Thursday, March 17

HOT-HOT-HOT HOUSING MARKET IN CALIFORNIA

The Happy Capitalist has some fun with this post on the hotter-than-hot California housing market which is making paper millionaires out of thousands and thousands of homeowners in the Golden State. Don't you just love his photograph of a typical California "starter home!" Trust me: that's not all that far from the truth. Don't try, as an example, to relocate from the Deep South or Texas to southern California or the Bay Area, unless you've just won the multi-state lottery, as there will hardly be room in your home for a family pet, let alone any children. Abe Lincoln lived better in his one-room Kentucky cabin than do folks buying a first-time home or condo in Orange County, CA, as an example.

Indeed, the outrageously high cost of housing in the "Golden State" is among the key factors in California having the 5th highest level of poverty in the country -- a fact not generally suspected by people in the snow belt who watch the annual New Year's Day Rose Parade, or who catch televised glimpses of the mansions in Beverly Hills or the dramatic hillside condos that dot the Bay Area.

Regional price differences, particularly housing costs, also affect the income needs of poor families. In San Francisco, for example, the U.S. Department of Housing and Urban Development estimates the annual fair-market rent for a two-bedroom apartment at $16,344 - representing more than 90 percent of the national poverty budget for a family of four. If we adjust for housing costs, California's poverty rate was 15 percent in 2000. The state would have the fifth-highest poverty in the country, behind Washington, D.C., New Mexico, New York, and Louisiana.

The stark reality of how many Californians live in poverty is even more apparent when it's presented in raw numbers. In 1970, 1.9 million people were poor in California. In 2000 that number more than doubled to 4.4 million, roughly equal to the combined populations of the cities of Los Angeles and San Francisco.

Fact is, and as one who lived in California for many, many years, it's far easier for the swallows to return to Mission San Juan Capistrano than it is for someone living outside of California to return to its over-priced housing market. Of course, remember that the swallows have been forced to live in 200+ year-old housing!