There's not a single US state where a minimum wage worker can afford a 2-bedroom rental

[YmirGF]

The only thing I'm concerned about is affordable housing. I don't see it as my responsibility or my problem to justify what other people do. If a property owner wants to charge a certain rental amount, then it's up to them to provide evidence that they actually need the money. If they appear to be doing okay and have a lot of money, then they don't need any more money. They can learn to survive on less.

That would be brilliant if employers used the same criteria. Sorry, Jim, you are doing OK. Forget the raise! You will have to learn to survive on less if you want to get ahead.

 

[Curious George]

Yes, remember that they will take home more than their $900 take home pay since they will receive a variety of low income assistance.

Really? What assistance will they necessarily receive?

Also remember that the $290 per week was based on 40 hours. Many higher salaried people work more than 40 hours a week, lower salaried employees could too, if they choose to do so. Also you are ignoring two income families, which most of those renting the multiple room $500 apartments are. A single person could rent a studio for even less than $500 per month.

Since people are indeed renting apartments in Tennessee that make minimum wage, it is obvious that it is possible.

The point is that federal minimum wage at a regular 40 hours is insufficient. Trying to find one exception hardly discredits the general rule. We could point out that many state minimum wages are more than federal minimum wage. That is all beside the point. The point is that the federal minimum wage is insufficient. Your working the numbers in Tennessee just further proves the point.

 

[columbus]

Because children of single parents should share a studio with there parent as that is the best environment for them given our culture?

I am not sure what a single, minimum wage earner would qualify for in subsidies. But a parent would qualify for lots.
At least around here.
Tom

 

[Subduction Zone]

I believe the claim was based on the federal minimum wage.

Then the OP made the classic error of treating money as a constant.

 

[YmirGF]

Or rebuilding American unions, deeper looks into gentrification, rent hiking, distribution of lower income housing to prevent displacements, hard looks at what causes the majority of Americans to go into debt (such as healthcare costs). There's a lot that could be discussed in relation to this article.

Indeed, more economic ghetto housing now! (Just trying to be helpful.)

 

[Curious George]

I am not sure what a single, minimum wage earner would qualify for in subsidies. But a parent would qualify for lots.
At least around here.
Tom

Provided the waiting list is accepting additions, they receive assistance, and they find a place within the allotted time.

I think there is a profound ignorance regarding the type of assistance available, the amount of assistance available, and the availability of such assistance.

 

[Curious George]

Then the OP made the classic error of treating money as a constant.

Sounds like a separate issue for you to take with the OP. The link was provided and quoted. But the idea behind the OP is affordability and accessibility. Seattle and Washington state in general has done much to combat that but still has major issues.

 

[Milton Platt]

Minimum wage workers can't afford a modest 2-bedroom home anywhere in the country, report says - CNN





Here's my solution to the problem: Rent controls. All rents should be immediately reduced to 10% of what they are now. That way, everyone would be able to afford housing, but the bigger plus is that it would free up people's disposable income to the point where they'd spend it and would stimulate the economy across all sectors. The only ones who might suffer are greedy landlords, but too bad for them.

Another idea that might work is an unused/vacant property tax which doubles each month a property or rental unit goes vacant. This would also include commercial properties. I've seen a lot of vacant lots and boarded up buildings in prime areas, many for months or even years. It's inexplicable that no one seems to want to buy them. The only explanation is that the owner is too greedy and is holding out for more money.

So you want the owners of the buildings to rent at a substantial loss and somehow find the money to pay the taxes and maintenance? Where would that money come from?

Why would the owner of a building spend the time or make the investment in the building in the first place?

Why are all landlords greedy for wanting a return on investment? Do you work for free???

The cap rate on an apartment project can sometimes be as little as one or two percent after expenses.

Do your home work.........................

 

[Milton Platt]

And regarding an earlier point about construction and so forth, I consider that a BS argument. I'll explain why.

My grandfather bought a house in Santa Ana, California in 1971 for $28,000. It was built in 1968, so clearly, all of the construction costs were done. He sold it in 1977 (I don't remember how much), but over the decades, the same exact house (where the construction of it was already paid for) had been sold and resold multiple times, with the price going up and up and up. Now (according to Zillow), that same house is apparently worth $621,000. Same exact house. Granted, there might be some upkeep and maintenance costs, but I can't believe it would be so extremely high. All the money goes to profit and to benefit the wealthy.

My other grandfather (along with my dad and his family) built their own house back in 1941 in a semi-rural area which would later become part of the south suburbs of Chicago. I don't recall what the costs were, although they did all or most of the work themselves. Today (according to Redfin), that house is apparently worth around $162,000. Some "investor" thinks he/she deserves to earn money from other people's labors and sweat.

Housing should be for people to live in. It should not be viewed as an "investment." That's where a lot of skewed thinking comes from.

No, it is the value of the land that has made the price go up. What would be the replacement cost to buy an equivalent lot in that area and build the same house to modern building codes with current material costs and labor costs?
All businesses earn money by using other people's labors. Why should real estate be any different?

 

[Stevicus]

I agree with your intentions but not your tactics. I'm not sure pricing fixing will solve the problem. We need to encourage free-market competition. Right now we do not have enough competition to wring out the inefficiencies of exorbitant CEO pay.

It seems to me that this is a quality of life issue, no different than healthcare, education, police/fire protection, and so on. As for free market competition, it depends on the industry. Some industries are regulated, like utility companies (gas, electric, etc.). They have to go before an elected state commission (at least in AZ, not sure about other states offhand) if they want to request to raise their rates.

As for the CEOs, a lot of them just seem like a bunch of crooks.

 

[Curious George]

So you want the owners of the buildings to rent at a substantial loss and somehow find the money to pay the taxes and maintenance? Where would that money come from?

Why would the owner of a building spend the time or make the investment in the building in the first place?

Why are all landlords greedy for wanting a return on investment? Do you work for free???

The cap rate on an apartment project can sometimes be as little as one or two percent after expenses.

Do your home work.........................

While I disagree with the OP's wholesale approach.

Arguably, decreasing landlord profit margins would drive the prices of housing down and allow for more owners than renters, because many would not invest in the buildings in the first place.

 

[Stevicus]

It sounds more like they are arguing that your proposal of a reduction to 10% is an extreme and a non-starter measure that will be killed before it makes any headway. And they're probably not wrong. In which case it would just be a waste of money and time. The reason the California rent control bill didn't go through wasn't a voter issue it was a court battle issue.

Well, okay, if 10% seems a bit extreme, I'm sure the number could be negotiated. Politics is about negotiation and compromise.

As for it being a non-starter, that's a judgment call, I think. After all, there have been plenty of ideas and causes which might have been thought "lost causes" and which many people thought would never work.

But I think that it's also a matter of priorities and where the Democrats want to spend their political capital.

Don't get me wrong, my biggest issue with Obama was that he compromised with conservatives way too much. And maybe today he might have gotten away with proposing a single-payer healthcare system instead of a revised romneycare today, but it would have been dead at the gate back when he was putting ACA together.

Possibly, although the huge lobbies involved in it made it certain to be boondoggle. Insurance companies, big pharma, the healthcare industry - all in it to get the biggest piece of the pie. I suppose even the president is powerless to fight such colossal forces, so he decides to play ball. The people were misled - not necessarily by Obama, but by the cacophony of conflicting views being bombarded over the airwaves and all over the internet. While it's pretty much a given that politics is all about the money, this notion was certainly displayed at its rawest (and lowest) during the whole Obamacare escapade.

 

[Stevicus]

So what happens to the mum and dad investors under your plan?

Well, I suppose if they can claim hardship, perhaps some sort of compensation or subsidy could be put in place. As I said, I don't want to go after the little guy, just the big fish and fat cats.

 

[Shaul]

Oh golly gee one example?! You really showed me.

Oh wait look at my edit, which I posted a bit prior to this. Less than 100 listings at your price point for the entire state.
Face it, you argument is based on non-representational edge cases.

Also I've worked with rental assistance before (for my brother who is learning disabled), full time unemployed often dont qualify or only for short term benefits.
And what you're doing is essentially admitting that it takes special programs to make minimum wage a livable wage, and in incredibly narrow circumstance at that.

But wait, there are many more rental units than 100. You haven’t researched all the sources of listings. For example the postings at college housing centers, local buy/selling free newspapers, bulletin boards, and community centers. Also you forgot another source, word of mouth. Many rentals are discovered by word of mouth that are never even advertised. So seeing 100 (a number which I don’t accept as valid) would not reflect the actual number of units currently open.

But even more importantly you overlook that the number of units available at any given time is a small fraction of the total rental units. A vacancy rate of 5% is not unusual. That means for every 5 units currently available for $500 a month there are 95 units already being rented at that rate. So whatever the number of known available units is there are over 20 times that number of actual units. In other words, there are thousands of lower priced rentals in Tennessee, not hundreds.

 

[Shaul]

Really? What assistance will they necessarily receive?


The point is that federal minimum wage at a regular 40 hours is insufficient. Trying to find one exception hardly discredits the general rule. We could point out that many state minimum wages are more than federal minimum wage. That is all beside the point. The point is that the federal minimum wage is insufficient. Your working the numbers in Tennessee just further proves the point.

Really, you want me to explain all of the huge topic of assistance available to low income earners? I supposed you want me to do that while standing on one foot too. The fact is there are assistance programs for low income earners. This is imputed income. To neglect to consider that this assistance exists when calculating a low income earner’s total budget leads to an erroneous calculation of the percentage of that earner’s income goes for housing.

You miss read what I wrote. I wrote that someone only working 40 hours a week can afford basic housing. When I described that they could work more than 40 hours that was predicated on them choosing to do so to be able to afford something better than the lowest cost housing. Don’t put words in my mouth.

“Insufficient” is a completely subjective description of income. Since needs vary an income which is insufficient for one case may be quite sufficient for another.

The point is that CNN said that no person earning just minimum wage could afford to rent anywhere in the U.S. Showing that is not true in even one state would be sufficient to disprove that, which I have shown.

 

[Stevicus]

To both of you, I say the same thing: America is increasingly becoming a cruel country. It's not looking for fair solutions, and the compassion manifests as stripping away health benefits from the working poor and separating children from their parents at the border.

This doesn't describe the majority of the American people, but it does describe the ones who own the country and make the decisions. They don't want what you want. From their perspective, the country is not broken. It's on the mend. I'm not expecting any "problems" to be solved in America any time soon except the problem of concentrating wealth, power, and privilege in the hands of the few.

I think that part of the problem has to do with the abuse of our freedoms - not necessarily abuse from the government (although that's a problem too), but also abuse by the citizenry itself.

I also realize that there are certain aspects of the country which are not looking for fair solutions, and that there is a certain level of cruelty and outright dishonesty out there. Cruelty begets cruelty. It just escalates. It seems to be a recurring cycle throughout history.

There were signs that America's ruling class was starting to show some smarts in the past. The World Wars and the Great Depression, along with seeing an active revolutionary movement take over in Russia - all of that seemed to give them an indication that they'd be far better off sharing a bit more of their wealth - rather than risk losing it all. That was the smart play, and it worked rather well - even if it involved accepting certain progressive policies and coming to terms with the labor movement.

WW2 was a big turning point - a sense of camaraderie and the idea that the country was unified. Economically, we experienced an enormous boom in the post-war years. Working people who lived in crowded urban tenements decades earlier were moving into suburban houses. Unions became much stronger. The Civil Rights movement grew by leaps and bounds, gaining much greater support than they had before.

But somehow, between then and now, America got lost.

 

[Stevicus]

It all depends on how they do it, now doesn’t it?

Of course, but that works both ways. But let's say you have two people advocating for something:

1. One wants to improve the standard of living for working people.
2. The other (who has more money than anyone could possibly want or need) wants to make even more money for himself and his cronies.

Which one is taking the more honorable position? Which one should be trusted more?

 

[Stevicus]

You mean, the insurance money when the building burns down?
Tom

You mean if they set fire to their own building? In that case, they can spend their money in prison.

 

[Stevicus]

I see where this is leading. Socialized housing.

It might have to come to that.

 

[Stevicus]

That would be brilliant if employers used the same criteria. Sorry, Jim, you are doing OK. Forget the raise! You will have to learn to survive on less if you want to get ahead.

This is very close to what millions of workers have to face all the time. In fact, I remember when McDonald's got razzed because they had a website for their employees on how to try to live on the meager wages they receive.

Considering the extreme disparity between those at the top and those at the lower levels, one might well wonder why those at the top would howl and complain so loudly about having to pay a bit extra in taxes, or to have to pay a little more for their employees, or to charge a little less to their customers.

I mean, what's the problem? Seriously, what is it?

 

[Stevicus]

So you want the owners of the buildings to rent at a substantial loss and somehow find the money to pay the taxes and maintenance? Where would that money come from?

It's not my problem. They were the ones who chose to invest in real estate thinking they were going to make huge profits. That's their choice, and they should have to live with that choice. If it doesn't work out for them, then that's just the breaks of the game.

If they want sympathy for the "substantial loss," then they'd do well to show a little sympathy for those who have to pay their exorbitant costs just to avoid having to live out of their cars or on the streets. Nobody cares about them, so why should I care about the trials and tribulations of a real estate tycoon or some cold-blooded corporation which cares about nothing but its own profit margin?

Why would the owner of a building spend the time or make the investment in the building in the first place?

Why indeed. Why are they doing it now? Because they can. Because the economic system allows them to do this.

Why are all landlords greedy for wanting a return on investment? Do you work for free???

"So tell me, Gordon: when does it all end, huh? How many yachts can you water-ski behind? How much is enough?"

The cap rate on an apartment project can sometimes be as little as one or two percent after expenses.

Do your home work.........................

I'm doing it all the time.