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In Portland, those low-income renters tend to have long commutes (esp those who use transit) and live far from their jobs. Because the cheap housing and the jobs tend to be in different parts of town.
Bingo. It's not that there isn't affordable housing available, it's that it's beyond the bounds of the worst commutes people will accept. As a result, the housing that is just within the 'accessible' region gets bid up the to maximum people are willing to pay - which seems to be in the 50% of income range.
There's definitely a disconnect going on, but it's much more complex than 'lack of affordable housing'.
Bingo. It's not that there isn't affordable housing available, it's that it's beyond the bounds of the worst commutes people will accept. As a result, the housing that is just within the 'accessible' region gets bid up the to maximum people are willing to pay - which seems to be in the 50% of income range.
There's definitely a disconnect going on, but it's much more complex than 'lack of affordable housing'.
For "extremely low income" (<30% of median family income), there is no affordable unsubsidized market rate housing anywhere in Portland.
The problem with paying 50% of your income for rent is that it's not sustainable, and any financial hiccup can unravel your life, e.g. a major car breakdown can leave you jobless if your workplace is not accessible by transit.
Deport about 12 million people who are in the USA illegally (by some counts as much as 25 million), and watch what happens to rent and the price of housing.
If the private sector efficiently alloocates [SIC] resources...Why does the private sector fail so miserably at providing an adequate supply of affordable housing?
Aside from clear trolling, shows a fundamental lack of understanding of economics (this is the economics forum, after all).
You might as well ask the question, "if the private sector efficiently allocates resources, why does the private sector fail so miserably at providing an adequate supply of affordable:
Rolls-Royces?
Rolex watches?
300-foot yachts?
First growth Bordeaux?
Every reputable economist agrees that the free market system does, indeed, allocate resources quite efficiently. When a builder builds a personal residence, he uses concrete for the foundation; to purchase concrete for the foundation, the home builder competes in the marketplace with other businesses & individuals who want concrete for other uses (say, to build an office building or restaurant or even to manufacture concrete furniture). The highest bidder for concrete assures that concrete is allocated to its highest value-add use. The same is true for framing lumber, cabinetry, carpet and the like.
So, the private sector indeed does efficiently allocate resources quite efficiently. In The Age of Turbulence, for example, Greenspan discusses his experience providing consulting & advice to China to help them move from a central planned economy to a market economy. He gives insightful anecdotes about how a governmental regulator used to have his days consumed with deciding how much of the day's fish catch would go to various public & private entities that wanted to purchase fish. Visiting the same regulator 5 years afterwards, the man said, "My work is so much easier now - I don't have to allocate the fish, because buyers and sellers come together in the marketplace and fish is auctioned. It is so much better now; everyone is happy."
Of course, everyone knows that when it comes to residential housing, governmental regulation and intervention increases its price.
What do we get for that increased price? Compliance with various standards such as building codes. Most reasonable people would say that is a good thing.
Sometimes the financing of the public sector gets in the way. For example, a residential builder might wish to build residences on land - but the town refuses to issue permits, preferring that the builder build retail shops because the latter generate sales tax revenue for the city. This constricts supply and of course raises the price.
So at the end of the day, we know that the private sector does allocate resources efficiently. You just don't like the outcome.
I have a dream, that one day, the ability of our children to live in safe, decent neighborhoods, will be based not on the content of their pocketbook but on the content of their character.
Much has to be said about someone's character when they are making minimum wage flipping burgers when they are in their 40s.
Also, you have to realize that 30% is just a number a bureaucrat came up with decades ago. The average family in London spends around 60% of their income on housing. It's just normal to be "severely burdened" there for all families, not just the poor.
I'm all for more affordable housing. I'd like to see more things like Apodments and boarding houses (pretty much only now available legally as sober living). What I'm not for at all is how America does affordable housing, which isn't affordable housing at all. It's just afforded by someone else housing.
Get a roommate in a nice part of town or close to work (thus killing your commute time and your crime rates). You could also move to a different state with the same job (request a transfer) as this would provide you with areas that have lower costs of living. Have you considered the Mountain Region or the Midwestern region? Much lower costs of living than in Portland. In South Dakota you have decent apartments where even a minimum wage hourly pay would go a longer way.
I make less than the average US worker a year, but I do make more than minimum wage. When I started working I made minimum wage, which was $7.25/hr at the time. I now make $20 an hr. That's within a time span of 8 years. I mention this because I am about to move to a state where I will make less money, but the cost of living is much lower (I live in Chicago and moving to Michigan) that my ratio of wages to housing will actually decrease, meaning I keep more money. Not about how how you make, but how much you keep. I know broke people making $80k a year because they suck at budgeting and if they lost their job tomorrow they would be homeless. If I lost my job tomorrow I would be good for at least 8 months to pay cost of living (rent, food, utilities) if I never collected unemployment. Anyway, my point is that sometimes you might want to find greener pastures because some states have greater opportunities when it comes to work, far lower crime rates, and cheaper costs of living if you can do without city living or having much to do. But I would rather live in some quiet boring place where I keep most of my money rather than some overpriced, overhyped city where my money goes down the toilet to make someone else rich while I struggle.
Deport about 12 million people who are in the USA illegally (by some counts as much as 25 million), and watch what happens to rent and the price of housing.
DING DING DING that's what I've been saying for years. The flip side of that, of course, is that the real estate sector has a HUGE incentive to support illegal immigration and amnesty so the political playing field is tilted against the working class that bears the costs.
Aside from clear trolling, shows a fundamental lack of understanding of economics (this is the economics forum, after all).
You might as well ask the question, "if the private sector efficiently allocates resources, why does the private sector fail so miserably at providing an adequate supply of affordable:
Rolls-Royces?
Rolex watches?
300-foot yachts?
First growth Bordeaux?
Every reputable economist agrees that the free market system does, indeed, allocate resources quite efficiently. When a builder builds a personal residence, he uses concrete for the foundation; to purchase concrete for the foundation, the home builder competes in the marketplace with other businesses & individuals who want concrete for other uses (say, to build an office building or restaurant or even to manufacture concrete furniture). The highest bidder for concrete assures that concrete is allocated to its highest value-add use. The same is true for framing lumber, cabinetry, carpet and the like.
So, the private sector indeed does efficiently allocate resources quite efficiently. In The Age of Turbulence, for example, Greenspan discusses his experience providing consulting & advice to China to help them move from a central planned economy to a market economy. He gives insightful anecdotes about how a governmental regulator used to have his days consumed with deciding how much of the day's fish catch would go to various public & private entities that wanted to purchase fish. Visiting the same regulator 5 years afterwards, the man said, "My work is so much easier now - I don't have to allocate the fish, because buyers and sellers come together in the marketplace and fish is auctioned. It is so much better now; everyone is happy."
Of course, everyone knows that when it comes to residential housing, governmental regulation and intervention increases its price.
What do we get for that increased price? Compliance with various standards such as building codes. Most reasonable people would say that is a good thing.
Sometimes the financing of the public sector gets in the way. For example, a residential builder might wish to build residences on land - but the town refuses to issue permits, preferring that the builder build retail shops because the latter generate sales tax revenue for the city. This constricts supply and of course raises the price.
So at the end of the day, we know that the private sector does allocate resources efficiently. You just don't like the outcome.
My question was a setup; you have nailed precisely what I was getting at.
Yeah, America DOES reward financial failure in individuals:
Chapter 13 and 7 bankruptcy laws.
IRS Offer In Compromise codes
Easy access to low interest student loans
30 year mortgages with little or no down and low interest rates backed by the Federal Government
Medicaid
Public schooling
Earned Income Tax Credits
And it goes on and on, and on. . . . . .
The gov't rewards failure ,i said that .
Private sector does not.
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