Housing Prices Continue to Hit New Highs Everywhere

New Orleans    Housing is important enough that it can trigger a worldwide recession, especially if the market bursts first in the United States, as we all found in 2007.  Ironically, it is not important enough that data on housing prices, much less rents, is included in general economic forecasts from the worlds’ main financial bodies like the International Monetary Fund or the OECD.  We know on the streets of cities around the world that prices are rising, but there isn’t an easy way to put the pieces together other than through the stories we tell ourselves and hear daily.

The Economist does try to keep the data and recently published a chart based on an algorithm they had developed on housing prices from various major countries.  The bottom line is that prices are hitting new highs in many countries, and the trend indicates that there is still room for them to keep heading for the ceiling.   Globally, home prices on average are nearing the level before the bubble popped, and considerably higher in some countries, like New Zealand, Canada, Australia, and Germany.  The Economist found levels in the United States, Britain, Ireland, and France nearing the marks they hit before the recession.  Spain still has a way to go but it’s out of the trough.  Only Italy in the countries charted continues to still trend considerably downward.

Perhaps that’s good news for the general economy, but that’s not good news for affordability either in purchase prices for home ownership or of course for tenants experiencing escalating rents.  The Wall Street Journal speculates that prices are now moving new ownership, especially millennials from the recent project of back-to-the-city, and often accompanying gentrification, to nearby suburbs.  They found that fourteen of the fifteen fastest growing cities with populations over 50,000 in the country are in fact in suburbs, albeit they are near large cities like Charlotte, Atlanta, Cleveland, and the like.  Places like Apex, North Carolina, fifteen miles from Raleigh, Frisco Texas, near Dallas, and Buckeye, Arizona near Phoenix are on the list.  Affordability – and good solid public schools – seem to be driving a lot of the migration, both from migrants from even more expensive cities on the West and East Coasts, and from the cities themselves as younger families search for middle-class amenities for growing children and their own aspirations.

Reading all of this I thought of an essay I read recently by the novelist and essayist Marilynne Robinson entitled “City on the Hill” in the New York Review of Books.  In defense of the Puritans and their role in colonial life and American traditions, she reminded readers that they were fleeing not only religious persecution, but the English Poor Laws, that had created a society with only two classes:  rich and poor.  Current housing trends in pricing and rent, may duplicate such a society in major world cities, especially in North America and Europe, where there are only the rich and poor.  The rich because they can afford to live in the cities, and the poor because they have no choice.

Facebooktwitterredditpinterestlinkedinmail

Gentrification Assault, Oakland Housing Market Out of Control

DARWIN BONDGRAHAM - Martin and activists outside of Community Realty's offices in April after delivering a letter requesting a meeting with Marr.
DARWIN BONDGRAHAM – Mr. Martin and activists outside of Community Realty’s offices in April after delivering a letter requesting a meeting with Marr.

Vicksburg, Mississippi   It was hard to believe a friend’s claim that Oakland, California has now become one of the three most expensive cities in the country in no small part because the housing market has gone berserk. He said that Oakland now only followed New York City and San Francisco, and had bypassed Seattle, San Jose, and other famously, exorbitant cities. What happened here? Oakland used to be where people moved for affordable housing who couldn’t afford to live in San Francisco, famous for its port, industry, and blue collar grit, and Jack London. The city where Gertrude Stein famously stated, “there’s no there, there.”

But, now they are all coming there. Suddenly, it is also one of the most diverse cities in the country with the population almost evenly split between Latino, African-Americans, whites, and Asian-Americans, so much so that one controversy, when I recently visited, had to do with racial profiling of neighbors in the Nextdoor.com application that is used by one-third of this highly connected city, exposing the well-known, little discussed racism that stalks almost all of these sites with their constant alerts of anyone with a hoody and a tan.

Not without a fight though. Visiting the weekly paper, the East Bay Express, I picked up a recent issue featuring a cover story on one of Oakland’s biggest landlords, Michael Marr, who had specialized in vulture investing of foreclosed properties after the 2008 real estate crash, ending up with 333 houses and apartment buildings in the city with 1300 rental units under management. Now he’s in federal court though for what the FBI characterized as a conspiracy to “rig foreclosure auctions” along with eleven other East Bay real-estate investors who “made a pact not to compete with one another at foreclosure auctions.”

Marr is letting his lawyers handle that mess and meanwhile is trying to jack rents in some cases by more than $1000 per month. Rent controls in Oakland only cap increases for homes built before 1983, as the impact of such increase would cause massive displacement of many long term residents. It was good to see that standing in the way and organizing the tenants was the Alliance of Californians for Community Empowerment, known as ACCE, and formerly California ACORN. The tenants and the organization have demanded a rent freeze while the court case is pending, a sale of Marr’s ill-gotten properties to the Oakland Land Trust, and action on lingering issues with mold, bedbugs and other problems. ACCE is not only fighting these issues in Oakland either. Fighting a foreclosure with a late night rally at a vulture investor’s house in Los Angeles has found them defending their free speech and association rights in Los Angeles as well.

ACORN has recently won rent controls in Edinburgh and throughout Scotland with the Living Rent Campaign, and more landlord accountability in Toronto and Bristol, but there is little in any of our arsenals to prevent sweeping gentrification without a public and governmental commitment to diversity and affordability in a city. Oakland could become the battleground where we have a chance.

Facebooktwitterredditpinterestlinkedinmail