Nothing but Palaces 1

Why don't we have as many homes as people to put in them?

Your humble correspondent is blessed to live in one of the wealthiest counties in the wealthiest large country in all of human history.  Teslas, rare in most places, are commonplace here, though far outnumbered by Mercs and Beemers; Maseratis are a daily sight.  There's even the occasional Rolls.

The same is true of midtown Manhattan, but that's different: when you have millions of people crammed into a small area, you'll be able to find some of everything.  Here, in contrast, from a plane it looks more or less like an ordinary boring suburb, as I've observed many times.  There aren't many obvious palaces, but there are plenty of well-paying jobs, and in this the best economy of most of our lifetimes, there's certainly some sort of job for anyone sober enough to want one.

And yet, our intersections are increasingly plagued by panhandlers harassing motorists for a handout.  Now, these aren't the bums you'd see on a downtown sidewalk, reeking of booze and what booze becomes.  These more resemble ordinary lower-class people; no prizewinners perhaps, but you wouldn't expect them to be literally penniless.  McDonald's would not hire a bum, but there's no obvious reason why these folks couldn't at least flip fries.

Once upon a time, the great attraction of America wasn't merely freedom in general, as important as that is: it was, specifically, the opportunity to achieve economic freedom.  Anyone willing to work could head out into the wilderness, stake a claim, build a farm, dig a mine, or whatever.  They might die from disease or hostile Indians, but barring ill fortune, an ordinary person with no particular means could and often did make a solid life for himself and his descendants.  Most importantly, the "American Dream" included a home of their own, their own private property, built as they pleased and defended with deadly force when necessary.

There are more homes in existence in America than ever before, but we seem also to have more homeless people than in time past.  Now, America has always had drifters and hobos; in the Great Depression, throngs of the dispossessed "rode the rods" underneath night freight trains hoping to find a place somewhere.  As Jesus said, "The poor you always have with you"; there will always be the mentally-ill or the drug-addled to stoned to shelter themselves.

What's new, is the phenomenon of the working homeless: people who can and do hold a job, but still cannot afford a place to live.  In Los Angeles alone, 16,000 people live in their vehicles.  Many others who can't afford cars sleep in makeshift tents and put so much poop on the streets that age-old diseases such as typhus and bubonic plague are returning to California.

Obviously the vehicular folks aren't entirely without resources - it takes money to keep a vehicle legally operational, the more so in over-regulated California.  They have jobs, mostly, which requires at least a minimum of personal responsibility and good sense.  Yet they are unable to meet that most basic of human needs, a roof over their head.  Why?

The left has a mathematical answer they like to put forward: minimum wage is too low.  Consider the map at this website, which illustrates the statistical fact that just about nowhere in the United States can a full-time minimum-wage-earner afford to pay for a two-bedroom apartment.

Well, if all you are worth is the minimum wage, you don't really deserve a two-bedroom apartment of your own.  But how about one bedroom to rest your personal carcass in?  Nope, not that either:

Only in 28 of the country’s counties can a 40-hour-a-week minimum wage worker afford a one-bedroom.

Now, it's easy to look at the underclass and consider that they contributed to their own life problems by making bad decisions, generally involving substance abuse, lack of education, and lack of abstinence.  And that's true, as far as it goes.

It's not the answer, though, as another even more sobering statistic demonstrates:

Out of 473 U.S. counties analyzed in a report, 335 listed median home prices more than what average wage earners could afford...

While average earners nationwide need to spend only about one-third of their income on a home, residents in Brooklyn and Manhattan must shell out more than 115 percent of their income. In San Francisco, residents must spend 103 percent, and in Hawaii's Maui County, it takes 101 percent.

Obviously, spending more than 100% of your income on housing is not sustainable, if it's even possible in the first place.  A few years back we all made fun of New York-based perennial candidate Jimmy McMillan of The Rent is Too Damn High Party - but he wasn't wrong.

If you stop and think about it, though, this situation seems bizarre: In a free, capitalist country, how is it even possible for there to be "not enough" homes for all the people?  It's not like we're Hong Kong and there's no physical place to stack them anywhere.  It seems like a violation of the laws of supply and demand, a puzzler that would have Adam Smith scratching his head.

Which makes it a perfect topic for a Scragged series!  So, let's delve into the bizarre mess that surrounds an availability crisis of that most important of American icons, your very own Home Sweet Home.

In the next article in this series, we'll look at some commonly-given explanations for the problem, and discuss why they don't really cover the issue adequately.

Petrarch is a contributing editor for Scragged.  Read other articles by Petrarch or other articles on Economics.
Reader Comments

I am interested in what drives new home prices. In the 15 years since I moved to this community, prices have escalated by 400%. Someone is making a killing. Is it the land sale? The materials? The builder? We have a lot of land here that is still open, but of course you need a land use permit, and I guess that determines who makes the money. Politicans never make enough to get by on...

September 8, 2019 3:06 PM

In our area, at least one busy intersection is manned (and womanned and dogged) by what appear to be professional panhandlers, who are dropped off and picked up regularly by a large SUV. I imagine there's a route the SUV guy services, and possibly a dorm and dining hall for them. If I were running that show, I'd probably pick an area like one of the wealthiest counties in the wealthiest large country in all of human history.

September 8, 2019 3:17 PM

Part of the problem is that housing has been priced out of the reach of many lower income people, like the seniors and disabled who are on fixed incomes that simply don't rise with the market, or those who are very low skilled and can't make enough to afford a permanent home. This is especially true when you factor in the costs of utilities, and the other costs of simply maintaining an home (groceries, household needs like TP and cleaning materials, etc). Rising minimum wages are a contributing factor as well, since as it rises, so do the costs for all commodities, goods and services, in response to that rise. Americans should not be reduced to panhandling, but society has decided that is "better" than working for their wants.

September 8, 2019 3:34 PM

The number of panhandlers can be explained by the rise in people who aren't genuinely needy who have realized that they can make a bunch of money tax free just sitting with a sign. There is a Stossel youtube video about this but in short, those people could get regular jobs, they just don't want to.

I don't believe that a single person earning minimum wage was ever able to afford a one bedroom apartment, ever, in history. Rather, those people continued to live with family and everyone pitched in to keep the family afloat, or later in history people got other people to share expenses with aka roommates. Before welfare was a thing people worked together in families and communities to survive and eventually do better and get ahead. All that is gone now.

September 8, 2019 7:53 PM

@Lee: Excellent points. And very likely at least a part of the situation.

September 8, 2019 8:44 PM

We have done some charity work feeding the homeless. They are the same people we saw on the street corners. It is the work they do each day to provide booze and drugs for themselves. Our city recently outlawed panhandling on street corners so now they hang out near businesses until the business runs them off. The charity work showed that most of them have social problems that prevent them from being hired. They get into arguments and fights a lot. Most nights they spend in free shelters and get free meals. Of course where "better" is offered, they will find a way to get there. Communities that are "big hearted" then end up with more.

September 8, 2019 10:34 PM

Many do, yes. And many also have mental illnesses that impact their ability to acquire and keep jobs, often for related reasons to the "social"problems do. Some of the drug or alcohol abusers are simply trying to self-medicate their "inner demons" of mental illnesses. But among the pan handlers we're seeing now are many such as those described by Lee in his(?) comment, not truly that needy, just lazy. Places like CA are magnets with their "extra benefits", but their laws are getting so squirrely now, that the laws are contradicting each other and effectively "cancelling" some of the benefits of being there, for the homeless populations.
At the bottom line, we as a society, need to demand accountability of them too, and expect civil behavior, respect for others'rights and property, etc, same as we do the rest of our fellows in that society. Even the majority with mental illnesses can get therapy and learn better behaviors, and the rest certainly can.

September 9, 2019 10:37 AM

I'm female, no way to tell from just my name though.

Anyway, I have lived in a metropolitan area with homeless people who you came to understand were mentally ill and honestly they were not often panhandling, sometimes, but mostly they were just there.

I currently live in the suburbs, and we don't have any homeless people in this area, but we have panhandlers. There are 2 different kinds, the ones that will approach with a story and often a prop like a gas can, and the ones that stand on the median at stoplights with a sign, usually saying they are veteran who is down on his luck, occasionally a woman will have a sign to the effect that she needs to get home that somehow she got stuck in my town and hasn't the cash to get home.

These aren't mentally ill homeless people, these are outright scammers.

The Stossel youtube video is titled Freeloaders:Panhandling and is about 8 minutes long.

September 9, 2019 3:35 PM

No great surprise to me, as it's my middle name and I'm female too. I know. We have both sorts here, in my home town. We have ways to donate within our city, for those truly needy, including several converted "parking meters" without directly handing them money, which I won't do, whatever the story. We also have a VA hospital in town, so a lot of vets, legitimately, some of whom are still homeless, although the homeless program at the VA has permanently homed many of them since it began a few years ago. If one claims to be hungry, I'll buy some food and water for them. NEVER cash, however. TOO many are just freeloaders, and I'm not rich either.

September 9, 2019 4:40 PM

I remember giving a donation to a scammer because he made me laugh. It was entertainment and we both knew it. Yes you can make good money begging. I believe Dickens in Oliver Twist showed how it was done back then.
I prefer to give to those who don't beg: the old man looking into a restaurant window at meals he could never afford in India. An old man nursing a cup of coffee so he could stay warm in the heated restauraunt. There are times for kindness to those less fortunate. But that is feeding them for a day, not changing their life which would be the greater good.

September 9, 2019 4:46 PM

Very true, and sometimes,at a given moment, that is needed, but it's better to steer them to assistance to break the cycle, if they're truly needy, and if not, they'll hopefully get the message that you're not a "soft target".

September 9, 2019 5:02 PM
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