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.
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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.
Source
Toensing, Gale Courey. "Affordable housing now a middle income issue." The Corner Report 7 May, 2006.
2 comments:
I have long felt, even though I am a homeowner, that the housing boom on the coast of the United States is no good for our economy and our society in the long-run.
Much of the lack of affordable housing has to do with zoning. Certain towns like Wilton and Greenwich mandate multiple acre lots in large sections of the town. Obviously, if you have one acre zoning, you can build only 640 houses per square mile (and in reality, less than that due to roads and other public access items and lakes, etc).
This has caused high land prices, so when a piece of land is available, it makes sense for the developer to build a very large house on it. It often makes sense to buy a small house, demolish it, and build a big house due to the high land prices.
Other towns do other things to keep families out. Ridgefield is approving various age-restricted housing off of Bennett's Farm Road and where Schlumberger is presently. These townhouse complexes would be open only to those over 55 or 60. That's the only way the town would approve the zoning.
Some towns simply buy land in the name of "open space" to stop additional construction.
What's amazing to me, however, is that many of the same people that advocate unrestricted immigration are the same ones that advocate stricter zoning to prevent more houses from being built.
It's not all regulation, however. Connecticut has Long Island sound bordering to the south, which prevents any sort of sprawl from happening southwards.
Why is it the fault of Stamford that the transportation east of Stamford is screwed up? What is Stamford supposed to do? Tell all the companies not to move there because they create jobs, which creates strain on the transportation system? Is creating jobs now a bad thing?
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