Maybe more important than how to afford a house (answer: debt!) is who can afford a house:
Amid all the facts and figures discussed at a forum on affordable housing Saturday, one fact stood out from all the rest: Affordable housing in Connecticut is no longer an issue only for low income earners, but also for those earning middle class incomes.
It was a timely discussion of an issue that is becoming increasingly urgent across the state where housing costs have mushroomed by almost 64 percent between 2000 and 2005, while wages rose 18.5 percent.(Toensing)
The ratio of housing cost increases to wage increases is a pretty shocking figure. Of course, some of the lack of affordable has to do with the real estate bubble, but there's a big piece of it that has more to do with town governments and property taxes.
Towns, especially those lacking sizable industrial bases, need to keep developers building houses in order to expand their property tax base. But they don't want to build houses that might attract families who need a lot of government services, like schools, social services and so on. They also want houses that will deliver more in property tax revenue. Therefore, what gets built is huge homes on big pieces of land that normal families can't really afford. It's not an exaggeration to say that the middle class is being squeezed out of the new home market.
It's also not an exaggeration to say that a lot of middle-income families are buying these homes anyway, which drives them deeper and deeper into debt.
I live in a suburban neighborhood full of little ranch houses on quarter-acre lots. An awful lot of Enfield was built in the 1950s, which is why these neighborhoods exist. New construction across town is very different. My wife and I couldn't afford to live in those homes. Heck, the way prices have increased, my wife and I couldn't actually afford to buy the home we live in now(a recent appraisal has proved that)!- We only bought the place in 2002, but the price has gone up by 69% since.
Until towns and the state figure out a way to get a handle on property taxes, this situation isn't going to resolve itself.
In the meantime, I am not moving.
Toensing, Gale Courey. "Affordable housing now a middle income issue." The Corner Report 7 May, 2006.