Housing in a volatile and almost failing economy is a strange issue. In some areas, over development has led to brand new, incredibly cheap homes, some of which are sitting empty and are rapidly deteriorating from lack of occupancy. In other areas, partially built neighborhoods are turning to blighted, partially occupied landscapes where there is none of the promised contribution to the local property tax coffers, but there is still a burden that is placed on law enforcement, emergency medical and fire services.
In other areas, blighted or declining neighborhoods were gentrified, then abandoned under foreclosure evictions. The luxury housing market bloomed, then declined, with massive new houses eventually ending up in a financially “upside down” position, or worth less than the remaining mortgage amount.
Housing in America, in terms of home ownership, has created a new form of landed gentry, some of whom sold out when the home and property values were at their peak and who are living well on the proceeds. Others, maxed out with much more home than they needed or could afford if they lost their jobs in a market where most jobs are tenuous at best.
The Baby Boomers/Active Seniors
Expectations in the 60s and 70s, the first terms of 30 year mortgages for “baby boomers”, were that working careers would last for twenty to thirty years, preferably at the same firm. The expectations were that retirement would be comfortable and that retirement would happen when people were in their mid to late 50’s at the earliest.
Also, baby boomers expected their children to move out, as they did, and to marry, have children and set up their own households.
In the end, many homeowners expected to sell their properties for a profit and to live off of the proceeds.
Now, the reality is that careers started ending at the 15 to 20 year point, job related retirement and pension funds were gutted. Millions found out that they were only a major medical illness away from bankruptcy. Unions were decimated, beginning with the Air Traffic Controllers debacle of the Reagan era.
Many more became the traditional empty nesters, but found themselves in the “sandwich” generation, with elderly parents, children and grandchildren presenting differing levels of need. Primarily because of substance abuse, many found themselves raising another generation.
Others did just fine, selling their homes and moving into senior complexes that range from luxury to low income ranges, complaining about the lack of space, but enjoying a lifestyle that is free of the cares of home ownership.
The next generation, sometimes called “Gen X”, has a much more volatile housing situation. When they have jobs, they are far more inclined to rent. Those who have stable employment and who purchase homes do so under a cloud of dicey credit availability and contractual and banking complexities that few can understand. Roommates, room mate problems and room mate issues are a big topic these days as both baby boomers and Gen X individuals are having to share living space in order to get decent housing, especially in crowded and premium urban housing markets.
Many “Gen X” adults return to their parent’s home after job losses, divorces or separations, or for other reasons, sometimes creating a true multi-generational “sandwich” if the elderly grandparents live there, too. Others have never left home and are simply not mature or responsible enough, even into their 30s, to live on their own.
The advent of “affordable housing” offered a break for working class individuals who can make fairly good incomes, but who cannot afford the high prices of urban housing. The problem, however, is that many “affordable housing” complexes include Section 8 qualified individuals who can range from criminals to violent gangs to illegal aliens. While most affordable housing complex restrict felons, people with bad credit and registered sex offenders, the individual who qualifies will sign up, then move uninvited and undocumented family members or friends in afterward, creating a host of problems and crimes.
As a result, the abandonment by solid retired or working class citizens who cannot stand the out of control crime, in combination with the repeated evictions of criminals and substandard tenants means that the concept of “affordable housing” definitely needs to be reworked. With a flood of long term unemployed individuals who need affordable housing, there will not be a good mix with unauthorized and criminal tenants.
The elderly are finding independent living alternatives in senior, assisted living and other adult complexes that also include affordable housing options for low income elderly and senior citizens. Others are remaining in their homes, with an adult child as their caregiver. If the home is not up to fire and other codes, or if the home is in a high crime area, this can present problems for law enforcement, disaster and other emergency response, but the individual is allowed to stay in their home of many years for as long as they can.
If they can no longer live independently, long term nursing and care facilities provide the final homes for the elderly, with hospice level amenities for the final stages. Problems include mistreatment, neglect and abuse of the more advanced illness patients, but many of these facilities provide good care when the family is regularly in attendance.
Overall, the elderly who are aware, able to take care of themselves and are ambulatory often hate to stay in the assisted living facilities, complaining about the “depressing old people” who are around. Many do well in 55 and older complexes and often spend their last days there, giving a high, but natural death rate for senior housing complexes and communities.
The homeless has, for a couple of decades included working class people, one group of whom worked and earned good incomes and who rode a special bus all night long for their housing in California’s “Silicon Valley”. Now, the homeless population includes everyone from formerly middle and upper middle class workers and their families to those who left society a long time ago.
The hopes for both the homeless who need to return to stable housing as soon as possible, and for the long term unemployed who are entering poverty levels lie in finding group living, roommates, section 8 housing support and affordable housing support. Many will do anything to avoid moving back in with parents and for them, much more must be done to better screen, identify and to evict affordable housing tenants who create unsafe and troubled communities.
Housing will remain volatile, with areas that are downright unaffordable, except for the wealthy or for those who have good, solid incomes. There are over developed areas that offer incredible bargains. There are pitfalls to buying some of the “incredible bargains”, which may have so many hidden flaws and defects that the costs to bring them up to local housing codes might break a buyer’s budget and back.
Individuals who have spent most of their lives in their own homes will have to adapt to the long list of rules and lessened privacy that comes with living in high population apartment complexes, gated communities, planned communities and condominium complexes. As with mortage payments, individuals who cannot keep up rent payments will find themselves on the street.
Many communities have rent controls or had rent controls and were convinced to abandon them. If the economy recovers sufficiently to make rents competitive again, many will not be able to remain in their rental homes. As a result, it might be a good idea to reinstate rent controls to allow landlords a reasonable annual increase that does not result in forcing tenants to leave.
In summary, housing joins jobs, credit, and the other necessities of life as a challenge that faces practically anyone who does not have a fixed, guaranteed and stable income, job security, health, life and family circumstances.