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Friday, December 09, 2005

Housing Moving Further Out Of Reach

Ooooh, I can see the future. In a story tomorrow that has a very familiar theme, the Seattle P-I takes a look at the affordability of housing (both buying and renting) for lower income families in Seattle.

Last year, the housing affordability gap — the difference between what lower income workers can pay for homes and what typical homes cost — got even wider, according to the report, "Communities Count: Social and Health Indicators Across King County."

The rising cost of housing in Seattle threatens to reshape the city proper, forcing poorer families to outlying towns and ultimately threatening Seattle's economic diversity and vitality, said Stephen Norman, executive director of the King County Housing Authority.
That sounds an awful lot like the point I was making back in August:
So what does this all mean? If housing prices, and especially rent, keep going up, people working low-wage jobs will be faced with two choices: become homeless or move to a cheaper city.
But wait, there's more... Continuing from tomorrow's P-I article:
In the 1990s, Seattle stood out as one of only five major cities among 23 in which the home ownership rate fell, in a study by the Washington, D.C.-based Brookings Institution. The national ownership rate rose to 66 percent.

Seattle's low rate could create problems around the city, because a home is the main tool that lower- and middle-income families use to accumulate wealth, said Nicolas Retsinas, head of Harvard University's Joint Center on Housing Studies. "If those opportunities don't exist in cities, that is more incentive for them to go farther and farther out."
Are the people out there that are literally banking on continuing double-digit appreciation even stopping to consider what would have to happen for 15-20% gains to continue much longer? I believe that economic reality will eventually set in here in Seattle. Either housing costs will come back down out of orbit, or we'll lose our low-income workforce.

(Paul Nyhan, Seattle P-I, 12.10.2005)


Anonymous said...

How are we going to lose low income workforce? They may live further from the city but if the job is in King County, they are not moving to Spokane.

Bubble sites say it is better to rent than own in this kind of market so who cares about home ownership? And I thought rent is not going up. So what is it?

I know the bleeping heart in you sympathize with these people but wealth inequality is not going to stop, bubble or no bubble. It is just compound interests.

Anonymous said...

They'll be living family of 5 in a converted garage- just like S. Cal