More Americans Choose Between High Rent and Needed Food
|December 12, 2013||Posted by Staff under High Cost of Land|
Since the 1980s, rents (right scale) have risen, while incomes (left scale) have fallen. Both series are adjusted for inflation
If you can’t afford to own, you can rent. But what if you can’t afford to rent, either? Millions of Americans are in precisely that situation. The availability of apartments, especially cheaper ones, hasn’t nearly kept up with demand, and the problem has worsened since the 2007-09 recession.
In 1960, about one in four renters paid more than 30 percent of income for housing. Today, one in two are cost burdened.
“Cost-burdened” means you’re paying more than 30 percent of income for housing and “severely cost-burdened” means you’re paying more than half. By 2011, 28 percent of renters paid more than half their incomes for housing, bringing the number with severe cost burdens up by 2.5 million in just four years, to 11.3 million.
Foreclosed homes have become rental properties. However, soaring demand was more than enough to absorb the 2.7 million single-family homes that flooded into the rental market after 2007.
From a record high of 10.6 percent in 2009, the vacancy rate turned down in 2010 and has continued to slide, averaging 8.4 percent in the first three quarters of 2013.
With little else in their already tight budgets to cut, those with incomes under $15,000 a year spend about $130 less on food — a reduction of nearly 40% relative to those without burdens.
Deterioration is another problem; more than one in five mobile homes was removed from the housing stock from 2001 to 2011.
Ed. Notes: Eventho’ we don’t have enough affordable housing, we still tax it. How much sense does that (property tax) make? And scattered around those stuffed apartment buildings are plenty of vacant lots, kept vacant by speculators and sluggish governments. All those sites could support more housing, which would increase the supply and bring down the cost of residing.
Government should shift the property tax off improvements, onto locations. That’d cut the cost of construction and making improvements. It’d also prod owners to put their land to use. Besides bringing down the cost of putting a roof over one’s head, it’d also create job opportunity in construction and in the businesses that’d occupy some of the new buildings. So the poor could climb up into the middle class.
Try smart tax policy. You’d both raise the amount of housing. And you’d lower the amount of poverty. Now, if only the Harvards of the world had what it takes to point out the obvious. But they’re still stuck in the blind spot regarding land. They still talk about housing when it’s the land — the location — that climbs (then collapses) in value.