A bit about myself before I launch into what could be a rather contentious (I hope that it is more thought-provoking than contentious) group of issues that seem to be tied together in rather an insidious fashion to further the interests of a few at the expense of the many. I am a minority of a minority of a minority. I live in the mainstream American culture, but have never forgotten the traditional values my elders taught me. I observe the greater American culture and how every smaller culture plays it's part in shaping and directing how American mainstream culture changes. I have written a couple of diaries about culture and cultural differences and how the greater, normative American culture tends to think that there are no other cultures or languages out there.
This diary is going to poke a bit at this commonly-identified, but little acknowledged, monolithic, 'standard,' mainstream culture. If you would rather not think about the larger implications of economics and the selling out of real, live humans in the interests of theoretical, incorporated beings that crave only more profits at the expense of all else, I suggest you find another diary to read. If you feel compelled to call me names or otherwise deride my writings because you feel insecure or uncomfortable or angry or otherwise upset, check to see if your feelings are really any of my concern or responsibility (spoiler alert: your feelings are yours and yours alone. I take no responsibility for them.)
Disclaimer: I work in public housing. Some of the residents I work with have no income and cannot afford to live anywhere else. I can hear some of you pipe up darkly, "They could live on the streets." Well, yeah, you are absolutely right. But, I come from a world view where shelter is a basic human right, not a commodity. Everyone deserves a home, to be safe and dry and warm. They deserve a home even if they do not have a job or cannot hold down a job. So, if you disagree with this statement, you are really not going to like anything else I have to say.
Housing is a basic human right. It should not be withheld for lack of money, lack of employment or any other reason. We all have a basic human right to it, just like we should all have the basic human rights to education, medical/dental/mental/etc care, whole foods, and clean water, just to name the biggest of the basic human rights. We are now seeing hedge fund types invest heavily in our housing infrastructure. They are buying up 'shares' in the private and public housing sectors at an alarming rate. They are setting rental prices far and above market rate and insisting that the new prices are "market rate."
But, what are "hedge funds?" It sounds like a scary term, from a non-investor stand point. From a monied interest, it sounds like a trip to the candy store. A hedge fund is essentially a place for people with lots of money to pool their funds to buy interests in various businesses that are looking for investors. According to Forbes, 'a hedge fund is a type of investment partnership in which the investor contributes money and the general partner manages the funds.' Spread the risk across many investors, that way one person doesn't take the entire financial hit.
"But, AKBear," you might be asking, "What does human rights have to do with why hedge funds should be excluded from buying stakes in real estate?" Excellent question. When we trade realizing a basic human right for realizing the ethereal idea of a profit-driven market, we lose not only a little bit of our humanity, but we also deny others their basic rights. To put it into another perspective, let's take a look at human history. Each and every time some group of humans works actively to curb, curtail or otherwise infringe upon the basic human rights of another group of people, humans fight against each other. Each and every time there has been a growing chasm between the people with the most money and the rest of the humans, the people hoarding money have ended up having to let go of their grasp on money. The interests of the many outweigh the greed of the few.
Some monied interests want to keep wages at historic lows while others are fighting now for a raise to the minimum wage. The fascists of this country are fighting to maintain the imbalance of wealth, the perpetuation of the gap between the monied interests and the rest of us. We are watching the prices on everything go up while our wages have stagnated for more than 40 years. Most of us have not seen a real pay increase in far too long, other of us have not even seen COLA (cost of living adjustments, which are rather a joke as they never seem to increase nearly as fast as real-life prices at the grocery store or the rental market) in decades.
The stores that used to cater to the burgeoning American middle class that emerged after WWII went through a rather catastrophic disaster during the Great Depression of 2008. These stalwarts of the American middle class, these haberdashers of the American blue collar and lower white collar ranks all had to diversify and figure out how to make ends meet once their target market was so egregiously hit by the '08 Depression. Sears, JC Penny, Macy's, just to name a few, all had to re-evaluate how to keep people spending money they no longer had. We saw the rise in popularity of that old practice of "the lay-away," where you could pick out the articles you needed and then make monthly payments. Once the items were paid off, you go to the store and retrieve your items.
Why are more stores doing this? Because Americans simply do not have the savings accounts or the credit limits they once enjoyed. Our paychecks are barely keeping up with our bills and, for many of us, we are still living paycheck to paycheck because the costs associated with living have skyrocketed while our pay has not budged in far too long. But, the kids need socks and underwear, they also need food in their bellies. We gotta figure out how to pay the electric, gas and water bills plus keep a roof over our heads. Our savings accounts were long ago exhausted after years of sporadic or non-existent employment. Some of us made the error of getting sick before the ACA took effect and now are burdened with thousands of dollars of medical debt.
Do you realize that when my grandparents' generation (now I understand why they are called the Greatest Generation -- compared to the Boomers, the Greatest Generation actually were quite progressive, humanist in their philosophy and actually saw great changes as well as fundamental leaps forward in civil rights. The Boomers? Well . . . they gave us W. and Bush I and Reagan . . . just sayin . . .) were growing up during the last Depression, their housing costs were roughly 1/3 of the family's income (usually a single income from an adult male in most urban centers at that time in history)? Do you realize that in order to afford an apartment in New York City at the same rate (1/3 of your income), you'd have to earn about $80,000/year. So, that would mean a minimum wage of about $41.67/hour. If the fascists were apoplectic about $15/hour minimum wage, imagine their reaction to calls for $41.67/hour!
Which gets me back to housing prices in my neck of the woods. There was a diary here that had a great map of how much a one-bedroom apartment costs and how much one would have to average to be able to afford living in that one-bedroom apartment. For the Portland, OR area, the minimum wage to be able to live in a one bedroom apartment was $16.16/hour. I also saw a news article, I think it was either WW (Willamette Weekly) or the O (the Oregonian), that showed that if we wanted to return to the 1950s, with one adult going off to earn the bacon while the other adult stayed home to look after the 2.3 kids, the minimum wage would be close to $45/hour.
Now? Well, I can share what I have been living with for the last five years. I live in a 2 bedroom, plus bonus room (oversized closet, really -- 6'x10'), one bath, no dishwasher, w/d hook-ups and our fridge has to be placed outside of the kitchen because there is no room in the kitchen for a fridge. Our windows are old, wooden framed, single-paned glass affairs with half of the sills filled with wood hardener and the other half rotting away. I earn just under $2000/month (my partner's hours were cut from 30 hours to 10 hours about three months ago . . . so, I am paying rent and whatever else I can afford). Rent is $1200 for a house in desperate need of repairs, servicing and other help that our landlady will not provide. Her mortgage payment for our home is roughly $300/month and a little more for taxes, so she's still got a healthy pile of cash for repairs and other things that houses routinely need. This is assuming she still has a mortgage on this house as she bought it in 1994 . . . she may have paid it off by now.
She also recently told us that we were getting a good deal for the house. I bit my tongue. If I ignored or delayed any of the requests for maintenance at the properties I manage, there would be hell to pay. This landlady ignores our requests for repairs for years on end. We just got 2 cracked panes of glass replaced after 5 years of requesting new panes that were cracked when we moved in. Wonder how long it will take for us to get the molded and mildewed sections of window sill replaced?
I know where she got her erroneous idea that we are getting a good deal. She went to Zillow and looked up her property. The thing is, the listing on Zillow is not accurate. We have no fireplace, we have no dishwasher, we have a tiny bathroom that has crumbling grout, mold growing between the moisture barrier and the tile and slow plumbing. We do not have the garage and shop that are listed; we do have a leaky tin roof on poles and a tiny shed that's just large enough to put the lawn mower into. We do not have a garbage disposal in the sink. Our stove/oven and sink all date back to the 1960s with a burned-out rear burner (she's known about that for the last 4 years, but still has not replaced the element or just gotten us a new stove), the fridge is a refurb that is probably closer to 10 years old and I am afraid to look to see how old the furnace and water heater are because I know neither of those have been serviced in at least 5 years -- that's how long we have been here. The roof is in need of a complete tear-down and a new roof put on. Our kitchen floor is in need of a complete tear-down, and new sub-flooring and floor put back in; we can't mop our kitchen floor as a damp mop would only compound the mold/mildew problem under the linoleum and a wet mop just leaks down into our basement.
I can see charging a premium or market-rate for a property that is kept up, and to a landlord who actually does routine repairs and makes sure that everything is in good working order. As it stands with this place? We have dry-rot throughout the floor and subflooring, we have mold and mildew problems on all our windows, our plumbing gets plugged up for weeks on end (as the landlady is less than responsive to repair requests), we were missing a smoke alarm for 6 months, our front screen door only had half a latch for 5 years, the chimney (for the old coal furnace that is no longer there) is crumbling and falling onto the roof, the gutters need repair, the roof needs to be replace, the paint on the wayward side of the house is sloughing off, the siding is failing all around the house, there are cracks in the foundation.
Yeah, keeping up a house is expensive. And, my story is not all that different than what other people are going through right now. So, why don't I just move? Because there are worse landlords out there who charge even more than this lady. Yeah, I got a house that's falling down around my ears, but I also cannot afford to move because I'm paying more than 50% of my income in just my shelter costs while my landlady makes quite a bundle off of the higher rents and lower mortgage payments. How in the world am I supposed to save money to move to a more expensive place with, perhaps, even worse response to requests for repair? If I push too much for necessary repairs to this house, my landlady will just give me a 60-day, no-cause eviction . . . then where am I supposed to go? There are no rentals that I can comfortably afford and who's going to rent to someone who pays more than 50% of their income in rent? Most landlords look at income and figure if their price is more than 1/3 of your income, you can't afford to live there. Rather than adjust their prices down to accommodate for stagnant wages, they'd rather just deny housing and continue to charge "market rate," as that is much better for their bottom lines.
When we allow the market to be controlled by the monied interests who only seek monetary profits, we do not receive the necessary market adjustments. In a fair and just market, if I had a problem with my landlady, I'd just give my notice, find a new place and move to another property. In this market, there are no other places to move. Slumlords are making killer profits and their tenants are trapped by poverty, a stagnant rental market and being priced out of owning their own home. Housing prices are skyrocketing out of control in most metropolitan areas. Rental prices are rising faster than our paychecks while care and upkeep of these properties is plummeting as landowners know there are no other options for renters.
What we need is comprehensive reforms to keep investors out of our most basic of human rights, the right to fair and affordable housing. Landlords should be held accountable for regular maintenance and there should be regulations in place to ensure that housing prices are kept in line the the minimum wage, not market rate.