Blogger Aaron M. Renn (aka: The Urbanophile) posted a link on Twitter to an interesting New York Times article that questions the affordability of Manhattan real estate for middle-income residents. The article discusses how market rates have shifted in the past 40 years, the difference between market rate and rent-regulated housing, and the near complete void of anything market rate that is affordable to the average family.
You can read the complete article here.
As a property-owner in an area of Cincinnati that is experiencing a renaissance, this issue hits really close to home. My husband and I are firmly planted in the middle-class. And we benefited from an opportunists’ real estate market a few years ago. But, were we to try to find a similar home now, it would be very difficult, maybe impossible. Heck, even a significant raise in taxes might make our home unaffordable.
Urban revitalization is a risky endeavor. But when we talk about the dangers of gentrification, we usually talk about how it will effect the poor, the homeless, those who depend on Section 8 and other “affordable housing” situations. We rarely talk about the way it will effect the rest of us–the working class and the middle class, those who benefit greatly from the amenities and accessibility of the urban environment. When the difference between the costs of subsidized housing and market-rate housing continues to increase, will there be anything left for the rest of us?
In a city like New York City, the middle class was being phased out decades ago. Am I crazy to think that Cincinnati could be inching toward the same problem, even if if happens on a much smaller scale? Similar to the outlying boroughs of NYC, there will still be neighborhoods of Cincinnati in which average families can purchase homes and rent affordable apartments. But, what about those of us who actually want to live downtown?
Some other things to consider:
-Let’s be honest: Having a family changes everything.
“One way to stay in Manhattan as a member of the middle class is to be in a relationship. Couples can split the cost of a one-bedroom apartment, along with utilities and takeout meals. But adding small roommates, especially the kind that do not contribute to rent, creates perhaps the single greatest obstacle to staying in the city.”- O’Leary, The New York Times
Since I believe that strong families are so important for the health of a community, I believe it’s absolutely necessary that there be a place for families to live in vibrant, thriving cities.
-Employers can help. It’s not unheard of for large employers–universities, hospitals, corporations, etc.–to purchase property and rent to employees at subsidized rates to aid in hiring, relocation, and job stability. What if event smaller businesses did this? What if there was a resurgence of business owners living within walking distance of their businesses and providing reduced-rate housing for their employees?
-There has to be a way to get in on the ground-level of development. One way that middle-income families make it work in Manhattan is that they have been around long enough that they secured their real estate before prices soared. They have, essentially, been grandfathered-in to the Manhattan lifestyle. Cincinnati’s downtown is still relatively affordable, but it may not always be. If you’re anything like me, you could not afford the new built-to-suit single-family homes in Over-the-Rhine. But many of us could possibly afford one of the remaining vacant properties that are ready for renovation. Securing these properties can be tricky and finding loans for their rehabilitation even trickier. So, it reasons to say that cities who wish to preserve a thriving middle class must encourage entrepreneurship and provide the means for early investment by those who have staying-power in their community.
I’m curious to know whether all cities experience this phenomena of a disappearing middle class and how they cope. I’d also love to know more about the rent-regulated properties in NYC. Who regulates them and what does it take to get ahold of a property? I’m also curious how Section 8 housing plays into the issue and when the number of government housing subsidies actually works against the working class to limit their housing opportunities.
Anyone want to chime in?
the walking green 
I would say that in the future, the middle-class will only be able to survive as a major segment of American society if large numbers of them RETURN to A) urban centers (though perhaps not the small handful of mega-urban core places like Manhatten for reasons you brought up), B) classic small towns or C) high-value rural industry/agriculture (this would not be large numbers relative to A & B, but the freshly tapped Dakota oil fields where lucrative jobs exist is an example, or starting organic farming & ranching ventures).
The reason I say this is that the costs of maintaining a stereo-typical suburban homestead are becoming increasingly uneconomical when combined with also maintaining middle-class standards of living in other areas like health, education, food, clothes, arts, civic involvement, tithing, etc. In the burbs uou have high square-footage homes and all their utility expenses not to mention maintenance, property taxes, and simply filling the place up with furniture, long distance driving to work every day, garages full of three cars all of which require maintenence and monthly insurance, upkeeping large non-productive plots of grass, having to use fuel to run every single errand no matter how petty, having inferior access to arts and other amenities, and many other factors too numerous to mention. Taking advantage of the infastructure, services, and other benefits of urban living or the small town equivalent thereof are vital to middle-class folks being able to maintain a high standard of living during this seemingly endless period of stagnant wages and rising energy costs.
This is not to say all suburbs are bad by their nature – if you are making 300k and love the suburbs for whatever reason and don’t mind the costs involved that’s fine and a personal preferance, but if you only make less than 100k you are really punishing yourself economically with all those added expenses! And there is also the intangible loss of community in suburbs when everyone lives on their own little one acre fortress and drives and hour to and from work then comes home and closes themselves in the den to watch TV until bedtime – BORING. However, some people LIKE boring because it is predictable and quiet, which is not necessarily a “bad” thing if its someone’s preferance, although I personally classify it under “majorly lame”. If you TRULY like being left alone, move out in the country where you can at least plant a nice garden, target shoot, let the kids run free, and have some organic chickens without a busy-body snitch calling code enforcement on you.
As the affordability issue of urban homes in Cincinnati, there are thousands of inexpensive homes on the West Side within city limits and minutes from downtown and walking distance to stores and transportation, but suburban white people would have to get over themselves and stop being afraid of seeing someone of different color on their sidewalk in order to take advantage of it. I just bought a Cape Cod with hard wood floors and backyard in East Price Hill for less than $10,000 – that is something any middle class family could attain and build on without going into debt or usury, so long as they were willing to cast off their arrogance and live in a part of town that is not considered a status symbol you can throw around when you talk to people (“I live in Indian Hill, Look at ME!”).
Unfortunately it looks like the trend is still to move farther and farther into the exurbs while still depending on the economy of the nearest big city for employment instead of creating independent small town communities. And thus, neither the small town nor urban economy is fully or properly developed, but instead creates a system of glass and steel offices downtown and fields full of tract homes 30 miles away that people drive back to at 5pm, with a few old brick buildings in between. People still live in those old things!? Yes! Ask Liz! 🙂
I love love love the idea of even small businesses providing housing, like the breweries did here in the old days. I’m not sure if it’s remotely feasible, and I’m not sure why procuring the abandoned buildings (not to mention renovating them) is so hard, but at least as a theory, I love it. Also, even as someone with no children, I couldn’t agree more with Liz about the importance of families downtown.