.cbslocal.com/2016/03/22/250k-per-year-salary-could-qualify-for-subsidized-housing-under-new-palo-alto-plan/ https://sanfrancisco.cbslocal.com/2016/03/22/250k-per-year-s... Wasn’t able to quickly find what the actual current number is (or if it just varies by development). But yes, obviously qualifying on even $70k would sound insane in most of the country. The point is that higher productivity = higher rent = real lifestyle gains that are nowhere near proportional to real productivity gains.
  - goliatone 6y ago
    In San Francisco, San Mateo, and in Marin households making $117,000 would actually qualify to live in low-income housing projects https://sanfrancisco.cbslocal.com/2018/06/26/hud-117000-low-income-san-mateo-san-francisco-marin/ https://sanfrancisco.cbslocal.com/2018/06/26/hud-117000-low-...
null000 6y ago
This doesn't need to happen, but this is the logical conclusion when we ensure most of the housing market is controlled by landlords rather than owned directly by the people living there. Also, when you turn housing into an investment vehicle. Also, remove any and all public housing alternatives. Also fail to build enough housing to create competition in the housing market. Also demolish housing stock serving poorer residents. Also fail to provide the transportation network to make transit from the suburbs cheap and easy. Also concentrate a bunch of upper-middle-class people in an area suffering from all of the above problems.