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Thread: More Americans spending majority of income on rent

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    Default More Americans spending majority of income on rent

    More Americans spending majority of income on rent, except in Washington





    By Amrita Jayakumar, May 10, 2013 08:04 PM EDT
    The Washington PostPublished: May 10



    The number of Americans spending more than half their income on rent has risen steadily across the country since 2008 — except in the D.C. region, according to a recent report.
    Nationally, the share of working Americans who spend more than half their income on housing costs has grown every year since 2008, reaching 23.7 percent of all working households in 2011, according to the Center for Housing Policy, a research group. It was 21.8 percent in 2008.

    Graphic


    Housing costs hitting renters harder than owners.






    In the Washington region, the percentage shrank: 20.8 percent of working households spend more than half of income on housing, down from 22.5 percent in 2008. The report defines working households as those that average at least 20 hours of work a week and in which total income is no more than 120 percent of the region’s median income.

    Conventional wisdom suggests renters shouldn’t be spending more than a third of monthly income on housing costs, analysts said.

    The findings reflect Washington’s unique position, analysts said. The region escaped the worst of the recession, and its housing market has weathered the downturn with less damage than some of the hardest-hit areas. The housing crisis drove up rental demand and prices in many cities as troubled borrowers were forced from their homes. But the effect was more muted in the D.C. area, analysts said.

    “During the recession, there were a lot of job losses nationwide, but not so much in the Washington area,” said William Rich, senior vice president of the Alexandria-based research firm Delta Associates. “At the same time, rental rates increased at a slower pace.”

    A construction boom in the region is expected to help keep rental prices from increasing quickly, analysts said. Developers broke ground on nearly 15,000 apartment units last year, many in the luxury-rental sector.

    Across most of the country, many renters are facing a double whammy of falling income and rising rents, said Maya Brennan, senior research associate at the Center for Housing Policy and co-author of the report. Between 2008 and 2011, median rents rose nearly 6 percent, while income fell by more than 3 percent.

    The average rent in the D.C. area rose during that period, too, by about 11 percent. But while income fell in most of the country, it grew by 4.2 percent locally. Washington rents are high in comparison with many cities, but that is offset by above-average income, housing experts said.
    Overall, eight out of 10 working households in the country struggle with housing costs, the report shows. Homeowners are slightly better off than renters; the percentage of owners who spend more than half their income on housing has stayed essentially the same, about 20.9 percent, from 2008 to 2011.

    The problem of expensive housing affects all income classes but hits lower-income workers the most, according to the report. Among working households earning less than 30 percent of their region’s median income, more than 80 percent spent a majority of their paychecks on housing in 2011. For those who earn 31 to 50 percent of median income, the share was more than 40 percent.
    High rent squeezes a renter’s ability to save, and some businesses in high-rent areas struggle to find workers they can afford, analysts said. Also, low mortgage rates have made homeownership attractive, but renters may not be able to afford a down payment.

    “If most of your income goes to rent, you can’t save for a down payment,” said Jed Kolko, chief economist at Trulia, a real estate research firm.
    Rents will eventually fall as the supply of rental housing increases, analysts said. In states such as Florida and California, private investors have been buying residential properties to convert them into rentals. New construction also has started to tick upward.

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    If more than 25% of your income goes to pay for your housing you are a pauper and living hand to mouth whether you know it or not. The Bible clearly shows us what usury does, we are slaves.

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    Quote Originally Posted by MsPaulRevere View Post
    If more than 25% of your income goes to pay for your housing you are a pauper and living hand to mouth whether you know it or not. The Bible clearly shows us what usury does, we are slaves.
    23.84% of my income goes to rent. The there are the electric/water/trash so more like 28 percent or so.

    “There is nothing which I dread so much as a division of the republic into two great parties, each arranged under its leader, and concerting measures in opposition to each other. This, in my humble apprehension, is to be dreaded as the greatest political evil under our Constitution.”
    ― John Adams, The Works Of John Adams, Second President Of The United States

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    What is wrong with the economy in general? It is the fact that while the costs of essentials have steadily increased (food, clothing, shelter), wages and income have not. So you get a squeeze, where the increasing costs of essentials crowds out the "discretionary" spending on non-essentials. As an ever increasing amount of money goes to essentials the demand for non-essentials falls, production of that stuff falls, and unemployment rises. This creates a downward spiral that has been in evidence since the late 1970's, when incomes for the average American stalled.

    The delay in the worst effects (which we are experiencing now) was caused by the excessive use of credit (starting in the late 1970's), and the outsourcing of production and the "Wal Mart" effect of falling prices for consumer goods. Both those stop gap measures hit a wall in 2006/7 however. Now we find ourselves with maxed out credit, gutted production, and a floor under prices.

    The only solution now is the redistribution of accumulated capital from the wealthy, who during this time took all the benefit of growth and made out like bandits on a historic scale. That money has to be returned to consumers through higher incomes, who can then return to discretionary spending, increasing employment, and reversing the spiral. But of course, that smacks of socialism, and we can't have that. So, fettered by ideology alone, the future simply looks bleak.

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    I save more money on what I don't pay for!!!

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    Some of this is average greed.

    Years ago most rented at a reasonable rate, at least during the 50's, 60's, 70's

    For years I've heard regular slobs discuss how they are purchasing a double and the renter will cover the mortgage, or similar schemes.

    I can understand charging enough rent to pay for cost, upkeep and a reasonable amount of profit - I can't understand scr**ing your fellow man.

    I know many who landlord - I seriously doubt any of them pay federal or state taxes on the income, they pay just property and school taxes.

    So you have landlords getting wealthier by the minute - if property and school taxes are raised - just raise the rent.
    Conversely quite a few of these types are retired and getting sooo much "retirement" monies monthly they are desperate to find a place to "stash" their extra, unneeded wealth.

    So a large percentage of those at the middle and upper rungs of the ponzi pyramid are doing great, collecting, many collecting 1,2,3 retirement checks, thousands monthly, while squeezing the poor and desperate every chance they get with exorbitant rent. Also known as slumlords.

    If the feds and states really wanted to collect taxes fairly - they could do property ownership checks and cross reference their income claimed -
    probably hundreds of millions of dollars in tax revenue lost.

    Another reason why the poor and lower income class middle aged and younger - and the aged, retired who can not get subsidized, socialized housing - are perpetually screwed.

    We are Free To Scr*w Our Fellow Man in IOUSA Land.

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    Quote Originally Posted by moonarch View Post
    Some of this is average greed.

    Years ago most rented at a reasonable rate, at least during the 50's, 60's, 70's

    For years I've heard regular slobs discuss how they are purchasing a double and the renter will cover the mortgage, or similar schemes.

    I can understand charging enough rent to pay for cost, upkeep and a reasonable amount of profit - I can't understand scr**ing your fellow man.

    I know many who landlord - I seriously doubt any of them pay federal or state taxes on the income, they pay just property and school taxes.

    So you have landlords getting wealthier by the minute - if property and school taxes are raised - just raise the rent.
    Conversely quite a few of these types are retired and getting sooo much "retirement" monies monthly they are desperate to find a place to "stash" their extra, unneeded wealth.

    So a large percentage of those at the middle and upper rungs of the ponzi pyramid are doing great, collecting, many collecting 1,2,3 retirement checks, thousands monthly, while squeezing the poor and desperate every chance they get with exorbitant rent. Also known as slumlords.

    If the feds and states really wanted to collect taxes fairly - they could do property ownership checks and cross reference their income claimed -
    probably hundreds of millions of dollars in tax revenue lost.

    Another reason why the poor and lower income class middle aged and younger - and the aged, retired who can not get subsidized, socialized housing - are perpetually screwed.

    We are Free To Scr*w Our Fellow Man in IOUSA Land.
    That is the very definition of unfettered capitalism. And capitalism is good for everybody.

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    Aetius Romulous
    That is the very definition of unfettered capitalism. And capitalism is good for everybody.



    Interesting article on the unfettered capitalism you mention, will most of IOUSAn's end up like looters, vultures ? I think were are almost there.

    Link - Fair Use: http://exiledonline.com/greedy-landl...sion-vultures/


    February 17, 2009

    Greedy Landlords, Merciless Consumers: A Case Study of America's Recession Vultures


    By Yasha Levine

    I was stuck in traffic with a broken tape deck, barely paying attention to the stupefyingly flat drone of NPR when I heard a story that made me want to carpet bomb the entire US. Just get it done with. Let nature start anew.
    The segment was done on a small chain of upscale houseware stores in New England, called Bowl & Board. Like countless other small businesses all around the country, the chain had been operating on the brink of collapse for months. With fewer and fewer shoppers willing to dish out money for overpriced decorations, one of their chain’s locations started bleeding money, quickly fell behind on rent and brought the chain’s other still-profitable locations down with it. The landlord, a huge company called Capital Properties, Inc., based in New York City, got skittish about the backrent and sued Bowl & Board to get their money back. Being the respectable family business that it is, Bowl & Board immediately offered to empty out its bank account to pay the back rent in full. But with the store losing money, Bowl & Board would go bankrupt if they were forced to keep paying rent. So they made Capital Properties an offer. They asked to be let out of the three-and-a-half-year commitment they still had on their lease and, as a gesture of goodwill, offered to pay three months worth of rent on top of what they owed.


    Bowl & Board was in a desperate situation. They made that much clear to landlord. But instead of taking the money and wishing Bowl & Board the best of luck in these tough times, the Capital Properties’ pack of lawyers decided to keep the store locked into the contract. They figured their boss would make more money if they pushed Bowl & Board into bankruptcy. That way, not only would back rent be recovered, but they’d also be able to liquidate the store’s inventory and cover most of the balance on the remaining lease.


    It was a vicious, heartless move. Bowl & Board wasn’t Pottery Barn. The stuff wasn’t made in China, either. It was a family business that had the founder’s kids managing various stores and his grandkids working the back and making deliveries. All in all, they employed about 30 people in their stores and did business with 300 vendors right here in the US, many of them local artisans in the Massachusetts area.


    When I phoned up Mark Giarrusso, the owner of Bowl & Board, to get his reaction, I expected to catch him brimming with hate, just like me. What did he think about his money-grubbing landlord trying to push his family out on the street? The bastards are deliberately fanning the flames of the recession, I said, muttering something about “lynch mobs” and “vigilante justice.” He brushed me off with a nervous chuckle. “Well, you know, I don’t blame the landlord,” he said, soft-spoken and respectful. “I blame the system that lets this happen. You know, I’ll never go into business again with someone I can’t shake hands with. This is primal, caveman stuff. But it’s true. The landlord is sitting in NYC, he doesn’t know how closing the store will affect the community. We have no connection. To them, it’s just numbers on a page.” But as he explained how this bunk deal went down, it was clear that he was holding his anger in check. There was no disconnect here. His landlords knew exactly what they were doing.


    It turns out that the story is not as simple as NPR reported. Bowl & Board was not just behind on the rent and getting sued for it. Giarrusso knew that the store would soon start lapsing on its payments and contacted Capital Properties to try to sublet the property or renegotiate his lease, lower the rent by 27% (which is what it had been until they jacked up the price one and a half years ago). He pleaded with them, but they wouldn’t have any of it. His landlord knew that unless something was done, and quickly, Bowl & Board would fall behind on rent. But that’s exactly what they wanted. Snooping around, they discovered that money could be squeezed out Bowl & Board’s inventory. So instead of negotiating, the firm stonewalled him while it moved in for the kill. They got an attorney on the case and sent a court summons to an old, non-existent address. They wanted Giarusso to miss his court date; they were planning on it. His no-show made it much easier to convince the judge to freeze Bowl & Board’s bank account until they could get their money back. The whole chain had only $50,000 in the vault. It was chump change; but for Bowl & Board, it was life or death. No access meant no salaries for employees or squaring of accounts with vendors.


    “These are difficult times,” Giarrusso told me. “Everyone is bending right now. I’m not making a killing as a retailer and those I work with know that. Some of my vendors are giving free freight. Everyone knows they need to take it on the chin until things get better.” But not Capital Properties. They’re actually trying to make money off other people’s misery. Predatorial business is what they are all about. But they aren’t the only ones.


    As Bowl & Board found a few weeks later, the filthy rich and their bulldog lawyers aren’t the only ones trying to make a poor man into a bum. The average American is always eager to help out.


    Last week, Bowl & Board held a blow-out sale at their dying store to shore up cash. Customers swarmed the place to take advantage of the unbelievable deals, snapping up couches, chairs, vases, mirrors and all kinds of quaint home decorations, all for 75% off. Bowl & Board was counting on that much. But they grossly underestimated the voracious appetite of New England shoppers. The greed shocked the store’s employees. “They’re like vultures,” one of the distressed employees told an NPR correspondent, her voice was straining and on the edge of tears. “They’re getting a really good deal. But at someone else’s loss.”


    Store workers looked on in horror as their greedy customers morphed from conscientious, polite New England liberals into rabid hyenas feeding at the carcass, snapping at each other, fighting and haggling with the clerks. Some of shoppers demanded they be allowed to carry off the cheap plastic bins that some of the items were placed in for display. Others didn’t bother hiding their annoyance when store clerks refused their ridiculous 90% off counteroffers. Somebody wanted the store to throw in some display shelves at no extra cost. Everyone knew the sale was a last ditch effort to keep the business afloat. But there was no sign of sympathy or good will. They smelled Bowl & Board’s desperation and moved in to tear off as big a chunk of meat as they could. Americans — especially stuffy New Englanders — never bargain at stores, because we’d be too embarrassed of getting laughed at. But all that changed at Bowl & Board that day. When you’re dealing with the mortally weak, bullying stops being demeaning and uncouth.


    “What can I do? I’m in the same situation. Everyone is in the same situation. There’s going to be more of this,” said one shopper defensively. Her house had been foreclosed and now she was out and about shopping to decorate her new apartment. Her logic was brutally simple: I was screwed by my bank and need money. So I’m gonna do what I have to do any way I can, even if it means screwing someone who is as badly off as I am.

    As I sat there in standstill traffic, looking around at the people sitting in their cars around me, I realized that this was the real face of American Depression. Forget all the bull**** sentimental talk of how Americans pull together in bad times There is no saccharine Steinbeckian redemption forthcoming. This is real life. And real life says you won’t get any help from your neighbors. Real life says that hard times bring out the worst of people. So stick with your clan, because it’s only going to get worse.


    Yasha Levine last wrote about how California’s pillaging the poor to finance better courthouse digs, the erection-murdering blabbermouthiness of America’s priciest virgin and his quest for smack and the modern speakeasy on the streets of LA. You can reach him at levine@exiledonline.com

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    "The only solution now is the redistribution of accumulated capital from the wealthy..."

    First, define "wealthy".

    Whatcha gonna take? Their houses and land? Duh?

    If you're talking about cash and equities, yeah, you could take some "fair share" percentage (barf) and spread it around. But then what? It gets spent and then there's no more to be taken. You're back to Square One.

    I dunno as how I'm wealthy. No debt, plenty adequate income and a fair amount of savings, so maybe I'm wealthy. Anybody wants to "take" it for redistribution is gonna learn all about unprecious metals like lead and copper.
    You're from BATFE? Come right in! I use all your fine products!

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    Quote Originally Posted by Desertrat View Post
    "The only solution now is the redistribution of accumulated capital from the wealthy..."

    First, define "wealthy".

    Whatcha gonna take? Their houses and land? Duh?

    If you're talking about cash and equities, yeah, you could take some "fair share" percentage (barf) and spread it around. But then what? It gets spent and then there's no more to be taken. You're back to Square One.

    I dunno as how I'm wealthy. No debt, plenty adequate income and a fair amount of savings, so maybe I'm wealthy. Anybody wants to "take" it for redistribution is gonna learn all about unprecious metals like lead and copper.
    No, I don't think so. There are currently trillions of dollars sitting on the balance sheets of large corporations, family trusts, and bogus unproductive financial instruments which have accumulated in the last several decades. None of it is part of the productive economy, the economy all but a sliver of humanity lives and works and plays and dies in. It exists in places and in amounts that never existed before in history - until about 40 years ago. It benefits none a but so very few. That's where the capital is.

    You don't have to "take" this wealth, you simply have to get it moving through the productive economy again, like it did prior to 1980. It's like a steam, whose waters once fertilized large and sumptuous fields, but now is collected in an eddy, stagnant and stinking. All that's necessary is to trench into it and it will flow again.

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