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

#131

Post by mjfl » Sat, Dec 31, 2016, 7:16 PM UTC

alexnewman wrote: post #121

THe problem is we still believe america has a middle class. It really doesn't. Even the people I know with household incomes in the bay exceeding 250k a year aren't really saving any money. Easy access to debt has confused access to capital with savings in america. I'm just glad I'm rich

I grew up in a suburb outside of Manchester, New Hampshire. You can get a pretty sizable house there for $300k, rent a nice apartment for $700/month. I'd consider my upbringing middle class. It was cheap but wholesome, with access to an excellent New England education, mountains, the ocean, Boston, and enough social connections that I've never ever felt isolated. I think living in the Bay Area heavily distorts your view of what things are like in the rest of the country. Some people insist on living near Silicon Valley as if everywhere else is filled with bumpkins and barbarians, the uncool, but then can't make the connection that they must pay dearly for that inflexibility. I say, if you are poor in San Francisco, there are plenty of beautiful, cool, places to live that are much cheaper and culturally interesting.

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

#132

Post by shostack » Sat, Dec 31, 2016, 7:18 PM UTC

rdlecler1 wrote: post #69

gaius wrote: post #41

Earlier quoted context omitted.

Right. People expect to skip straight from 22 or even 18 to a late-20s or early-30s level of "stuff" and general lifestyle, without paying their dues in the middle. It's called a "property ladder" for a reason.

It's less of a ladder than a Ponzi scheme. In SF housing prices have grown at a compound growth rate of 6% for over 50 years. Older generation squats on property paid for by debt, low taxes, and then retires at 60 -- all paid for by a younger generation that doesn't have jobs and can't afford housing.

Don't forget that Prop 13 disproportionately favors buyers who bought closer to when it was rolled out. Their rates were locked in a long time ago. I'm not sure how repeatable this will be for new buyers.

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

#133

Post by shostack » Sat, Dec 31, 2016, 7:19 PM UTC

dragontamer wrote: post #94

rdlecler1 wrote: post #69

Earlier quoted context omitted.

It's less of a ladder than a Ponzi scheme. In SF housing prices have grown at a compound growth rate of 6% for over 50 years. Older generation squats on property paid for by debt, low taxes, and then retires at 60 -- all paid for by a younger generation that doesn't have jobs and can't afford housing.

> In SF housing prices have grown at a compound growth rate of 6% for over 50 years. When a good chunk of those years had interest rates in the 10%+ range, and when the years that were lower than 10% ended with "The Housing Bubble Pop" and "Great Recession", that 6% compounded growth is actually kinda awful. In any case, compound growth is the center of most economies. Being the owner of things entitles you to profit…

Surely refinancing impacts this equation some though, right?

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

#134

Post by larsiusprime » Sat, Dec 31, 2016, 7:21 PM UTC

two2two wrote: post #21

This article mentions "hot cities" including Austin, which not too long ago was just another small eclectic city with steady growth. Once it grew large enough and provided the ingredients to hold it's own, industry wise, against other "hot cities" it became what it is today. Austin was just a little weird city in Texas when I grew up in Dallas, but now it's up there with the big boys. What this tells me is there are…

Until those cities inevitably become too expensive, too, just like Austin did. (I desperately hope I'm eventually proved wrong)

"I asked a passing teamster, for want of something better to say, what land was worth there. He pointed to some cows grazing so far off that they looked like mice, and said, 'I don't know exactly, but there is a man over there who will sell some land for a thousand dollars an acre.' Like a flash it came over me that there was the reason of advancing poverty with advancing wealth. With the growth of population, land grows in value, and the men who work it must pay more for the privilege." -- Henry George

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

#135

Post by laughfactory » Sat, Dec 31, 2016, 7:22 PM UTC

dmoy wrote: post #78

ryanSrich wrote: post #58

Earlier quoted context omitted.

I'd imagine that's less so when you look at popular cities. The parent post wanted an opinion on middle class. My opinion is that middle class incomes in cities is around $200k (or should be if you want to be somewhat comfortable). I see houses all around me in Portland going for $800k, $900k, and $1mm plus. That's certainly much more than what a middle class income could afford. So considering those prices are fairl…

> So considering those prices are fairly standard, the middle class income has to be at $200k I think there is a reason why everyone is railing/downvoting on Ryan here, and it's because of a difference in definition. There's two ways to define "middle class". One is by what you can afford: house, car, but not stuff like a private boat, etc. The other way is just by taking some middle percentage of the income brackets…

In order to live in those cities you do need a household income of $200K+. But that is not middle class. In such cities the statistical middle class would be $50-75K, but as a percentage of the population it would be a small (and increasingly smaller) group... Which is the crux of the problem.

Nationwide the middle class is more like $40-50K (household income).

If your household (how many earners it is comprised of) is over $100K in annual earnings then you're in the top quartile (25%!) of the entire country in income, and decidedly not "middle class" (though, depending on where you live, you may or may not have enough to afford a home, much less a boat, a beach bungalow, eating out, going to the bars, etc.). Keep in mind that a lot of these cities are okay for singles, but once those singles get married and have kids they rapidly discover they can't afford the big city anymore and have to leave.

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

#136

Post by WillEngler » Sat, Dec 31, 2016, 7:24 PM UTC

rmason wrote: post #90

I think this article is coastal centric. If you don't want to live on either coast the cities are affordable by the middle class. Certain neighborhoods might not be. I see millennials just a few years out of college buying houses in Detroit for example. Just not downtown or in Corktown. Similarly I've got friends with houses in Chicago, Cleveland and Minneapolis. I've got upper middle class friends who can't afford t…

Yes yes yes. I seemed to me that the article defined "hot" cities as ones with expensive housing, which prevented it from looking at hot cities with less housing problems. Pittsburgh and Columbus come to mind as two cities with growing creative/professional industries where the middle class can afford to live.

(Although housing in the epicenter of these cities' tech boomlets can be absurd compared to the rest of the city. This new construction in Pittsburgh's East End - http://www.zillow.com/b/bakery-living-pittsburgh-pa-63CwP3/ - charges the same for 1 bed that I paid for a 3-bedroom townhouse in a solid neighborhood ~1 mile away 2 years ago.)

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

#137

Post by malyk » Sat, Dec 31, 2016, 7:26 PM UTC

ryanSrich wrote: post #40

contracantor wrote: post #35

Earlier quoted context omitted.

If you're going to make a statement like that I'm going to need an example of what you consider middle class, what you consider affordable and what a reasonable square footage is for a family of 4.

Middle class in a small to mid size city is $200k in annual household income. A family of three should have no problem in 1200sqft. Two kids is excessive, but if you do have two kids you'd be fine in 1500sqft.

The article specifies the middle class as making between $50,000 and $125,000 in household income.

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

#138

Post by closeparen » Sat, Dec 31, 2016, 7:27 PM UTC

JumpCrisscross wrote: post #33

schoolsman wrote: post #25

Earlier quoted context omitted.

> 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 a decent part of Queens for $240k - definitely affordable for middle class. Do you have kids? Because this glib reaction signals that you don't, or you'd be aware that the areas you are touting as affordable have terrible public schools. That's why they're relatively cheap. T…

> terrible public schools There are affordable parts of Long Island and Connecticut with great public public schools less than an hour from Manhattan by train. We've grown accustomed to overporting our post-war suburban archetype of what a "middle class" family "deserves," i.e. lots of bedrooms, garages and lawn space, while diminishing previously (and still!) common practices like having roommates when young, not ow…

>We've grown accustomed to overporting our post-war suburban archetype of what a "middle class" family "deserves," i.e. lots of bedrooms, garages and lawn space, while diminishing previously (and still!) common practices like having roommates when young, not owning a car, et cetera.

"People's lives are too good, we need to make them worse."

What's your angle? What do you gain from advocating against mobility and personal space? Are you upset because you didn't have these things, and don't want "undeserving" people to have them? Or do you just want us all to live in worse conditions for the fun of it? I genuinely can't understand what moves someone to push for "people should not have their own bedrooms or time-efficient commutes."

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

#139

Post by tekromancr » Sat, Dec 31, 2016, 7:29 PM UTC

alexnewman wrote: post #121

THe problem is we still believe america has a middle class. It really doesn't. Even the people I know with household incomes in the bay exceeding 250k a year aren't really saving any money. Easy access to debt has confused access to capital with savings in america. I'm just glad I'm rich

What are you talking about. I make 60k a year in NYC. I manage to make it between paychecks, and save a little each month.

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

#140

Post by mhneu » Sat, Dec 31, 2016, 7:29 PM UTC

laughfactory wrote: post #128

This article reflects my wife and my experience: just a month ago we left San Diego for a small town north of Salt Lake City. We make over six-figures and San Diego held only poor economic prospects for us. We'd have a very difficult time buying a decent home (2000 sq ft, good neighborhood, reasonable commute) for a price which wouldn't jeopardize other essentials like retirement savings, kids college savings, saving…

It's not just housing policy that's gone wrong, it's transit policy. We haven't built good public transit in our cities, and now that cars are filling all available roads, even houses far away from cities are too expensive for how long commutes are.

We wish we had a train system in many cities that allowed the middle class to live 40-60 minutes away from their jobs.

Ultimately however the main problem is wealth inequality. If median income had increased with GDP since 1980, instead of all gains going to the 0.01%, you would be able to afford to live in the suburbs of San Diego.