Rising Rents are Squeezing Low-and-Moderate Income Families

New Orleans   The National Low Income Housing Coalition released its 2017 annual report, “Out of Reach,” looking closely at the impact of rising rent throughout the country and how it is pushing lower income and working families into untenable situations because the gap between rent and wages is widening. Millions of families are joining the great poet Langston Hughes by living his haiku: “I wish the rent were heaven sent.”

The gut punch of the report is plain and simple:

The 2017 national Housing Wage is $21.21 per hour for a two-bedroom rental home, or more than 2.9 times higher than the federal minimum wage of $7.25 per hour. The 2017 Housing Wage for a one-bedroom rental home is $17.14, or 2.4 times higher than the federal minimum wage.

State by the state, county by county, the story of this growing crisis is stark. The gap is the largest in a bunch of overwhelmingly “blue” states, which may be one of the reasons Congressional representatives are not running up the aisles and going from desk to desk with a Paul Revere warning call to “Help, the Landlord is Coming!” Those states with the largest gap between wages and what it cost to rent the average two-bedroom house are led by Hawaii, then Maryland, California, New Jersey, Vermont, Connecticut, Massachusetts, Maine, New Hampshire, and then Washington, D.C. I don’t need to tell you that this is aggregate data because you were already scratching your head when you didn’t hear New York, so yes, thanks to lower average rents upstate that offset the New York City metro area, they didn’t make the ten.

Sure enough when you look at the data even states with relatively lower rent still find that urban metropolitan areas like New Orleans, Houston, Miami, Salt Lake City, Dallas, Seattle, San Antonio, Anchorage, Chicago and elsewhere would require a minimum wage worker to labor 80 hours a week to find a one-bedroom place where they could live. And, yes, the Coalition’s point is not that everyone is working 80 hours to do so, but that if they were able to swing a place that is what it would take. The cold, bitter truth on the ground is that they cannot, which leads to overcrowding, homelessness, and embracing rent-to-own predatory contracts or whatever is available until the eviction notice comes.

Even the states where the average wage required to rent a two-bedroom house is relatively low, it’s still astronomical in terms of a family budget. Want a two-bedroom in Arkansas, then you need to make $13.72 per hour, the lowest wage to rent ratio in the country. Neighboring states are a good comparison with Mississippi at $14.84, Louisiana at $16.16, and Texas at 18.38. The lowest wage required after Arkansas is Kentucky at $13.95. The problem is obvious though. Wages are pretty much stuck at $7.25 in those states and too many of the big whoops in these states are fighting to keep wages that way.

As the report makes clear, it’s not for lack of working or lack of looking. Other “key findings” include:

Six of the seven occupations projected to add the greatest number of jobs by 2024 provide a median wage that is not sufficient to afford a modest one-bedroom rental home.

An extremely low income (ELI) household whose income is less than the poverty level or 30% of their area’s median cannot afford the average cost of a modest one-bedroom rental home in any state.

In no state, metropolitan area, or county can a full-time minimum-wage worker afford a two-bedroom rental home. In only 12 counties can a full-time minimum-wage worker afford a modest one-bedroom rental home.

It’s easy to see where this is going: bad to worse to crisis. I’m seems like we’re already there.

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The Neighborhood Gap: Racial and Income Segregation

indexLittle Rock    Three Stanford researchers are claiming to have discovered something new in the acknowledged huge divide between white and black families in addition to making less money and “blatant discrimination,” and that’s a so-called “neighborhood gap.” Meaning that through data crunching they found what the Times called “a striking pattern: White (and Asian-American) middle-income families tend to live in middle-income neighborhoods. Black middle-income families tend to live in distinctly lower-income ones.” Going further they argue that “A typical black child living in a household with $100,000 annual income lives in a neighborhood with a median income of $54,000. And a black child in a household making $50,000 typically lives in a neighborhood with a median income of $42,000.” The neighborhood gap means the obvious, that black families, even with higher incomes, have less access to the better schools, day care, transportation, parks, and needless to say jobs, access to healthcare, and other amenities that higher income neighborhoods attract.

I would love to really sit down and look eye-to-eye with any of these folks and ask, What’s the surprise? What’s new here? Are we trying to simply define the line more tightly between what constitutes “blatant discrimination” compared to run of the mill, everyday discrimination?

The Times concedes that discrimination plays a role, but pushes it off on historic legacies of public policies from the 20th century that included “essentially whites-only wealth creation” through federal housing policies, even while acknowledging that “subtle discrimination” continues citing a 21st century HUD study in 2013 that found that “black home shoppers were often shown fewer options than similar white shoppers.” This racial steering has been a persistent and unconquered problem for over fifty years for cry-eye! Remember block-busting! Remember whites-only advertising. Where’s the change?

Let’s also recall persistent efforts and continuing battles to economically integrate higher income housing enclaves. The Wall Street Journal recently featured a column written by someone from the Manhattan Institute with the provocative headline that President Obama was trying to integrate the Clinton’s 95% white neighborhood in Westchester County, New York, saluting the efforts of a newer Republican mayor trying to resist a court approved settlement with HUD to add 750 units of publicly subsidized housing in the county. Similar efforts in another 1200 plus communities were derided. Let’s be clear we are talking about a HUD federal policy to in fact place lower income families in communities with higher incomes and stop income and racial discrimination. This is not a new policy, but it certainly is an ongoing battle to maintain whatever you want to call it, a “neighborhood gap,” segregated communities, or what have you.

The increasing number of rental units and the percentage of families renting, partially trapped by the impact of the Great Recession, means that greater numbers of families, especially non-white families, are stuck in their neighborhoods, and these are going to be neighborhoods that technically have lower incomes, but given new and more conservative lending standards are going to wall in more moderate income families wherever they are.

The difference between so-called “choice” and “blatant” versus systemic discrimination is impossible to parse, but the clear fact that federal policy to create change is still being resisted tooth-and-nail doesn’t escape peoples’ information when they look for a home. Neither does the fact that federal policy, along with state and local policies, to make a difference here are tragically wanting, is going to continue to make such gaps enduring unless there are many more fundamental and sweeping changes.

***
Brother Ali – Work Everyday

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The Digital Divide is a Class Divide

google-fiber-620x426New Orleans     The Pew Research Center says that only 43% of households nationally with annual incomes of less than $25,000 have access to the internet compared to 70% nationally with broadband. Only 55% of African-Americans have broadband internet. Why? Well, not surprisingly, surveys conducted by independent sources, including pollsters hired by the Wall Street Journal to look at the results of Google’s super-fast Fiber service in Kansas City find that cost is increasingly the mountain creating the great divide in this area between rich and poor.

The Journal looked closely at the impact of Google Fiber’s entry into Kansas City in 2012, including its claim that its effort in KC was not just about fast service but also about bridging the digital divide. Their surveys found that in six low-income neighborhoods only 10% of residents were subscribing to Google Fiber with another 5% buying into a Google service for a slower speed that was free for seven years but required a $300 installation fee paid out at $25 per month. Some residents when interviewed found all of the Google pitch confusing to say the least.

ACORN in Canada and with our partners in the US in Pennsylvania and elsewhere and with Local 100 in Arkansas, Louisiana, and Texas has advocated to Comcast, Cox, Time Warner and others that low cost $10 per month plans would work if there were serious and aggressive outreach. To date, Comcast particularly has viewed real outreach into lower income neighborhoods as superfluous to their real interest in creating little more than a public relations and marketing campaign. Google to its credit seems to have taken some half-steps to try and get the job done, and reportedly went door-to-door with its employees in some of Kansas City neighborhoods and, according to the Journal “teamed up with community groups to spread the word,” as well as supporting some “nonprofit groups that offer classes on using the Internet and sell cheap refurbished computer.”

The Journal’s work was specific to Kansas City, so we don’t know what the penetration of Comcast’s service is in Little Rock or Houston on our lower income neighborhoods, except through our own doorknocking and the aggregate numbers which we have forced Comcast to report. As miserable as the 10% Google figure is, it overwhelms the miniscule participation in Comcast’s FCC-ordered $10 per month plan, which certainly bests $25 a month, and Comcast claims, though seldom delivered, a cheaply available, refurbished computer.

The surveys found that 21% of the folks that declined service in lower income, largely minority neighborhoods in Kansas City cited cost as the key factor. Others cited access to cheaper access through smartphones, which though less useful in handling applications still, is also where use is soaring in Africa and India.

By all accounts, Comcast was still going to make money at $10 per month, and Google was definitely not going to lose money even with its so-called “free” service on the slower, lower end in Kansas City. Nonetheless, it is unavoidable, and the FCC needs to take careful note of this, to conclude that if we want to lower the digital divide we are going to have to recognize that it is a class divide over affordability, and until we regulate some of the gross profit margins out of internet access and treat it as the vital public utility it is, this situation will only get worse and be more harmful to lower and moderate income families as costs continue to rise.

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Middle Class Squeeze

topicssqueeze3New Orleans         There were a couple of random headlines and a paragraph or two on the wire services, but the recent report, “Middle Class Squeeze,” by the DC-based progressive think tank, Center for American Progress, is actually pretty startling on a closer look.

Here’s the bottom line. Defining the middle class as those individuals and families between the 20% quintile and 80% quintile or fifth of income groups in a dozen years between 2000 and 2012, median income in middle class dropped by 8%. Families with two parents working and two children, who usually do much better on the numbers, saw their income stagnate in this period. While income dropped, basic costs that define middle income life rose significantly by almost $10,000 according to the CAP researchers work. Rents went up 7%, medical costs 21%, child care 24%, and higher education 62%. At one level you just have to gasp, but living through America in this dirty dozen, there are probably few of us who are surprised at these numbers.

Besides the Great Recession, what happened here?

The report underscores that this has not just been the money grab of the 1% through wealth transfer, though tax and public policy has made this part of the rip and run. Other research has established that 98% of the wealth went to only the top 10% of earners from 2001 to 2007. The report underscores the breach of the social contract between business and workers over recent decades when there was a decoupling of growth in productivity with growth in compensation.

 

Productivity growth from 1991 to 2012 averaged 2.2 percent per year, yet compensation growth only averaged 1 percent per year. A worker today is almost 60 percent more productive than a worker in 1991 but has seen only half of that productivity growth translate into higher compensation.

 

And, that’s just income. The actual wealth of a family has been hammered underscoring the huge gap in inequality.

 

Among the top 20 percent of families by net worth, average wealth increased by 120 percent between 1983 and 2010, while the middle 20 percent of families only saw their wealth increase by 13 percent, and the bottom fifth of families, on average, saw debt exceed assets—in other words, negative net worth. Families of color have fallen further behind white families in building wealth: A survey that tracked white and African American families between 1984 and 2009 found that the wealth gap between them nearly tripled, from $85,000 to $236,500. Homeowners in the bottom quintile of wealth lost an astounding 94 percent of their wealth between 2007 and 2010.

The policy proscriptions focus on doing more to increase the number of family-supporting jobs and aggressively reducing living costs to pull them in line with incomes.
Talk is cheap, but truth to tell, we don’t hear many politicians in this election season speaking to solutions that would loosen the squeeze felt by the vast majority of families.

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Academic Proof Finally that More Diversity Equals More Community

120725103344-london-brick-lane-horizontal-galleryNew Orleans     On the streets in lower income and working communities, a generation of community organizers has argued that, everything being equal, our gumbo neighborhoods of mixed and matched families, races, and ethnicities in fact work, and work well, when people are able to organize together and act collectively.   The academic community has not been very friendly to either our experience or our argument, needless to say.

A random call from my old friend and the learned professor, scholar and public policy expert from the frozen north, Joel Rogers, ostensibly testing a new phone, alerted me to news he knew that I would eat like dessert.  A study coming out of a close analysis of demographics in London (yes, England), arguably one of more diverse, cosmopolitan cities in the world, had found after a rigorous and careful study of various factors in London neighborhoods that in fact more diversity equals more community or social cohesion in their terms.

Ok, so here we go.  The authors Patrick Sturgis, Ian Brunton-Smith, Jouni Kuha, and Jonathan Jackson wrote this paper for the journal of Ethnic and Racial Studies, late in 2013.  They make you wade through the overview of the raging ivy tower dispute on whether diversity in close proximity triggers conflict or cohesion as well as a bunch of math and tables.  The “conflict” scholars argue is that diversity will trigger fierce competition for resources and position in communities.  The “contact” scholars take the opposite position that the more there is interaction, the more there will be reduced conflict, acceptance, and social cohesion in diversely populated communities.  It’s hard to find a bridge over such a gaping chasm!

But here comes this analysis which in Joel’s words “finally controls for income,” and it turns out in my words – and obviously my experience as well – that hell yes there’s conflict when there is competition in the same community for equity in resources, jobs, access, and so forth, but when you flatten the income differences, which happens in lower income communities, then in fact the constant interchange of people trying to survive, live-and-let-live, and act together in ways large and small, produces community or social cohesion.

Here’s how they say it:

Diversity and deprivation are strongly intertwined in London, with ethnically diverse neighbourhoods tending to also be more deprived. Because deprivation has its own negative effect on cohesion, if only diversity is included in the prediction of cohesion its estimated effect will be a ‘mixture’ of the positive influence of diversity and the negative effect of deprivation. The diversity and deprivation effects cancel one another out…. However, once deprivation is included… the diversity coefficient becomes substantial and positive because the deprivation component of its variance … has now been partialled out. In other words, for neighbourhoods with a given level of deprivation, those that are more ethnically diverse tend to have higher levels of perceived cohesion. This finding demonstrates two important points, one methodological and one substantive. Methodologically, it is clear that any analysis of the effect of ethnic diversity on social-psychological outcomes must adequately account for the social and economic conditions in which diversity is found (Letki 2004; Laurence 2009). Substantively, we find that in London, social cohesion is significantly higher in more ethnically diverse neighbourhoods, once we have accounted for the fact that more diverse neighbourhoods tend, predominantly, to be more socio-economically deprived.

Diversity is not the issue, in fact the authors also found that young folks growing up in diverse communities were virtually a perfect blend, compared to the older folks of the population with less interaction.  So, in what should surprise no one and in fact should be a booster rocket to the arguments about the urgency of increasing equality all over the world, class actually matters, differences in resources and money actually create conflict.

Load this bullet in the guns of your arguments from now on and shoot it straight and true!

To cite this article: Patrick Sturgis, Ian Brunton-Smith, Jouni Kuha & Jonathan Jackson , Ethnic and Racial Studies (2013): Ethnic diversity, segregation and the social cohesion of neighbourhoods in London, Ethnic and Racial Studies, DOI: 10.1080/01419870.2013.831932

To link to this article: http://dx.doi.org/10.1080/01419870.2013.831932

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Citizen Wealth: Increasing Access for Participation

New Orleans Once one gets past the ideological opposition some have towards eligible citizens gaining full access to all of the income supports available, we are still faced with the cost of infrastructure and the capacity to enroll the vast numbers who are unserved.

In my book, Citizen Wealth, coming out soon I argue that we need to approach technology differently and increase access to easier filing and certification. I also argue that we need to enlist the vast array of private establishments where eligible citizens congregate in the effort to achieve maximum eligible participation. I even confront the heresy of utilizing Wal-Mart for such purposes, which is surely an indication of our deadly serious I see this mission.

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