‘The cost of living is driving us out’ - Shortage of affordable rentals dwarfs foreclosures

[Herman Munster]

http://www.msnbc.msn.com/id/20776771/

STAMFORD, Conn. - This isn't how Simon and Jennifer Morris envisioned married life — sharing a charity-subsidized suite with four other hard-up families, abiding by a curfew and other rules that make them feel they are back in high school.

But for a working-class couple with two small children, trying to stick it out in their pricey hometown, housing options are few.

They abandoned their previous one-bedroom apartment when the rent rose from $1,200 to $1,425. Public housing has long waiting lists, so they moved into a shelter for dislocated families in a converted YMCA. The goal: Save enough money to move south and buy a home where costs are lower.

Around them, southwestern Connecticut's Fairfield County is booming, due partly to an influx of investment banks. New housing projects routinely cater to the affluent.

"But everybody forgets the poor guy — the one who pumps your gas, who builds your hotel, who bags your groceries," said Simon Morris, a 35-year-old carpenter. "The cost of living is driving us out."

On both coasts of the United States, and many cities in between, hundreds of thousands of renters face comparable plights. The home mortgage crisis has received far more notice, but experts say the ranks of renters with dire housing problems are growing faster than the ranks of defaulting homeowners.

The Center for Housing Policy reports that the number of working-family renters paying more than half their income for housing has soared from 1 million to 2.1 million since 1997. Overall, advocacy groups say there are 9 million low-income renter households and only 6.2 million units they can reasonably afford.

[Neecy]

1. here's another story about the rental market

What happens when people lose their homes and have to enter this rental market?

The results surprise even this surreal estate connoisseur. When Garner began culling the data a year ago, rents might have been high for the average graduate student but they were relatively stable. But in the past few months, the rents seem to have shot up. Average one-bedrooms, which hovered around $1,770 between September 2006 and April 2007, now go for about $1,980. And though two-bedroom prices dropped from about $2,600 in October 2006 to about $2,400 in February of 2007, they have since catapulted up to over $2,900. By the same token, three-bedrooms, which hit an annual bottom at around $2,950 in November 2006, rose to around $3,800 in August.

http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2007/09/14/carollloyd.DTL

[flashl]

2. Maybe this is why it was easier to chance subprimes

Rent was too high.

[valerief]

3. Good point. nt

[Craftsman]

5. Subprime is one of the reasons that the housing and renting is so high

Most people will buy wha t they think they can afford an a monthly payment. Using creative finacing it makes you be able to aget more for less, which drives up the prices for all. Unitl the rates reset.

[flashl]

10. Validation of your comments is found here

The Invisible Mortgage Hand: Analysis of a Society That Forces You Into Debt

[truedelphi]

12. And of course if you buy you get the mortgage dedcution

Doe sit make sense to rent if all around you house prices are going up and you are paying $ 1,000 a month or more just for rent.

The taxes have to be opaid onyour rent - so you really are paying more like $ 1,275 top $ 1,400.

So back in 2002 you decided to buy. Couldn't do it without an ARM and now that those are being re-structured - with many more to be re-structured in Spring '08, you are hurting.

But you will be just as bad off should you go back to renting, as the rentals will have all gone up in price as well.

[AZBlue]

7. Wow. Guess I should be happy mine's only going up $40/month.

[RestoreGore]

4. Recommended...

And with rising water costs, property taxes, etc. it is the renters who are charged more in rents to defray the increases, yet they cannot enjoy any of the pleasures of home ownership. And even in my community a new condominium town is going up that caters to the rich with units going for almost half a million dollars while people struggle with two and three jobs in a family just to be broke at the end of the week. The way the poor in this country are treated is an abomination.

[Mnemosyne]

6. Erie Times News in Erie, PA, link to 'Public Notices" wow!

http://www.zwire.com/site/?MCCatID=1&brd=2285&pag=1002&PubCat=225&dept_id=574639&catList=225&radiusmiles=50&geoloc=16509&AdTypeID=&RecordsPerPage=10

The paper edition had 3 pages of these. Link has 15 pages.

It's bad. I have never seen anything like it in the paper.

[Wcross]

8. The Nashville paper has 3 pages a day now.

A couple of years ago it was at most a half a page. Quite a few people are losing their homes. It is supposed to be a good market here still. If this is a good market I would hate to see a bad one.

[Mnemosyne]

11. It will only keep spreading too.

Such a shame.

[gateley]

9. This is chilling. The problem is systemic. Anybody know what can be done? K&R nt