Why Middle Class Americans Can't Afford to Live in Liberal Cities (Portland: renters, insurance)

[urbanlife78]

Originally Posted by rzzzz

Sure, but the point is. All the "cheap" housing options that are left in Portland are inconvenient to where people actually can get paid well. Or even not get paid well. Based on commute headache, why would someone want to buy a house in St. Johns at all? Virtually all the jobs are downtown/pearl, OSHU and out in the Beaverton area. There is no high paying jobs area that is convenient to St. Johns. That is why it is cheap. However, it isn't actually that cheap. In fact, if you were going to live in St. Johns, why not just live up in Vancouver?

I don't really get your logic abut my friend. Why would he bother with Portland when his house in NJ costs the same as it would in Portland, yet his household income is nearly double what it would be in Portland? That is why NJ is more "affordable" than Portland. The homes are similarly priced, but the salaries are far higher.



Call me crazy, but I have this suspicion that the limited number of houses and the housing costs being too high might be linked in some way...

Bus and driving to and from downtown via St Johns isn't that hard to do, biking is also just as easy. Of course there is also the Portsmouth neighborhood in North Portland that is also a good spot for one looking to buy a house and works downtown.

Well if one chose Vancouver over St Johns, then they would have to deal with two bridges that are loaded with traffic during rush hour and a lack of transit options. Of course St Johns isn't the only place in Portland where one can afford a house and you know that.

Then your friend should stay in Portland, I question if the house he has and the commute he has would be the same in Portland compared to what it is in NJ.

Yet one can still find a house in Portland that is under $300K, we both know that is possible.

[felinius]

Originally Posted by PDXNative2Houston

Some would say in this thread that moving in to a $250K house on $60K combined income is somehow reasonable or responsible...but it's not even close. That's over 4x gross income, that pretty much breaks every house buying rule in the book. You will be living like a family on welfare and food stamps at that level and none the less, at $250K you're looking at a very old house that WILL need a lot of work. It's not going to happen on $60K for too long.

Not sure where the 4x gross income comes from, but from what I've read as I've recently looked at renting/buying : folks should be spending around 1/3 of their salary on housing per month.

$250k is around $1300 a month, which is less than the $1600 that they should budget for housing and leaves much left over. If your spending leaves you into 'welfare' and 'foodstamps', then it's a personal problem and not a problem of not making enough.

[bler144]

Originally Posted by rzzzz

Sure, but the point is. All the "cheap" housing options that are left in Portland are inconvenient to where people actually can get paid well. Or even not get paid well. Based on commute headache, why would someone want to buy a house in St. Johns at all? Virtually all the jobs are downtown/pearl, OSHU and out in the Beaverton area. There is no high paying jobs area that is convenient to St. Johns. That is why it is cheap. However, it isn't actually that cheap. In fact, if you were going to live in St. Johns, why not just live up in Vancouver?

Wow, this thread really took off in the few hours I was away.

The other issue with St. Johns is that the areas of St. Johns that are desirable have largely already undergone significant price appreciation.

It's not quite as bifurcated as Montavilla, but it's similar in that St. Johns contains an area that's gentrified significantly already, and an area where prices remain low because it's not at all desirable (north of Fessenden). Some of that lack of desirability (crime, poverty) could be weeded out with more gentrification, but it's unlikely to happen without much more significant population pressure because you can't easily gentrify away the proximity to the railyard and industry around the ports.

You can disguise the fact that a big stretch of the waterfront is a Superfund site, but the rail noise is pretty apparent.

If you want to stay south of Fessenden and find something in St. Johns for 250k, it's almost certain to be a foreclosure, under 1000 s.f., a fixer, or all of the above. A 3/2 or 4/1 with 1500 s.f. south of Fessenden is going to be 300k and up in the current market.

[rzzzz]

Originally Posted by urbanlife78

Of course St Johns isn't the only place in Portland where one can afford a house and you know that.
Yet one can still find a house in Portland that is under $300K, we both know that is possible.

Well no, i don't know that. That is the whole point. The houses are expensive. Median sale price this year is $330K. Average household income is just over $40K. I'm not just making it up. The creeping un-affordability related to the ratio of income to home price has been in the news at least since 2012. If there was a good inventory of homes greatly under $300K or median salary was closer to $70K than $40K this wouldn't be a topic of discussion.

[bler144]

Originally Posted by felinius

Not sure where the 4x gross income comes from, but from what I've read as I've recently looked at renting/buying : folks should be spending around 1/3 of their salary on housing per month.

1/3 is currently used as the redline metric of affordability in many of these calculations. No one is suggesting you should spend the full 1/3, only that if you're above that line, you've passed into unaffordability.

It's a bit like lead poisoning - the threshold for adults is defined at 10 micrograms per deciliter, but no one's going to suggest you try to take full advantage of the available range and aim for 10.

Personally I think even that 1/3 is far too excessive, but that's a more complex discussion.

[urbanlife78]

Originally Posted by PDXNative2Houston

True. I was comparing apples to apples however as both commutes were from a suburb location through a major corridor and in to and out of downtown.

However yes if you live near a MAX line or can sneak down through the westhills or back by 405 through St. Helens, it may not be so bad.

If your commute involves a natural barrier, that is going to have an issue with commute times by car. This is common with most natural barriers. My guess is your commute in Houston doesn't involve any natural barriers.

[urbanlife78]

Originally Posted by bler144

Wow, this thread really took off in the few hours I was away.

The other issue with St. Johns is that the areas of St. Johns that are desirable have largely already undergone significant price appreciation.

It's not quite as bifurcated as Montavilla, but it's similar in that St. Johns contains an area that's gentrified significantly already, and an area where prices remain low because it's not at all desirable (north of Fessenden). Some of that lack of desirability (crime, poverty) could be weeded out with more gentrification, but it's unlikely to happen without much more significant population pressure because you can't easily gentrify away the proximity to the railyard and industry around the ports.

You can disguise the fact that a big stretch of the waterfront is a Superfund site, but the rail noise is pretty apparent.

If you want to stay south of Fessenden and find something in St. Johns for 250k, it's almost certain to be a foreclosure, under 1000 s.f., a fixer, or all of the above. A 3/2 or 4/1 with 1500 s.f. south of Fessenden is going to be 300k and up in the current market.

Not everyone wants a 3/2 or a 4/1. I know when my wife and I go and buy, it will be a 2/1 with possibly enough room for an ADU in the backyard.

[urbanlife78]

Originally Posted by rzzzz

Well no, i don't know that. That is the whole point. The houses are expensive. Median sale price this year is $330K. Average household income is just over $40K. I'm not just making it up. The creeping un-affordability related to the ratio of income to home price has been in the news at least since 2012. If there was a good inventory of homes greatly under $300K or median salary was closer to $70K than $40K this wouldn't be a topic of discussion.

No one here is saying Portland should be at 100% homeownership or that everyone who lives here should be a homeowner. And the median household income in Portland is $60K, not $40K.

A couple making both minimum wage full time in Portland is making a combined income of $38K, so clearly the median is much higher than $40K.

[PDXNative2Houston]

Originally Posted by felinius

Not sure where the 4x gross income comes from, but from what I've read as I've recently looked at renting/buying : folks should be spending around 1/3 of their salary on housing per month.

$250k is around $1300 a month, which is less than the $1600 that they should budget for housing and leaves much left over. If your spending leaves you into 'welfare' and 'foodstamps', then it's a personal problem and not a problem of not making enough.

4 times 60k gets you what?

You're not factoring in property taxes in to your figure, which takes you to almost $1500/month *just on the mortgage*. Then factor in home maintenance, repairs, etc... Then further factor in what happens if you need to obtain an auto loan? What if you have a child? What if you need to save for retirement? What if you want to take a vacation?

60K in a 250K home is a terrible idea.

[PDXNative2Houston]

Originally Posted by urbanlife78

No one here is saying Portland should be at 100% homeownership or that everyone who lives here should be a homeowner. And the median household income in Portland is $60K, not $40K.

A couple making both minimum wage full time in Portland is making a combined income of $38K, so clearly the median is much higher than $40K.

Wrong. Median household income in Portland is about $40K https://www.google.com/?gws_rd=ssl#q...me+in+portland