... Mr. Donovan was considered a national innovator in capitalizing on the strong real estate market to find financing for low-cost housing. He held to a middle ground between free-market forces who opposed government controls and liberal groups that believed only government and nonprofit groups could be counted on to provide housing for the working class.
"I would never believe that the private sector, left to its own devices, is the best possible solution," he said in 2006. "I'm in government because of the role of government in setting rules and working in partnership with the private sector. On the other hand, there's no way you could ever get to a scale that can really affect the housing problems in this country without working with the market." ...
Funny the reasons people give why they're in Government, no?
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The private sector
will only be interested in low cost housing if a profit is involved. That means tax breaks and gov't subsidies and a strong credit market. And none of those things lasts forever.
Tax breaks expire, and then the low cost apartments are suddenly market rate. Or the subsidies are cut, and the apartments are suddenly market rate. Or credit cannot be had, and the apartments are suddenly market rate or nonexistent.
The housing crisis in America is not news to the poor and many of the working class. Say what you will (Tim Geithner, I talking to you) about Sheila Bair, but her home owner rescue plan stipulates that the renegotiated mortgage cannot exceed 31% of income. In a country where way too many people spend 50% of income on housing that is so reasonable. People can have a home and food in the same month. My gosh, when I got my first apartment, back in the 70s, my mother told me to never pay more than 25% of my income on housing. That was the rule of thumb in those days. How sensible was that?
yup--profit, but not actually caring about "public" housing
or the poor -- or the working poor (which is the rest of us).
Obama's own history and all his Chicago people are all responsible for moving billions of our money into criminal hands like Rezko and so many others. And for furthering the false idea that Govt is not directly responsible for our basic needs--like housing.
and Jarrett actually ran Chicago's Housing Authority.
That's why i highlighted his reason for being in govt-- it's not to help any of us. Nor are any of these private companies who get our public money to do what govt is obligated to do.
25% is unbelievable--
even when everyone had rent control here in NYC (everyone already renting by 1971), it was more than that.
and 50% or higher is pretty much standard since then (altho landlords usually still want your salary to be far more than just double whatever the rent is) -- and since they changed rent stabilization laws (which covered most renters who moved in after 1971, and limits annual increases) so that once you reach $2000 you're not covered anymore, it's gotten much much worse.
this explains our NYC rental laws, in a nutshell, altho more and more apts are now out of the system entirely, tragically.
we had giant Mitchell-Lama projects that helped the middle class, but they have almost all expired or just been sold and converted to market-rate.
Well, amberglow
I've never lived on the east coast. My first apartment was in a small midwestern city, and I've been an Oregonian for the last 3 decades. So, I guess geography rules the marketplace. I do believe that, no matter where you live, 50% of income is too much to pay for housing for most people. If you are making $200,000, then maybe spending half on housing pencils out. For a family earning $40,000, spending $20 thou on housing is just too much. Not too many of us are making $200 grand/year.
it's very situational--and about take-home --
and about where you are or where opportunities are, etc.
you really have to look at it according to take-home pay -- and not just income --
if you take home 2000/month, you can still live fine paying 1000/month rent usually, and can afford to eat and pay other bills, etc.
if you take home less than that here, you're in trouble for the most part
(altho some of us do luck out and pay less than 50% for rent--and most of us here don't have cars or payments or insurance for them either, or mortgages, etc)
2000/month take-home equals more than median or avg salary in the country, but it's not a lot -- in the 40s, i think?
You need to check your math, Amberglow.
Depending on your tax status, $2000 a month take home would work out to about $35,000 a year or about $10,000 under U.S. median annual income. That's a little more than what I make, and I can tell you, there's no way in hell I could afford $1000 a month for rent.
oh--i thought it was 31k?
(i'm terrible at math--sorry)
either avg or median -- and are you sure? i was thinking individual.
According to the Census Bureau
annual median household income rose to $50,233 in 2007.
Of course that is household income. I didn't see anything that gave individual median.
if that's household and most are 2 workers,
than median individual is only 25k, no? that's even lower than i thought.
50k isn't enough to own a house in most areas, especially since most houses are more than 100k -- far more, esp in the northeast.
Looking further
I found information on the median wage in the U.S.
May 2007 National Occupational Employment and Wage Estimates from the Bureau of Labor Statistics. Median hourly wage for all wage earners is $15.10. That would fit closely with the $500 per week take-home scenario you mentioned.
From a Census Bureau press release dated Aug. 2006:
$34,926 and $23,546 - Median wage and salary income in 2005 for male and female wage and salary workers, respectively.
In my case we're a one-income family. My wife's health prevents her from working. My income alone is slightly below national median, but I live in GA, so it's not as bad as all that. Still, no way could we afford $1000 a month rent on my salary alone. A decent, new apartment here runs about $800 a month. A ratty, 20 year-old mobile home fetches $400 a month.
We're slightly better off than that, but not to the point where we could shell out even the $800 needed to get into that new apartment. As is, we live on a fine line between solvency and destruction, and, to top it off, my wife has no health insurance. Not that we could afford it anyway.
I googled "median income US" got figures all over the place!
From nearly $38K to into the mid-$60's.
What is considered definitive?
I am not an economist nor did I take any econ courses way back college.
i guess it's bet 23 and 34k, no?
i'd trust the census figures before any Bush agency ones.
I Thought I Read That Historically
Housing was not supposed to top 1/3 of your income and that one of the reasons for the mortgage mess is that standard was ignored (to say the least). Now to remember where I read it...
"Do what you feel in your heart to be right -- for you'll be criticized anyway. You'll be damned if you do, and damned if you don't. " - Eleanor Roosevelt
HUD says 30%, & 12 million renters and owners pay 50%+ --
Affordable Housing
their "response" is mostly geared toward home ownership tho--not renters in any way.
You have to take into account
not just rent/mortgage. There are utilities; for most, car payment/insurance; food; clothing; health insurance/other medical and dental; for families with children, various education/sports/activities related costs. None of that even takes into account saving for retirement or college or squirrelling away that 6-12 months emergency fund Suze Orman says we all need.
Yes, many people can survive paying 50% for housing, but they and their families cannot thrive at that level.
It is not good for the country to have so many of its citizens endentured to housing costs.
Part of the reason we are in this horrible economic crisis is because so few people could afford to pay for housing and everything else. Wages did not keep pace with housing costs. It put everybody in the hole.
Yes, we have a credit card economy, but not because we are a nation of irresponsible spenders and consumers. People found that even expenses that should be considered Basic had to be paid for with VISA. That is never a good thing, not even for VISA because eventually everyone reaches the breaking point.
not everyone should be a homeowner tho --
for tons of valid reasons. They ignored those and gave terrible mortgages to people who wouldn't otherwise have qualified for them in the past -- along with giving them to tons of people who would have qualified for good mortgages.
It's why rental and public housing policies are so important, i'd say-- just one reason why.
this has demographic info on US renters/owners/income, etc -- Resident Demographics
I can't agree with you here
But I guess it's just my inner communist, but I do think everyone in this country should own a home.
He who will not reason is a bigot; he who cannot is a fool; and he who dares not is a slave.
- Sir William Drummond
private home ownership, & "communist"?
I'd say that everyone should have good housing, regardless of income or credit score, etc--and that it's the government's responsibility to ensure that basic need.
private ownership of homes for each family isn't communist by any definition i know of, i don't think. what do you mean?
Not really sure what I mean
I knew it sounded wrong as it came out, but then I got distracted and posted w/out rewriting.
Government ensured housing is not a bad thing. I live in a city where a great deal of investment has been made into our public housing, and we have reaped the benefits of those efforts, IMO.
But, at the same time, it is one thing to pay reasonable money for housing, but something else to gain money from that investment back. I rent, have been in the same home for 5 yrs. I have paid over half the value of this home, but if I ever move, that is money that is gone. I have proven my ability to pay for a home, though I have endured rough patches, I always caught up. I don't want all that money back, but to get a small return, perhaps allowing me to "upgrade" if I ever moved is just and equitable.
So I want a great deal of government regulation of credit market, but the government wouldn't necessarily own the real estate being transacted.
*BTW, welcome back. I had noticed your absence. It sounds like you had a wonderful trip.
He who will not reason is a bigot; he who cannot is a fool; and he who dares not is a slave.
- Sir William Drummond
but what do you get back from other payments
for products and/or services?
do you think you should get a return on those things too? Or is it that you're paying for a product or service and that's the exchange, and that's ok?
renting is paying each month for the use of a product -- living space (that is owned by someone else).
a mortgage is paying a little each month, until after many many years, you finally own a product outright even tho you've been using it and acting as if it's yours all along -- a home and the land under it, or co-op share, or condo, etc. (it's an installment plan with interest, for a very expensive product purchase, no?)
as we see nowadays, owning living space -- and the process necessary to do so (mortgages and interest rates, etc) -- isn't always better, and in fact can result in your becoming homeless, bankrupt or both because of the giant long-term costs -- especially when many if not most homes are actually unaffordable given our stinky incomes, and overall job insecurity, and the burden bad mortgages can be.
Renting for 5 years
and you've paid for over half the value (cost? selling price?) of the home?
How do you figure that?
I'm curious. Cuz mortgages are usually for at least 20 years.
I own a 2½ flat. I live in one apt and rent another. The rental income helps pay for the majority of the costs of owning the building, but not all, when you consider r.e. taxes, water, city garbage collection, mortgage, upkeep and repairs.
So trust that I'm not making a profit. This house is my home, not an investment property.
But if I did not have the rental income, I couldn't afford to continue owning this building/live here. On the other hand, I couldn't afford to pay the rent for the apt either on my paycheck, and the rent is a little lower for comparable in the area, so I understand how hard it can be to rent. But your liability is so much higher if you own.
And regardless of the r.e. market, if you sold a house after 5 years, you might not get anything back except for your down payment, cuz most of the early payments go to interest.
The home is worth
$80,000. I have paid over $40,000 in rent. I don't pay a mortgage rate on the home. If I was mortgaging this house, my payments would be lower than my rent, and I'd have something to show for it.
He who will not reason is a bigot; he who cannot is a fool; and he who dares not is a slave.
- Sir William Drummond
Xenophon is going to be right on this one...
... I venture to predict. The Chicago Way is all about public/private partnerships.
"First they ignore you, then they ridicule you, then they fight you, then you win." -- Mahatma Gandhi
not just Xeno -- many of us all along
have been repeatedly pointing it out.
It's simply fact--they've all been very clear on it too -- including this new guy.
/feeling left out on the whole recognition thing. : >
Here in Portland
creating affordable housing (rent and buy) in the city core is an ongoing struggle. City gov't. is committed to it, but housing prices increased so much, and we aren't seeing prices fall very much at all. And people got very caught up in the whole highrise, luxury condo thing. The last several years many apartment buildings that offered reasonable rents were converted to condos. Many folks, low income and seniors, were displaced.
We have seen lots of gentrification in close-in neighborhoods. People are being priced out of close-in housing and forced to the perimeters where city services are not as good and mass transit not as available. And this is happening in a city with a strong commitment to both affordable housing and public transportation. The deals that city officials cut with developers to build low cost and affordable units along with the pricey stuff are falling apart because of the financial crisis. The rental market is very tight. Like everywhere else, unemployment is high, the food bank cupboard is bare, and people who have homes can't afford to heat them.
Many low cost apartment buildings are about to see their tax abatements expire. If the feds don't cough up the $$$ to renew those abatements, the apartments will go market rate. They are owned by private companies who will go for the profit. I know the companies are in business to make $$$, but this is why I am leery of public/private partnerships. In the end those who can least afford it end up on the losing end.
It is not just Obama who worries me. We, as a nation, put way too much faith in the marketplace. Why would we count on the marketplace, an entity with no feelings or conscience, to do the right thing? I don't understand.
"put way too much faith in the marketplace"
we don't actually, i'd say--we have enormous distrust, but at the same time are dependent on it for everything -- even more so now that so much of govt functions and responsibilities get more and more privatized.
those who fund officials -- and the officials beholden to them -- and who benefit from "the marketplace" most -- are the ones who have faith in it -- not us.
over and over, all polls show we want govt -- and not the "market" -- to provide the big things, and to protect and lift us up -- and very often specifically to protect us from "the market" (like with food and drugs, etc).
'05 Democracy Now: Privatization threatens Democracy
Here's the interview.
Basically:
thanks, Davidson--
excellent.
the EPA pick too --
PEER sees toxic problems with Obama’s EPA pick
No mas por Public-Private, por favor
Public-private always worries me, because it all ways seems that the housing almost always goes from public-private to simply, private in the end. And, this does just go for housing. It goes for toll roads, ports, and all kinds of infrastructure where the private sector is sometimes given 99-year "leases" and such.
You get the society you pay for, and public-private is what we've been paying for for quite some time, now. Perhaps, in better times, we could afford to take a risk on these neo-liberals. We can't afford them, right now. We've just been subjected to 8 years of frontal assualt on our already atrophied public sector, and before that a decade of Reagan and Papa Bush; we simply should expect and demand nothing less than the implimentation of actual liberal ideas to clean up the wasteland that is the public sector in so many parts of this country. Most commuities town squares have been replaced by privately-owned shopping malls, and quite a few town and city squares placed under private management, etc...no more.
But, we've always been at war with Eastasia...
and pay-to-play is all about privatization in so many cases --
in most cases, actually --
that's how certain private figures and companies get those sweet, unaccountable "public-private partnerships" Obama and his people love so much.
Davidson what was that link? It went to Barracuda...n/t
n/t
I love this job!
11 million+ now owe more on mortgage than home is worth -
Home values seen losing over $2 trillion during 2008