Seattle's New Normal: Homelessness Is Now Middle Class

Wait, seriously? Can you provide the data? I think you have a seriously huge hole in your model if you're basing your housing costs on a mortgage on a 2012 priced house. Try nearly doubling that part.

What's the next city to have the fate of Seattle and the Bay Area? Will it be Austin? Denver? Still somewhere else?

Interesting. Would you mind posting some of your calculations/data here? I live in NYC myself -- probably a bit more expensive than Seattle -- but even as a single, young, healthy person, $90k wouldn't feel very comfortable here. I make a lot more than that because I work in tech, but I'm still concerned about retirement plans (is $18k/year in my 401k really enough? What if market returns start to stagnate?). I'm really curious where you got your numbers from though, because on 90k salary, your (twice-monthly) paycheck should end up around $2800, before subtracting things like social security/etc. So you probably take home a little less than $5k/month at the end of it all.

Of note in your calculations:

- upper middle class mortgage from 2012. According to zillow [1], median home price in 2012 was $353k. Today it's $800k, over twice that -- 2012 was the worst year in a long time for Seattle housing. Probably 2k/month, right? At 90k, that's going to be about 50% of your salary after tax -- not abysmal, but certainly not close to the 1/3 rule I've always been told. Then again, it's owning rather than renting, so maybe it's justifiable. Biggest problem I see here is that there aren't that many folks who managed to buy their house at the best possible time to do so, and anybody who's moved to Seattle since 2012 is going to pay closer to $4k/month for that same home.

--one midrange car loan: I don't think just one car would be very comfortable for a family of three living in the suburbs of Seattle. Again, doable -- maybe only one parent works, and the child is young, so you could carpool to school/one job/other job, but it sounds like a lot of commuting for whoever has to drop off the others. In Seattle traffic, that could easily end up being 2 hours of driving just to get to and from work, every morning and every evening. Doesn't leave much room for flexibility though. According to Experian Automotive, the average American monthly car payment is $500 [2].

-medical insurance: assuming this isn't provided by your employer, I could easily see this eating the rest of your income after tax. I pray that anybody in this situation has insurance through work. Apparently the average American family is spending between $10k-$20k on insurance, including deductibles [3], so... $1k-$2k/month. So if nobody gets sick in this family, you've still got $1k/month for food and luxuries like eating out, going to concerts, or activities outside of work.

-one decent vacation a year: I never vacationed growing up (family was relatively poor), but I'd guess that for a family of three any real vacation is going to end up in the thousands (my guess would be around $3-5k, though I have little idea). So maybe if you just spend $400-500/month on food, you could put away whatever's left (maybe $500, tops?) to take a vacation every year.

So I suppose $90k is livable, based on what I see here. But it doesn't sound great, and doesn't leave much room for things like serious medical issues, buffer room if you get fired, or even the ability to pay for something like a summer program for your kid. And what about gifts for birthdays, or if your car breaks down, or you get robbed, etc. etc.? Sounds like you're working hard every day but never getting ahead.

Oh, and now that I remember... what about saving for retirement, and saving for college (because you're making $90k, so the government isn't going to give your kid much financial assistance)? Well, I guess we'll just work forever, and the kid will take on $50k of debt to go to a cheaper state school. And then when she graduates and tries to live on $90k in Seattle, we'll have to take into account even worse housing prices AND her student loan payments...

[1] https://www.zillow.com/seattle-wa/home-values/

[2] https://www.experian.com/assets/automotive/white-papers/expe... (warning: pdf)

[3] https://www.cnbc.com/2017/06/23/heres-how-much-the-average-a...

That’s not “salary before tax”, that’s $90k _net_, as in, living off the savings or $90k in post tax income. But it also has fairly generous budgets for groceries ($2k/mo) and one $7k vacation a year, and real estate taxes as of 2018, with house value more than doubled.

I calculated this just to see whether I have to work. Turns out I don’t, but I work anyway.

Homelessness is middle class in Rio and Cape Town and Johannesburg. What that means is that hundreds of thousands of people in those cities live in informal settlements in houses built on dirt out of trash and scrap.