Housing Policy

The 'Affordable Housing' Bait and Switch, California Style

Redefining language to arrive at anti-market solutions to government-exacerbated problems

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Trigger warning: Song contains "Mexicans," "homosexuals," and "idle rich." |||

Scott Timberg, a journalist whose work I enjoy, has a much-discussed piece out in Los Angeles magazine about coming to the realization that prices and economic realities are squeezing him out of his beloved L.A. It's a personal essay about status-backsliding, so it may seem unsporting to use it as a jumping-off point to talk about related policy concerns, but there are important government failures contributing to Timberg's ennui that really deserve more attention than they typically receive from Southern California's political class.

The first has to do with one of the most abused phrases in the political lexicon, affordable housing. Sample from Timberg's essay:

For many of us in Los Angeles—a metropolitan area that 57 percent of Angelenos can't afford to live in, according to a recent study—this is a city from which we are constantly on the brink of slipping away. Average rent in L.A. is $2,550 for a two-bedroom apartment. In fact, the disparity between wages and market prices here is the worst in the country, nastier than in New York City or the Bay Area, and it's become the toughest American city in which to buy a house.

My eyes hurt. |||

Bolding mine, to highlight what has become an absurd anti-tautology. Which is to say, on some basic level, if you live in a city, you can by definition afford to live in a city, because you are successfully, um, living in the city (that is, if you are still making rent or mortgage payments, and not sliding into bankruptcy or extreme indebtedness….Timberg's status on those fronts is vague aside from his ominous statement that "I lost my house in 2011"). You might be paying a disproportionate amount of your income on housing compared to people in other cities, and that's an important consideration (on which more below), but the word "affordable" in this case is a value judgment affixed by agenda-wielding outsiders to the individual choices of participants on the ground.

The source of that 57 percent "unaffordable" number is the Economic Policy Institute (EPI), whose lengthy presentation of the underlying data includes this verbiage:

Over the past several years, as congressional inaction has led to continued erosion in the purchasing power of the federal minimum wage, a substantial number of states and cities have enacted higher minimum-wage laws. These increases, while not eliminating the need for a higher national wage floor, do help to ensure that regular employment provides the means to achieve a decent quality of life. Cities, in particular, that have raised local minimums have often done so in explicit recognition that higher costs of living in those areas require higher wage standards so that workers there can still meet their basic needs.

This explicit advocacy does not mean EPI's data is suspect, but there's an agenda here, and a whole lot of assumptions and choices built into the research. For instance, while the group boasts of adjusting its EPI Family Budget Calculator to reflect the cost-of-living disparities "in over 600 specific U.S. communities," using the actual tool shows exactly one such community within L.A. County, the "Los Angeles-Long Beach CA HUD Metro FMR Area." Given that L.A. County has 88 municipalities and 10 million residents, and an immense geographical spread in average home listing prices—between $9,175,930 for Bel Air and $126,307 for Palmdale, with more than 100 different zip codes currently clocking in at under a half-million dollars—standardizing affordability conclusions across those 10 million individuals strikes me as less than fully sound.

You can get more tailored geographical income/housing data at the L.A. Times and Harvard's Joint Center for Housing Studies, both of which come to pretty grim conclusions about Southern California's priceyness. For instance,

Just about half (49.8 percent) of all households in metro LA spend more than the recommended 30 percent of income on rent or mortgage payments and more than a quarter (25.9 percent) are spending at least half their income

Bolding in original. That's certainly a big number, and part of the reason that Southern California's population is no longer growing, after more than a century of constant boom. But do those facts really merit headlines such as "Every Single Part of LA is Unaffordable at $13.25 an Hour," or (my favorite) "A full-time minimum-wage job won't get you a 1-bedroom apartment anywhere in America"? No, it doesn't. A full time minimum wage job in California nets you $1,440 a month; I just found a one-bedroom in Los Angeles on Apartments.com for $350, and I hear there are cheaper cities in the state. Also, the word "affordable" does not equal "costing less than the recommended 30 percent of income," no matter how many times people repeat that claim.

For instance, according to the authors of those headlines and studies, I could not "afford" to live in Los Angeles between 1998 and 2005, even with rents that never eclipsed $1,400. And yet, somehow, I did. At different stages of your life, you are willing to bet on spending higher percentages of your income for the privilege of living in an advantageous area, just as sometimes you will accept a low wage in exchange for near-term upside. A crucial part of those bets is the belief that more lucrative income opportunities lie just around the corner. Maybe, for example, you have heard of a little thing called the California Dream?

In my experience, the people most likely to expand the definition of "unaffordable housing" are maddeningly unable to tell you how many affordable units there are out there. They tend to, without any noticeable sense of self-awareness, have the most political clout precisely in polities that are the most expensive to live in. They are also the most likely to push for three specific proposals to address the situation: raising the minimum wage, stabilizing or controlling rents, and requiring real estate developers to build lower-income units in new buildings. Each of these are attempts to advance social policy by restricting the behavior of businesses, rather than removing governmental constraints on the private-sector supply of housing.

There are other policy failures contributing to the predicaments identified and lamented by Timberg. For example:

It's no surprise that when you have kids, making the pieces fit is especially difficult, as novelist Katharine Noel puts it. She wrote in a corner of her Los Feliz living room while her husband, Eric Puchner, also a writer, toiled in a corner of the bedroom. They spent four to six hours a week commuting to their teaching jobs in Claremont, concluding that they would not ever be able to buy in a decent school district for their two kids

Bolding mine. The lack of quality Los Angeles Unified School District schools in neighborhoods more affordable than Los Feliz (where my wife and I, too, both worked at home in a small apartment) is an ongoing public-policy outrage, largely perpetuated by the existing political class (with some notable exceptions). Though it's also true that the type of people attracted to Los Feliz generally wouldn't be caught dead buying a house in the presumably better-schooled (and considerably more affordable) Claremont. At any rate, bad schools are a brake particularly on the lives of the children sentenced to them, and should inflame the passions of good citizens above and beyond their own neighborhood anxieties.

Underlying everything in both Timberg's piece and the wage/housing disparity he describes, is the economy:

Los Angeles and California were hit especially hard by the Great Recession, and the damage lingered longer than almost anywhere else. L.A. County's unemployment rate was up around 12 and 13 percent for years, and along the way hundreds of thousands dropped out of the labor force entirely.

Huh. And what, exactly, made California so different?

I wish Scott Timberg the best, and recommend his writing to future employers. And I hope California adopts policies that will make housing more affordable by explicitly rejecting the wishlist of its "affordable housing" advocates.

NEXT: Blogging judge calls political candidate "unfit" for office

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  1. Will someone please explain to me why the city or state won’t raise the minimum wage to the point where people can afford oceanfront condos? Or is that somehow unreasonable?

    1. Don’t we all have a right to the best views?

    2. I can explain it to you – but I can’t understand it for you.

      1. Have you been watching Tern Beach Movie 2? Because that line is from TBM2*.

        Part of the curse of having kids is at some point being subjected to movies like Teen Beach Movie 2.

    3. Koch brothers, FoE. It’s always them. And also GOP, which we well know holds California in iron grip.

    4. Condos? To what kind of hellish privation would you subject these captains of burger-flipping industry? Nay, sir. The wage should be raised until it can afford tri-level oceanfront homes with swimming pools.

      1. According to Hollywood movies, isn’t that where the American middle class lives?

  2. If this were about publicly funded stadiums I would have expected a moving the goalposts pun…

  3. Matt’s response to affordable housing is a burning cross.

  4. OT: We are the worst! (and not just because Nikki lives here)

    http://mercatus.org/statefiscalrankings

  5. I just found a one-bedroom in Los Angeles on Apartments.com for $350

    “This is for storage only, this unit is not to be lived in.”

    The other two units at $500 are for a “room” only.

    1. Amusingly, the same search in Buffalo yields nothing. It wasn’t so long ago $500 could get you a huge house there.

      1. True, but you can get a studio with all utilities, cable, and AC for $579, or you could find a roommate or two and get a two or three bedroom apartment for $600 or less.

    2. “You wanna live in the box, cost you $350 a month.”

      “Thank you, kind innkeeper.”

  6. “They spent four to six hours a week commuting to their teaching jobs in Claremont,…”

    That’s 24 to 36 minutes each way if they work five days.

    1. Yeah, sweet commute.

    2. Does any comment reveal what entitled little shits they are more than that? Plenty of people who don’t live in LA (if you consider that a good thing) or another big city make that commute everyday, or even longer. I have to do it.

      What’s really funny is that these are the people who want to mimic public transportation like that of Japan and Europe. Those Japs spend crazy time commuting on packed trains too and from. Twice what they do.

      1. The Japanese would be spending even more time commuting if they all drove cars – those times (and I assume you’re referring specifically to Tokyo) are a function of the size of the city, not the means of getting around it.

        1. no. it’s because they aren’t delivered near their homes or work places. they’ve got to walk to the station, or bus station to the station, and then hoof it to their work, etc.

          1. The hoofing it adds maybe 10 minutes at each end. What I’m talking about is they live in a city that is bigger and far more dense than any American city. They pack themselves into trains because they have to. You’re not going to put them all into cars America-style unless you tear down half the city and replace it with freeways and parking lots.

            1. This is true. Germans and Japanese generally live more ‘centrally’,closer to where they work than Americans; they are less suburban, which kind of comes with the territory of having a densely populated country.

              In the US, for luxury and status, we buy or build big houses out in the burbs. In Japan and Germany, however, they tend to buy smaller houses or apartments and instead they derive their luxury (or status) from spending their disposable income on nice vacations. That’s what you do with disposable income when you have limited space I guess. Hence why Japanese and Germans are so over-represented among international tourists.

              1. Those may be factors but gas prices for Germans and Japanese are a huge factor as well.

              2. This is true. Germans and Japanese generally live more ‘centrally’,closer to where they work than Americans

                Absolutely not. While Japan is more urbanized than the US, Germany and much of Europe are less urbanized.

                1. I have lived in Germany – this is nonsense.

  7. too many people want to live where I want to live

    the developer won’t let developers build more houses (cause that would ruin where I want to live)

    so rich people are pricing me out of the market where I want to live

    the system is broken and rich people are evil

    1. What even is “economics?”

      1. do you even economics, brah?

  8. “A full-time minimum-wage job won’t get you a 1-bedroom apartment anywhere in America”

    So a full-time minimum wage job WILL get you studio apartment? Sweet! That’s better than anywhere else on the fucking planet!

    1. What about sharing? Isn’t that the progressive way. Get some roommates like I did, thirty to forty years ago, when I was starting out.

      1. Get some roommates like I did, thirty to forty years ago, when I was starting out.

        Something something LIVING WAGE something FAMILY OF 4 something something FAIR SHARE something

        /Prog frothing at the mouth

    2. That’s somebody who simply doesn’t know what he’s talking about.

      Here (Yuma, or Somerton actually) you can get a 1 bedroom for around $450. A 1000-1250 sqft house rents for around $700.

    3. I question the assertion actually. If one works full time min wage that’s about, what, 17-18,000? If I take my lowest pre-tax annual income (fairly recent actually), subtract the 10% that goes into my retirement, subtract the money I pay for health insurance (I assume if I made that little I’d qualify for medicaid), and found a studio apartment as cheap as my first apartment in the city where I live (a little over ~$450 per month), I think I could live on 18,000 a year. And I live in a decent sized city; it’s not New York, but it’s not Gary, Indiana either.

      I would be curious to try and live on even $15,000 a year on my own. Wouldn’t be very fun, but I think I could find a city somewhere where I could at least get pretty close.

  9. Los Angeles is a perfect example of central planning gone ammok. When I lived out there, it was nearly impossible to build new houses unless you were one of those billionaire developers in bed with the local councils and getting a great deal on land near the new lightrail terminal.

    In other cities, once land becomes scarce (either through a lack of land, or a lack of land reasonably close to major population centers) people start building up. But most nice communities in the LA area make it very difficult to build multi-tenant housing. It is extremely expensive to build condos unless you are in a very narrow community center and (again) those tend to be reserved only for well connected developers. Add on top of that the ridiculous costs of compliance and you have a place where they can never meet demand.

    1. ^^ ThisThisThisThisThis

  10. Damn, I lived there for a couple years in the early 90’s. I think were were paying under $1k for a decent 2 bedroom in Playa.

    Was back there 2 weeks ago for meetings. When I first got in the rental car I thought “gas is about 20 cents more than New Jersey.” The I realized it was $3.80 a gallon not 2.80.

  11. Given that L.A. County has 88 municipalities and 10 million residents, and an immense geographical spread in average home listing prices?between $9,175,930 for Bel Air and $126,307 for Palmdale, with more than 100 different zip codes currently clocking in at under a half-million dollars?standardizing affordability conclusions across those 10 million individuals strikes me as less than fully sound.

    There’s a lock of affordable housing where I want to live.

    1. Finally! A comment that went through!

      1. OK – so not just me having squirrel issues with the comments…

    2. In the actual LA metro area, where I am doomed to live for the foreseeable future, I can’t find a house or condo for less than 600k in an area that I would want my kids living, especially if I only want a 45 min commute both ways for work. Definitely affordable, this city.

      1. I live in the DC burbs, which are as bad, if not worse, than LA.

        We found a halfway decent neighborhood, close in. It’s far from ideal and the house is tiny. We’ve maxxed it out with 4 people.

        We manage. Everyone’s survived.

      2. Oh, and I haven’t had a commute under 45 minutes in 20 years.

        First to DC, now to Bal’mer. Ill take the Bal’mer commute any day of the week over the DC commute. Commuting to DC is a thing of nightmares.

      3. in an area that I would want my kids living

        Just checking…you’re aware you’re not entitled to buy someone else’s property for less than market rate, right?

        I just can’t take seriously anyone who bitches about how the convenient and desirable neighborhood in which they want to live is also popular with other potential residents, and therefore costs more.

        1. Yeah, why shouldn’t people want their kids going to school in a glorified holding cell for future criminals?

          1. Please explain how expecting you to pay the fair market rate for your housing, determined by the desirability of the neighborhood in which you want to live, is equivalent to forcing your kids to go “to school in a glorified holding cell for future criminals.”

            It’s not Joe Property Owner’s fault that you chose to have kids. Providing a safe, nurturing home for your children, in a safe neighborhood where people share your values, is entirely your responsibility. Nobody owes you discounted or free housing for breeding.

            Take your time explaining. I’ll wait.

  12. “A full-time minimum-wage job won’t get you a 1-bedroom apartment anywhere in America”

    It’s almost like they’re incapable of picking a random not-great city in a red state and googling cheapest apartments. Here’s what I found in under 1 minute:

    Monaghan ApartmentsSave
    Killeen, Texas 76541
    From $380 | 1 Bed

    1. Killeen is the home of Ft. Hoodand their is plenty of land available in the area. Unlimited amount for single family or multi for all practical purposes.

      Tons of low paid soldiers moving in and out. For whatever that is worth to the conversations.

      There are probably as many pawn shops per capita than anywhere else I’ve ever seen.

  13. Equating Palmdale with cheap housing for the rest of LA is disingenuous. It’s 60 miles from Downtown and would take an hour to get there, if there is no traffic. It’s like saying Gettysburg, PA is a viable housing option for people working in Baltimore, because it too is about 60 miles from downtown.

    1. It’s a fair point, but I’ve known plenty of people that commute from Easton, PA to Midtown Manhattan on a daily basis and that’s just as bad a commute if not worse. Yes, the housing markets are completely separate, but Palmdale (and like exurbs) is absolutely a viable option.

    2. I didn’t “equate” anything — I linked to a list, cited the top price and bottom price, and also mentioned that more than 100 zip codes in L.A. County have an average listing price of less than a half-million. You are more than free to click on the link I provided, and make your own arguments.

      1. I stand corrected.

    3. People do make such long commutes. The commuter trains for Washington run as far out as Fredericksburg, VA (50+ miles), Martinsburg, WV (75+ miles) and Perryville, MD (75+ miles). People also take Amtrak from further out.

      1. Same with Chicago, where people commute from Wisconsin by train. They don’t call it “Chicagoland” for nothin’.

  14. When I ran for NY assembly here in 1988, at a political forum in Bronx House, an indignant sounding lady kept asking the panel I was on, “What is affordable housing?” She didn’t seem satisfied by my answer, “It’s whatever housing you can afford. I can’t answer for you, nor for any individual.” But she seemed to get no answer at all from the other panelists, & sat down seeming frustrated. Maybe she was looking for some code or slogan answer. Maybe she was looking for some very specific statement re sq. footage & $. Or maybe she was waiting for 1 of us to say it was bull shit.

  15. Back in the day ‘Affordable Housing’ was known as ‘The Projects’. We all know how that went.

  16. They’re doing the same whining about “affordable housing” in Seattle. “Me ‘n’ my six keeyidz can’t afford a huge, newer home with a fenced yard right in the middle of the chic hipster neighborhoods! WAAANH, GUBMINT MODS HELP!” There are some city council members making noises about rent control and other bullshit.

    Dog forbid any of these tragically hip but cash-challenged whiners live anywhere but in the most popular neighborhoods. They’ve got so much elitist proggie contempt for the “wrong” zip codes, and such a whopping sense of entitlement to take someone else’s property for free or cheap, that doing what we (and our parents and grandparents) did years ago — simply looking in another neighborhood for housing if we can’t get our first choice — is tantamount to starvation and imprisonment with them.

    If you want to live and work in a popular area, you suck it up and pay the market rate for it. The reasons you like that neighborhood are the same reasons everybody else likes it. “Oh, but I have kids/work for a nonprofit/am a single mom, so I’m special and should get to take somebody else’s property for less than it’s worth.” Nope!

  17. souds like what the left does best.

  18. Anyone ever notice that places where cost of housing is really high, like LA, already have all the laws progressives believe are necessary to fix all the cities that don’t have LA’s problems?

  19. Google pay 97$ per hour my last pay check was $8500 working 1o hours a week online. My younger brother friend has been averaging 12k for months now and he works about 22 hours a week. I cant believe how easy it was once I tried it out.
    This is wha- I do…… ?????? http://www.online-jobs9.com

  20. We are a nation in protracted decline. There is no shortage of anecdotal symptoms. One likelihood is that the stories you hear today will get worse over time. Hard to know how far we need to fall to hit bottom, but we should be prepared for a fairly long trip.

  21. Google pay 97$ per hour my last pay check was $8500 working 1o hours a week online. My younger brother friend has been averaging 12k for months now and he works about 22 hours a week. I cant believe how easy it was once I tried it out.
    This is wha- I do…… ?????? http://www.online-jobs9.com

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