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The government regulation has stifled many housing developments, or at least slowed them down. Besides the cost of getting a zoning change, the permits and regulations for environmental issues, fess for infrastructure improvements such as streets and schools, utility facilities, keeping a percentage of trees and open space all add to the cost for the developer. They will then build the most cost effective/profitable homes they can in order to maintain profits. When a 10,000 sf lot will accommodate two 1.3 million dollar 4,000 sf homes it makes no sense to build a low-income apartment building there.
Like you said, just the cost of getting a property going is tremendous. Even around here, with a fraction of the red tape and costs of metro Seattle, you're probably not getting even small new construction for under $200,000. In a town where median household income is in the upper $30k range, that is unaffordable.
The problem is that demand is sufficiently high to support the higher sales prices. The answer is more housing, period.
That brings more negative externalities, of course: saturated roads which cause soul-crushing commutes, bad smog, over-crowded public schools, city services unable to keep up with population expansion, etc. etc. etc.
Personally, I prefer less housing. I think how much better life might be if, say, 20% of the housing stock were never built in the first place.
I'm at the edge of that top 20% HHI in my local area . I'm just a nose above average nationally. $60,000 is good here but it really doesn't go that far. I'll get a whopping 2% raise come the first pp of the year. 2% is our top raise - a performance review below '3' gets evaluated down.
After a 12% 401k contribution, taxes, and other benefits, I clear $3,028 monthly. No one is going to live large here on this.
Rents and property prices are lower than national averages here. That's about all that is lower than national averages, yet the average person's income is significantly below those averages.
I recently bought a condo. Vinyl box outside, but interior was updated well. It was built in 1996. PITI + MI + HOA is under $525/month. It's about half the price of renting a similar unit. If I stay here two years, the delta between renting and owning works in my favor, even accounting for transaction costs on both ends.
My advantages? I'm a quarter mile from the best rookie league baseball stadium in the country. My condo is within a tenth of a mile of the Tweetsie Trail trailhead. I have a place to exercise for free if things get tighter. I can bike (or walk, if I don't mind to hoof it for ~30 minutes) to everything within downtown Johnson City. I can walk to local sushi, local pizza/Italian (owner also owns several farms which supply the restaurants with year-round local produce - it is excellent), "New Southern" (Tupelo Honey Cafe), a new chain brunch joint (First Watch). local Cuban, local BBQ, local German, a local Korean joint, a local taco chain, a food truck gathering spot (a couple of which are to die for), a better than average chain wing joint, local greasy spoon 5 PM - 5 AM diner, a music venue, several city parks, and three breweries. I'm barely over two miles from ETSU. I have a Kroger, regional grocery chain, Earthfare, Fresh Market, Target (not super), Sam's/Walmart, and local Indian/pho within a ten minute drive. I'm within five minutes of a large mountain park within the city limits.
My commute is 25 miles - about 30 minutes - but it's all interstate, and never congested. With my mortgage where it is, I could probably find something to pay it even if I lost my current job.
A lot of things are missing. The shopping sucks compared to where I lived in Indy. It's much more of a college town vibe, not an Alpharetta or Lexington. I can get most of the stuff delivered from Amazon, but not everything. There are compromises everywhere.
Yes, it can be comfortable in small areas, but you have to have a good town to prevent it from sucking. If I was living in the town I was born, raised, and worked in (Kingsport), I'd be miserable as all hell. A college town with more amenities makes being in a small area a lot better. There are plenty of small to rural areas that do not even have a college town like Johnson City within commutable ranges.
I think you're better than 'a nose above the national average'. You're confusing household income with individual income. Google says the median full time weekly wage is $859.00. Multiply that by 52 and I get a bit less than $45K. Median household income (~$60K) is quite a bit higher than median individual income since adults tend to be married. If you married someone with similar comp, you'd be in the top-20% nationally. You'd still struggle in a high COL place but 6 figures is a pretty comfortable life in flyover country. Like usual, the message is get married to your socioeconomic equal, stay married, and you should live a good life.
Anywhere you pick to live is a compromise. I used to live in Portsmouth, NH for a decade. Before that, I lived in one of the leafy inner Boston suburbs with the top school system for a decade. I did the math at age 50 and concluded I couldn't afford to live there and retire. Instead, I'm in a Massachusetts coastal town near Rhode Island where real estate is 1/3 the prices in Portsmouth, NH and the property taxes are 1/5th what I'd pay in Portsmouth, NH for an apples vs apples house. It's 60 miles from affluent Boston and next to a failed city. It has a similar lousy retail issue because the local population doesn't have enough 6-figure income people to support much high end retail. There's a state university in town but it ain't Harvard or MIT. It has other redeeming qualities but it's not like the places I'd lived in for the first 30 years of my adult life. I needed a paid-for roof over my head that wouldn't have high cost of ownership when my income gets slashed as a retiree. My taxes, insurance, and utilities look similar to your mortgage payment. I telecommute so I don't have the daily commute compromise to deal with. I do have to worry about airport access. I only have another half dozen or so work years left so I can make pretty much anything work as long as it pays high tech wages.
I think you're better than 'a nose above the national average'. You're confusing household income with individual income. Google says the median full time weekly wage is $859.00. Multiply that by 52 and I get a bit less than $45K. Median household income (~$60K) is quite a bit higher than median individual income since adults tend to be married. If you married someone with similar comp, you'd be in the top-20% nationally. You'd still struggle in a high COL place but 6 figures is a pretty comfortable life in flyover country. Like usual, the message is get married to your socioeconomic equal, stay married, and you should live a good life.
Anywhere you pick to live is a compromise. I used to live in Portsmouth, NH for a decade. Before that, I lived in one of the leafy inner Boston suburbs with the top school system for a decade. I did the math at age 50 and concluded I couldn't afford to live there and retire. Instead, I'm in a Massachusetts coastal town near Rhode Island where real estate is 1/3 the prices in Portsmouth, NH and the property taxes are 1/5th what I'd pay in Portsmouth, NH for an apples vs apples house. It's 60 miles from affluent Boston and next to a failed city. It has a similar lousy retail issue because the local population doesn't have enough 6-figure income people to support much high end retail. There's a state university in town but it ain't Harvard or MIT. It has other redeeming qualities but it's not like the places I'd lived in for the first 30 years of my adult life. I needed a paid-for roof over my head that wouldn't have high cost of ownership when my income gets slashed as a retiree. My taxes, insurance, and utilities look similar to your mortgage payment. I telecommute so I don't have the daily commute compromise to deal with. I do have to worry about airport access. I only have another half dozen or so work years left so I can make pretty much anything work as long as it pays high tech wages.
$60,000 is top 25% HHI here. If I married someone making what I do, we'd be top 7% locally, but it wouldn't feel like a top 7% lifestyle IMO. You'd have a decent house, but with two cars, retirement savings, kids, etc., it'll go fast.
The median HHI here is just $38,000. Where do those people live? I wouldn't say there is a "housing crisis" locally, but $38,000 ain't a lot to work with anywhere you go. The flip side of that is that it's awfully easy to be better than the median here if you're in a relationship. This would be less than $10/hr for two adults in a relationship working full-time per person. That's not a difficult goal to meet.
Most of the guys I worked with in the associate level role I took at the Boston-based tech company started at $80,000, but live worse than I do. One guy was living in a rooming house with four other guys, and still paying about $800/month in rent. Several were far out on 3 all the way to Nashua. One guy was from China and his girlfriend has a great biotech job and they are in a condo not much different than mine.
Metro Boston and podunk Tennessee are two extremes. There are plenty of medium to mid-major metro areas in the interior of the country where housing isn't much more expensive than here, but are more affluent and the housing is more in reach of the average person.
It is painfully obvious that "the market" has NOT fulfilled demand.
High demand for RE results in high prices, forcing poor people out of the market. The market certainly does fulfill demand for those who are able to pay.
The sensible market solution for poor renters is to move to where housing demand is lower, or increase their income. Either works.
Most of the people I know in California would have lost their homes by now without prop 13. A house bought for a modest sum can suddenly be worth millions during an investment bubble, even tacky little ranch homes on postage stamp lots if the location is right. The taxes on the bubble-valued real estate can be astronomical. Taxing people en masse out of their houses which they legitimately bought and paid for is not a scenario that's compatible with the American philosophy of property rights.
Those "poor" unfortunate folks experienced a multimillion $$$ windfall via RE appreciation. And we are supposed to feel sorry for them? Worst case they get a equity loan to pay their tax bill. They don't lose their home.
Sensible taxing on RE is to base it on value. If the values rise faster than COL (services provided), then the rates in % should drop for everyone.
Those "poor" unfortunate folks experienced a multimillion $$$ windfall via RE appreciation. And we are supposed to feel sorry for them? Worst case they get a equity loan to pay their tax bill. They don't lose their home.
Sensible taxing on RE is to base it on value. If the values rise faster than COL (services provided), then the rates in % should drop for everyone.
They can also leave with their million in equity and retire somewhere else and live like kings. All for the privilege of being in California.
rruff is right. A few sad stories have resulted in screwing everyone who's bought in recent decades or might want to. I say that as a property owner (in another state). But hey, **** everyone else, right?
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
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Originally Posted by Serious Conversation
$60,000 is top 25% HHI here. If I married someone making what I do, we'd be top 7% locally, but it wouldn't feel like a top 7% lifestyle IMO. You'd have a decent house, but with two cars, retirement savings, kids, etc., it'll go fast.
The median HHI here is just $38,000. Where do those people live? I wouldn't say there is a "housing crisis" locally, but $38,000 ain't a lot to work with anywhere you go. The flip side of that is that it's awfully easy to be better than the median here if you're in a relationship. This would be less than $10/hr for two adults in a relationship working full-time per person. That's not a difficult goal to meet.
Most of the guys I worked with in the associate level role I took at the Boston-based tech company started at $80,000, but live worse than I do. One guy was living in a rooming house with four other guys, and still paying about $800/month in rent. Several were far out on 3 all the way to Nashua. One guy was from China and his girlfriend has a great biotech job and they are in a condo not much different than mine.
Metro Boston and podunk Tennessee are two extremes. There are plenty of medium to mid-major metro areas in the interior of the country where housing isn't much more expensive than here, but are more affluent and the housing is more in reach of the average person.
According to that NY Times chart we are in the top 16%, but our income is about $50k/year under the median household income in our city which is the top 7%. We could never afford to buy our house at the current value, fortunately it was right in our price range when we bought it 24 years ago so our mortgage payment is less than half of what people moving in around us have to pay. They are not having any trouble with that though, because of the growing number of high pay jobs in the Seattle area, but that adds to the demand and keeps the prices going up even more.
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