Skip to comments.Lured to Disaster (Thomas Sowell)
Posted on 01/19/2009 9:06:20 PM PST by jazusamo
Behind the housing boom and bust was one of those alluring but undefined phrases that are so popular in politics-- "affordable housing."
It is hard for me to know specifically what politicians are talking about when they use this phrase. But then politics is about evoking emotions, not examining specifics.
In looking back over my own life, I find it hard to think of a time when I didn't live in affordable housing.
When I first left home, back in 1948, I rented a room about 4 by 8 feet, costing $5.75 a week. Since my take-home pay was $22.50, that was affordable housing. (Multiply these numbers by about ten to get the equivalent in today's prices).
After three years of living in rented rooms, I began living in Marine Corps barracks, and sometimes tents-- none of which cost me anything. That was certainly affordable.
As a civilian again, in 1954 I rented my first apartment, a studio apartment-- small but affordable. But a year later, I went off to college and lived in dormitories on various campuses for the next six years. None was fancy but all of them were affordable.
After completing my academic studies, I rented another studio apartment-- not a big advance, but it was affordable.
In 1969, I rented my first house, which I could now afford, after several years as a faculty member at various colleges and universities. A dozen years later, I began to buy my first house.
While the specifics will differ from person to person, my general pattern was not unusual. Most people pay for what they can afford at the time.
What, then, is the "problem" that politicians claim to be solving when they talk about creating "affordable housing"?
What they are saying and doing usually boils down to trying to enable people to choose what housing they want first-- and then have some law or policy where somebody else, somewhere else, somehow or other, makes that housing "affordable" for them.
If you think it through, that is a policy for disaster. We cannot all go around buying whatever we want, whether or not we have enough money to afford it, and have somebody else make up the difference. For society as a whole, there is no somebody else.
But of course political slogans are not meant to be thought through, are they? They are often an emotional substitute for thinking at all.
Sometimes some semblance of rationality is given to the phrase "affordable housing" by comparing the cost of housing to the income of those who live in it. That was certainly what I did when I rented my first room. That's not rocket science, then or now.
The difference is that today there is some arbitrary percentage of one's income that sets the limit to what the government will consider to be affordable housing. It used to be 25 percent but it might be 30 percent or some other proportion.
But, whatever the percentage, it is no longer the individual's responsibility to choose housing that fits within that limit. It is somehow the taxpayers' job to make up the difference, when someone chooses housing whose cost exceeds that magic number.
It is certainly no longer considered to be the individual's own responsibility to acquire the work skills and experience to be able to earn enough to afford better housing as the years passed. Why do that, when the government can simply "spread the wealth around," to use another political phrase?
The ultimate irony is that increasing government intervention in the housing market over the years has generally made housing less affordable than before, by any standard.
A hundred years ago, Americans spent a smaller percentage of their incomes on housing than they do today. In 1901, housing costs took 23 percent of the average American's income. By 2003, it took 33 percent of a far larger income.
In particular places where government regulations and restrictions have been especially severe, such as coastal California, rents or monthly mortgage payments have averaged as high as 50 percent of the average person's income.
Most of our problems are not nearly as severe as political "solutions." In housing, government policies have lured people into situations that were untenable to them and to the country.
I'll go one up on Dr. Sowell and say they always are.
Wow, doing the math, he bought his first house at ~51? That’s amazing.
Bush was also an adherent it seems at times, proclaiming "Affordable Housing Week" and other such nonsense on many occasions from the White House. It is part and parcel of Compassionate Conservatism, and itself an anathema to Conservatism.
Lord help us when both parties pander this way, and there is not yet a strong enough, viable third party conservative route to challenge it.
.... makes too much sense. He must be punished
Sadly I think you’re right about both parties.
You can as long as 51% of the electorate pays no taxes...you do it by forced expropriation from the 49%...for a while.
I dont ever remember eading Thomas Sowell wa a Marine!
Yes, Ive read it several times. He was a range instructor for a time for (I believe) pistol.
I don’t think that is correct. I could be way off, but IIRC in a previous article Dr. Sowell stated he had left home at age 17. I remember that because I too was 17 when I left home. So doing MY math LOL, it would seem to me he would have been 38 when he bought his first home. I believe Dr. Sowell is 78 at this time. 1969 was 40 years ago...so yes, he would have been 38.
This is why socialism is so dangerous to a democracy.
The strength of a democracy depends on the strength, intelligence and skill of its citizenry.
This is just a brilliant observation by Sowell.
Well said...Unfortunately the numbers on the dole are increasing rapidly with the help of our government.
I’ve been banging together houses for three decades.
A basic house is illegal now.
The nice houses I grew up in are illegal.
I’d say houses could be half the price, and they would be fine.
The local governments are motivated to have houses cost as much as they can so that they can tax on the higher sales cost and yearly tax on the higher value.
Existing, got in cheap, or less, owners like more expensive houses because it makes their house more valuable, with out them having to pick up any of the cost. I.E., everyone wants to live in a expensive neighborhood/town, but have a non expensive house.
Existing home owners are against lower cost housing/methods/materials because it makes their previous purchases less valuable.
Banks, finance, governments all like manufacturing higher home prices.....until the market collapses. Where upon the government raises taxes on existing home owners.
Rise, lather, repeat.
Poverty is job insurance for government.
Why does it seem that common sense is in such a short supply these days?
Thomas Sowell...if only he’d been elected our first black president!
Good post...and thanks for posting it!
I’m sure you’re right about construction and costs today vs years ago.
25 years ago I built our own place from bottom up, the only thing I contracted was drywall. It was a great place and I built it reasonable.
I see new home construction now and don’t recognize much of it, materials and methods have changed drastically. I understand fees and permits are out of sight and most everything has to be engineered. I really doubt I could do it now.
Those are excellent observations.
>> The ultimate irony is that increasing government intervention in the housing market over the years has generally made housing less affordable than before, by any standard.
The gov’t demanded the lenders provide mortgages they would not offer through the course of regular commerce. The intervention created unrecoverable fractures and opportunism. Many typical first-home buyers suffered from this exuberant ‘seller’s market’ — the artificial housing boom created by free-n-easy mortgages. I bet many young responsible couples paid a serious price for a volatile housing market they could not possibly understand.
My wife and I followed the same general pattern, renting and moving up till we bought a house we could afford. Now the govt. wants to bail out people and companies who don’t have any responsibilty. We have 2 daughters in college, and God knows we don’t get much of a break because we “make to much”.
We make to much because my wife went back to school and got her degree, while working full time and raising 2 lovely children. We make to much because I get up at 3:00 AM to put in extra 12 hour shifts at plant where the temperature is frequently 125. We work hard,pay our bills and we played by the rules. Don’t get me wrong, I am thankful for the way the Lord has provided for us. And I don’t mind helping the truly needy. We give freely to our church and other charities, because as Christians we are called to help. But, I am tired of hearing that I need to pay more to help people that wont help themselves. If you reward bad behavior, you are guaranteed to have even more bad behavior. So now, I can look forward to ever more taxes while the “downtrodden” live on fruits of my labor. I am PO’d beyond belief. Thanks Leaders. Appreciate it. Also- Thanks for feeding my children your PC crap- it kept me on my toes trying to work overtime and undo your damage.
I was going to apologize for my rant.But, I’m not sorry. I am angry.And I think I have a right to be angry.
On the other hand, if you are Jimmy Carter, evidently you can get away with building them to fall down in a few years. :-)
Frankly, there is less need of engineering now, as the quality and uniformity of the materials is so much better and consistent.
Just for a single example. Adhesives. We didn’t have them and now they are just fantastic, especially at the frame/sheeting level.
Anyways, what I was getting at was a small, cozy little shack, or ranch, a kind of basic, safe shelter is by size, shape, form....illegal.
So, what modest workers could afford, on their own, are now driven into triple cost, union/public built housing that the taxpayer has to be taxed for.
People might not like having a part of town of small houses, close together, but it is way way better to have people paying for their own shelter than everyone being taxed, forever for government housing, that the people will never own, will not be cared for or improved upon and which will require taxes forever.
Yes, you do.
For most of my life I’ve not had even an average income. My family definitely does not now (pay cuts at my old job, followed by everyone being laid off, and now I am struggling to start a small business.) But I bought my family’s current, very modest home with CASH, by saving for it. For a few years I used to commute 80+ miles to a job - they’d let me basically camp out there, a few days at a time, and I often slept on a TABLE in the break room. My car was a Honda CRX (lasted over 250k miles) and every car since then has been a smallish high mileage model (except I also have a rarely used van for heavy hauling, and my wife has a minivan “for the family”.) I also saved up for every car, since that CRX. Today, we are getting by because I saved money for a “rainy day”. Do we get help for doing the right thing? No, in fact, we are penalized for it.
Now... Obama’s policies will probably help us, financially, at least in the short run. But I’d rather they do not get implemented, because they will damage my country, and our daughter’s future...
I think there’s plenty of anger and dismay out there - the question is how to direct it into something positive, and into a better future for the USA and our children.
None of this is new to freepers, of course. But, what gets me is what is left unsaid: Just where, exactly, is the gov't going to get the money "needed"?
We all know...
We bought 2.3 acres of sand hill on an agreement for deed when we were in our late 20s. We lived in a park-model trailer on that land and built a small house ourself.
We built the house in $600.00 dollar increments. That is, we planned the construction so that we could do each phase with $600.00. The only work I hired out was the initial ground leveling ($600.00). I dug footers by hand and poured a monolithic slab ($600.00).
Every time we could set aside $600.00, we would complete another phase: Frame material ($600.00); roof covering ($600.00); Rough plumbing ($600.00); rough electrical ($600.00).
I learned to do the work myself, and sometimes would get friends in the different trades just to check my work or give me advice. By the time I finished, I had a small library on home construction built up, and a whole lot of experience. I made mistakes and learned to correct them.
We never went to the bank for one dime.
Later we sold that house, and we bought a second house, debt-free. No mortgage. We never had a mortgage on the house we own now.
My sympathies run very shallow for able-bodied people who depend on government for “affordable housing” or complain about banks.
I agree. I am on temporary layoff, but we to saved for a rainy day and we are fine. I want for our children a safe, secure and free future, even if we have to sacrifice now. This is our responsibility and duty. But how do we direct our anger into something positive? I honestly don’t know, but our freedoms and future are slipping away at an alarming rate. Perhaps discussing it is a start, but if I am completely truthful with you Paul R., I am losing faith in the American people. I just hope to God I am wrong.
You said “for a while”. I believe Zero thought he would cook the goose that lays the golden eggs and he and his buddies would enjoy roast goose for some time to come. I don’t think they anticipated the goose might just move on down the road and he and his buddies would be left with nothing. I think folks in this country who still have some wealth have been smart enough to put it out of his hands. Unfortunately in so doing it is also not working in the economy. I don’t think any one anticipated just how rapidly this shock could apply the brakes and bring things to a halt. Right now most are buying only food, fuel, and ammo. Zero can print all the money he wants if folks are hunkered down they won’t come out of the bunker.
Dr. Sowell was, iirc, mainly a photographer for the Marine Corps. He’d been a hobbyist before his service.
Ah yes! You are correct. My oops.
Thomas Sowell is always worth reading.
So true. Perhaps this is part of why conservatives lose unless conditions are so bad that emotions and specifics start to come together, as they did at the end of Carter's thankfully short time in office.
Ask any realtor or decent carpenter who those builders are or which neighborhoods to avoid. They are always poorly built, usually of the lowest possible quality materials: instant slums that cost the buyer from day one and never stop and then are hard to sell. These houses make Jimmy Carter's shacks look more solid than the proverbial brick outhouse. Trailer parks without the wheels.
I know; I’m thinking, he’s my parents’ age or older - and they bought a brand-new from scratch house age 31. I know the situations are different (he’s black, so more difficulties early on?), but still...to wait until Reagan is in office!
He’s too old to worry about; Walt Williams too. Obama will just let these black (real black) apostates die. Larry Elder (LOL the name here) is another story.
Aspenerization is one reason the rich are so enamored of “affordable housing” and public transit. They need the worker bees living near and riding light rail to work, don’t want cars congesting and cluttering up the streets in the area.
“range instructor for a time for (I believe) pistol.”
Does he still give lessons? I’m pretty bad at pistol shooting. LOL
(actually, I just need to practice more. I’ve only shot a pistol twice now)
Sowell's genius comes from his ability to take complex economic concepts and making them so understandable that even a dem could "get it". Stunning.
If that was a bummer sticker - I'd put it on my car! Insightful.
Thank you for my Recommended Daily Allowance of Sanity.
Brings back memories.