California Homeowners Make Money While They Sleep While Renters Pay Increasing Rents
by John Lawrence
It's no secret that equity in California homes is skyrocketing while renters pay skyrocketing rents. In an article in the LA Times, A new California gold rush for homeowners, the poorhouse for renters, Steve Lopez writes:
"California was always a model of stark contrasts in the realm of haves and have-nots. But as rents rise and wages stagnate, a majority of L.A.-area renters are paying more than one-third of their income on rent while thousands are paying 50% or more, with no end to these trends in sight.
"Meanwhile, tens of thousands of homeowners in Los Angeles and Orange counties have enjoyed super-low interest rates and seen their equity rise to all-time highs. Roughly one decade after thousands of people lost their homes in the housing crash, 96.4% of Californians with mortgages owe less than their homes are worth."
That's one of the unfortunate aspects of capitalism - uncontrolled price increases. As long as rich people can afford any price for housing, they will not only live in multi-million dollar mansions, they will pay any price to buy up cheaper housing and rent it out. Thus, average wage earners will pretty soon fall into the class of renters because they will no longer be able to afford to buy a home. AND their rents will continue to go up.
Lopez asks: "do those who have prospered owe anything to those who have fallen further behind, including teachers, nurses, laborers and others essential to both our economy and our best definition of community?" I guess not much as government, especially Republican inspired government has as a core principle of its philosophy "devil take the hindermost" or "money talks, shit walks." There is not much sympathy or empathy for those who just aspire to a middle class job and a middle class life style as their parents did. With the financialization of the economy, there is not much hope for those who just do regular jobs, for those who work hard, play by the rules and aspire to home ownership, a secure retirement and sending their kids to college. Those who want to go to college can mire themselves in tons of student loan debt and start out life as debtors. That's the "free market" solution.
There are all kinds of watered down solutions for building "affordable housing" most of which will just enrich real estate developers because government officials don't want to provide it at government (read taxpayer) expense unless some developer can make a bundle off of it. So the short term solution for most people is to just move out of the state to a locale (hint: there are many of them) where housing is cheaper. For government to build affordable housing (read: public housing), they would be betraying one of the primary principles of Ronald Reagan: let the free market prevail. It would be "socialized" housing and America is not about to become socialist even if tens or hundreds of thousands have to live on the streets while those lucky or fortunate enough to have invested in a house 30 or 50 years ago can walk right by them going about their business.
