The Housing Crisis Goes Suburban

[MountainLaurel]

In the past five years, housing prices in Fairfax County have grown 12 times as fast as household incomes. Today, the county's median family would have to spend 54 percent of its income to afford the county's median home; in 2000, the figure was 26 percent. The situation is so dire that Fairfax recently began offering housing subsidies to families earning $90,000 a year; soon, that figure may go as high as $110,000 a year.

Seventy years after President Franklin D. Roosevelt declared that the Depression had left one-third of the American people "ill-housed, ill-clothed and ill-nourished," Americans are well-clothed and increasingly overnourished. But the scarcity of affordable housing is a deepening national crisis, and not just for inner-city families on welfare. The problem has climbed the income ladder and moved to the suburbs, where service workers cram their families into overcrowded apartments, college graduates have to crash with their parents, and firefighters, police officers and teachers can't afford to live in the communities they serve.

Homeownership is near an all-time high, but the gap is growing between the Owns and the Own-Nots -- as well as the Owns and the Own-80-Miles-From-Works. One-third of Americans now spend at least 30 percent of their income on housing, the federal definition of an "unaffordable" burden, and half the working poor spend at least 50 percent of their income on rent, a "critical" burden. The real estate boom of the past decade has produced windfalls for Americans who owned before it began, but affordable housing is now a serious problem for more low- and moderate-income Americans than taxes, Social Security or gas prices.

Yet nobody in national politics is doing anything about it -- or even talking about it.

http://www.washingtonpost.com/wp-dyn/content/article/2006/08/25/AR2006082501197.html

[SheilaT]

1. I can never figure out how some places

(California is the notorious example) can have housing prices that are so much out of line with actual incomes. I believe that Fairfax County is one of the wealthiest counties in the country. Nonetheless, housing subsidies to families earning $90,000 to $110,000 per year is a real clue that housing prices there are insane.

I think the reason no one in national politics is talking or doing anything is that they all benefit from these rises.

The DC area will ALWAYS be a growth market no matter what happens elsewhere because there's a steady turnover of people every two years.

[MountainLaurel]

2. Nowawdays

A lot of it comes down to the questionable mortgages people get in order to afford housing, or they're people who had bought something before prices went insane and are now rolling that money back into a new property.

[soothsayer]

4. turnover isn't growth

but we do have growth

[NVMojo]

7. appraisers, RE agents, banks, mortgage companies, and more

are all part of this highway robbery that makes it so easy to yoke someone to this sort of debt load during a practically non-bankruptcy environment.

[katty]

9. here in LA and all over CA housing prices & 'gentrification' is

pandemic - especially evictions and gentrification is not just gobbling the low income neighborhoods on the monopoly board-they are targeting middle class neighborhoods with older houses, older condos/apts - these neighborhoods are still thriving and people have known each other for years, sometimes decades. The middle class is now the target and the poor and low income areas have always been pushed out of their neighborhoods for 'development'/gentrification. It is hard for property owners to turn down the big bucks from greedy developers. Also, we have had a large influx of Europeans that have money to drop in high end real estate markets-they want winter/summer homes by Santa Monica beach and prefer the neighborhoods look 'euro' tourist ready (we have 'euro' taxis,now) so their friends can come over and stay awhile.

[Jed Dilligan]

3. Be careful with that...

Affordable housing is NOT a popular issue, not even here on DU. People are still too invested, literally and emotionally.

[Warpy]

5. I live in an affordable area

And you can still find houses here for under $100,000, if you're not too particular. They'll need a lot of work and they're post WWII cracker boxes, but the area is the most convenient in the city and has exported its crime in the last 10 years to the more "desirable" areas.

You'd never know it if you looked at zillow.com, though. My own crackerbox is listed at $253,000. One down the street, on the market for $159,000, is listed at $290,000 by Zillow.

Personally, I think these "dream comps" are part of what is driving an insane market.

[Igel]

12. You can find houses in Houston

for under 100k. Some in good shape. Some brand new. Not always large, but not bad, either. Larger than what I grew up in.

The neighborhood, however ... sometimes it's a new development so you can't tell. But the surrounding neighborhoods are bad, and you have to wonder.

[oc2002]

6. Housing market in the Washington DC area is INSANE.

It has been driven to the point of absurdity by speculators that buy up anything at any price and put it right back on the market.

There is a day of reckoning comming to this market, it will take down some major investors too, but no worries, no doubt congress will

bail them out and screw the tax payers like they bailed out the SL.

[cliss]

8. I'm going to disagree with 1 point -

the article says that 1/3 of Americans spend 30% of their income on housing. This is considered an "unaffordable burden".

I think the figure is actually higher. I think it's more than 50%, maybe even higher than that for some people.

If you look at home ownership, it's actually quite expensive. You have your mortgage, but you have to add in all the other additional expenses like property taxes, insurance, upkeep, maintenance. Some people are constantly fixing one thing after another until it bleeds them to death.

We had a house which we called our "sinking ship". We were so glad to bail out of that thing.

If you add in home improvement loans or additional mortgages, people are going to be pushed over the edge.

[fencesitter]

10. Yes. I gave up trying to buy a home

By the time my income was up to the point of affording a mortgage, the housing prices had increased tenfold. Down the street from my $1100., 1 bedroom apt, some new townhouses are being built with the ad, "starting in the $400,000'S!" Woohoo! There are no small homes being built here, they're all huge, on small lots, 500, 600, 700,000 and up. Who are these people and what do they do for a living? I'm in suburban Philadelphia in a county that 10 years ago 100,000 would have bought you a very nice home. Not anymore. Even in town, what used to be low income, minority housing, is now out of reach. The county offered a buyer's assistance program for people who qualify, but the stipulation is the home may not be more than 125,000. Ha! guess what? 3000 people qualify for the program but we're all in line for that one-room shack by the tracks. It truly is nuts. I'm pretty much resolved to be renter forever.

[fencesitter]

11. Check these folks out..

http://www.nlihc.org/index.htm

Been a member for five years. They do good work.