The Middle Class Can't Afford to Live in Cities Anymore • Hacker News Board

Re: The Middle Class Can't Afford to Live in Cities Anymore

#111

Post by ghaff » Sat, Dec 31, 2016, 6:48 PM UTC

jamespitts wrote: post #104

muninn_ wrote: post #81

Earlier quoted context omitted.

Is NYC a luxury? Absolutely. The access to institutions, the culture, the people, the shops, the history... all of that is a luxury. That's why people want to live there versus somewhere like Cleveland I guess. Once those cities are unaffordable for the very people you mention, they will just move to more affordable places where they have a better cost of living, and then they will bring ideas, creativity, and resurg…

I do not think that big city life should be a luxury, any more than the internet or computing should be a luxuries. While it is beneficial to improve districts, the migratory upgrading of urban areas is an economic model that may be problematic for the population. People need to get work done and take care of their families, not constantly deal with a series of dismal choices and life-uprooting changes. Instead of wa…

>I argue that generating NYC conditions for the general population is one of them.

OMG, I certainly hope not. They'd certainly better not try to generate NYC conditions for me.

Re: The Middle Class Can't Afford to Live in Cities Anymore

#112

Post by saryant » Sat, Dec 31, 2016, 6:50 PM UTC

alistairSH wrote: post #110

saryant wrote: post #83

Earlier quoted context omitted.

A rule of thumb (admittedly arbitrary) for housing is to keep costs below 30% of gross income. That is why I compared median housing prices against median gross income. If someone making the median income in a city can afford a median house with 21% of their gross income, yes, I deem that "affordable." To go back to my example, the family making $41k net annually is paying $10,800 (ish) annually in mortgage costs. Th…

Honest question... where does the 30% income/housing ratio come from? I always assumed it was pushed by the housing industry to "con" us into more housing than we need.

That's why I called it arbitrary.

https://www.bloomberg.com/news/articles/2014-07-17/housings-...

I was using it as a starting point.

Re: The Middle Class Can't Afford to Live in Cities Anymore

#113

Post by tptacek » Sat, Dec 31, 2016, 6:51 PM UTC

Gargoyle wrote: post #107

tptacek wrote: post #99

Earlier quoted context omitted.

In what part of LA? What part of LA would you move to if your rent/income became untenable?

Much of the city of Los Angeles is rent-stabilized, meaning rent can only increase up to 3.5% a year as long as the tenant stays there. But when the move out, the rent can reset to market rates. I just moved out of a place in Studio City, paying $1200 for a small one-bedroom apartment. It's listed now for $1600, and I'd bet on it filling within 10 days. So that's a 1/3 increase in rent I was able to avoid by staying…

Right, I get that. But that's true of every real estate market. The problem in San Francisco is that middle class families are priced out of every neighborhood in the city; their only cost effective options might be in another city.

Is that true of LA? It's only the case if there's no reasonable neighborhood within the boundaries of LA you could move to after an untenable rent increase in your current neighborhood.

For instance: it's obviously not the case that middle class families are priced out of the Chicago market. Chicago is full of neighborhoods full of hours and townhomes and three-flats that span pretty much the whole price spectrum. On the other hand: some neighborhoods that were pretty reasonable 10 years ago (Roscoe Village, or Bucktown) are now so expensive that their demography is changing. That doesn't mean Chicago is pricing out middle class families; it means Bucktown is.

Re: The Middle Class Can't Afford to Live in Cities Anymore

#114

Post by _m8fo » Sat, Dec 31, 2016, 6:55 PM UTC

Glyptodon wrote: post #92

_m8fo wrote: post #67

I agree with the article. However, people should be able and willing to make the appropriate sacrifices commensurate with their future expectations. If someone is 22 and is making 35k a year, and can keep all of their expenses at 15k per year (it's easy to find places in Dorchester 850 rent all inclusive for a room plus 150 food and 3k year entertainment), save 5k per year for retirement and emergencies and finally s…

Your numbers are entirely unreasonable unless they're after tax. Maybe in Arizona and not saving 5k for retirement. But even there $150/week for food is like Ramen, Beans, and Rice, you're not accounting for transportation or medical costs, etc. You can live on 35k for sure, but saving 10k of it every year is pretty optimistic.

35k after tax is about 28k [1]. What's wrong with rice and beans and occasional meat? An average 22 year old doesn't need medical insurance. Given that many people don't save at all this would be pretty good.

Also the plan I described already had leeway for unexpected expenses.

12k housing and food 3k entertainment 10k house 5k saving

I agree that it would be a boring life. That being said, this is using 35k and not the 50k minimum being defined as middle class, per the article.

1. http://taxformcalculator.com/state_tax/massachusetts/35000.h...

Re: The Middle Class Can't Afford to Live in Cities Anymore

#115

Post by analog31 » Sat, Dec 31, 2016, 6:56 PM UTC

alistairSH wrote: post #103

analog31 wrote: post #98

Earlier quoted context omitted.

It's not entirely inconceivable that the middle class is 6% of the population, or less. Perhaps another way of thinking about the situation, is not that the middle class can't afford traditional middle class amenities, but that the proportion of people who can afford those amenities is shrinking.

It's not entirely inconceivable that the middle class is 6% of the population, or less. That's not how this works. Middle-class, is by definition, somewhere in the middle of the household income range. Exact position is open to debate, but you can't just declare "only the top 6% are middle class!"

That's perfectly fair, and I don't think it's pedandic at all. Maybe we just need to re-think the traditional notion of the US as a "middle class society," and what that means. It conjures up expectations in my mind (house, car, kids, etc.) that might not be realistic any more.

Re: The Middle Class Can't Afford to Live in Cities Anymore

#116

Post by danielweber » Sat, Dec 31, 2016, 6:56 PM UTC

cddotdotslash wrote: post #17

This article fails to mention that the middle class can't afford to live in the "nicest parts" of cities, but many cities have other areas as well. Take NYC for example. Sure, if you want to live in the Chelsea or West Village neighborhoods in Manhattan, it's going to cost you. But there are tons of available houses in Queens, Brooklyn, and the Bronx that are plenty affordable. The other day I saw a house for sale in…

Living in the nice part of big cities is a positional good. It's going to get more expensive as society gets more expensive, because you are trying to buy your way on top of a ladder.

If you take a look at the top 40 or so entries here https://en.wikipedia.org/wiki/List_of_Metropolitan_Statistic... you will be able to pick out places with nice economies and reasonable housing costs.

Re: The Middle Class Can't Afford to Live in Cities Anymore

#117

Post by skewart » Sat, Dec 31, 2016, 6:56 PM UTC

mac01021 wrote: post #10

legodt wrote: post #8

Earlier quoted context omitted.

Yes, but those cities don't have the same job markets. Not everybody is a coder or an engineer with skills in high demand in non-metropolitan areas

Serious question (because I'm ignorant): What sets of skills are in high demand in those 4 or 5 metropolises but nowhere else?

It's less about specific skills (e.g. writing or accounting) being in demand in those places and nowhere else, and more about what kinds of companies are demanding those skills and how much they're willing to pay. Like legodt mentioned in a sibling comment, the most influential and prestigious companies in a lot of industries are pretty concentrated in a handful of big cities.

It's not just that different industries have their hubs - media, design, finance in NYC, entertainment in LA, tech in SF. A whole ecosystem of supporting firms grows around these companies. So the most influential and prestigious law, accounting, and consulting firms tend to cluster in these cities too.

There also are a lot of people who don't necessarily want to spend their entire lives in, say, NYC but think it will be a good career move to get a prestigious name on their resume before going somewhere else.

At this point I think there's kind of a chicken and egg situation where a lot of ambitious, talented people flock to major cities because firms are there, and firms stay planted in these cities because so many talented, ambitious people are flocking there.

Re: The Middle Class Can't Afford to Live in Cities Anymore

#118

Post by Gargoyle » Sat, Dec 31, 2016, 6:57 PM UTC

tptacek wrote: post #113

Gargoyle wrote: post #107

Earlier quoted context omitted.

Much of the city of Los Angeles is rent-stabilized, meaning rent can only increase up to 3.5% a year as long as the tenant stays there. But when the move out, the rent can reset to market rates. I just moved out of a place in Studio City, paying $1200 for a small one-bedroom apartment. It's listed now for $1600, and I'd bet on it filling within 10 days. So that's a 1/3 increase in rent I was able to avoid by staying…

Right, I get that. But that's true of every real estate market. The problem in San Francisco is that middle class families are priced out of every neighborhood in the city ; their only cost effective options might be in another city. Is that true of LA? It's only the case if there's no reasonable neighborhood within the boundaries of LA you could move to after an untenable rent increase in your current neighborhood.…

LA is a MUCH bigger city than San Francisco, especially in terms of geography. I'm not sure an meaningful comparison can be made as a result.

There are certainly areas of LA at least as big as the total area of SF where middle class families can not afford to live. There are also areas at least as big as the total area of SF where lower-middle class families are the vast majority of residents.

The cities are just too different to make a meaningful comparison in my opinion.

Re: The Middle Class Can't Afford to Live in Cities Anymore

#119

Post by paulddraper » Sat, Dec 31, 2016, 6:59 PM UTC

jamespitts wrote: post #104

muninn_ wrote: post #81

Earlier quoted context omitted.

Is NYC a luxury? Absolutely. The access to institutions, the culture, the people, the shops, the history... all of that is a luxury. That's why people want to live there versus somewhere like Cleveland I guess. Once those cities are unaffordable for the very people you mention, they will just move to more affordable places where they have a better cost of living, and then they will bring ideas, creativity, and resurg…

I do not think that big city life should be a luxury, any more than the internet or computing should be a luxuries. While it is beneficial to improve districts, the migratory upgrading of urban areas is an economic model that may be problematic for the population. People need to get work done and take care of their families, not constantly deal with a series of dismal choices and life-uprooting changes. Instead of wa…

> I do not think that big city life should be a luxury, any more than the internet or computing should be a luxuries.

The difference is scarcity.

Computers and internet are can be produced at very cheap costs. Whereas, almost by definition, urban real estate is scare and in high demand. If it weren't, it wouldn't be crowded.

Re: The Middle Class Can't Afford to Live in Cities Anymore

#120

Post by alistairSH » Sat, Dec 31, 2016, 7:02 PM UTC

analog31 wrote: post #115

alistairSH wrote: post #103

Earlier quoted context omitted.

It's not entirely inconceivable that the middle class is 6% of the population, or less. That's not how this works. Middle-class, is by definition, somewhere in the middle of the household income range. Exact position is open to debate, but you can't just declare "only the top 6% are middle class!"

That's perfectly fair, and I don't think it's pedandic at all. Maybe we just need to re-think the traditional notion of the US as a "middle class society," and what that means. It conjures up expectations in my mind (house, car, kids, etc.) that might not be realistic any more.

Absolutely true. But with other posts throwing out $200k as a normal middle-class income, we probably need to define what we're actually talking about. The income range, or the lifestyle expectations. The whole point of the article (and others like it) is that the two things are moving in opposite directions.