Following the success of our guide on “How to Become Homeless,” here are a few more suggestions. We spoke of earthquake, fire, foreclosure, and domestic disharmony as popular methods of achieving homelessness. Another strong force has been the change in entire societal institutions. In Looking Up at the Bottom Line: The Struggle For the Living Wage, Richard R. Troxell describes some of the ways in which large demographic segments have been rendered homeless, especially young men and single older men. He writes,
Adding to the complexity of homelessness was the loss of several million SROs (single room occupancy units) when motels and cheap apartments were torn down and replaced with condominiums or made into parking lots. Another dynamic affecting our nation’s poor was the decision by the YMCA, the Young Men’s Christian Association, to leave the SRO field of housing.
Back in the day, and we mean way back, even a family of lower economic status could conceivably be living in a large, rambling house. Almost any house could be made into a boarding house. Rooms could be rented to traveling salesmen, or teachers (who were not allowed to be married), or even actors.
More recently, the trend in houses became smaller, yet more open. It’s much more difficult to carve out a space for an extra person or family. Now, cities and neighborhoods and housing developments all have rules about how many unrelated people can cohabit, how many cars per household, how many toilets, and so on. Nobody’s home is their castle, not if they want to rent out a room. This is bad both for homeowners who need some extra cash, and for people who need cheap temporary digs.
If rental housing is available, the prospective renter is faced with numerous hoops through which to jump. High move-in costs, don’t get us started. First, they charge you to even look at the place. Yes, there is a fee to even apply. And if the manager is crooked, you may expect more special fees to be extracted, down the line. To move in requires a lump sum of first and last month’s rent plus security deposit, with of course more deposits for special circumstances like pets.
Not to say this is necessarily wrong. It costs a lot to refurbish a trashed apartment, and people can be pigs. The self-justification is, “So what? It’s the landlord’s money.” Maybe so, but he’s gonna get it back from all the other tenants. For that kind of vindictiveness, everybody pays. It may be necessary, out of fairness to landlords, to pay the equivalent of three months’ rent up front. But it’s not easy. Here’s the situation, as described in Looking Up at the Bottom Line:
More than the minimum wage is required in every state to be able to afford a one bedroom apartment at Fair Market Rent, as set by the U.S. Department of Housing and Urban Development
This is why America is seeing a lot of economic homelessness, which is what happens when even those who are working full-time can’t afford a place to live. You are invited to learn more about the Universal Living Wage, which is expected to end homelessness for over 1,000,000 minimum-wage workers and prevent economic homelessness for all 10.1 million minimum-wage workers.
We have talked about Jimmy McMillan, who got a lot of attention in last year’s New York State gubernatorial race. His platform, “The Rent Is Too Damn High,” inspired AnnaMaria Andriotis to explore the question in The Wall Street Journal.
She relates how, in the midst of a phone conversation with another reporter, McMillan stopped a passerby on the street to ask if his rent was too high. And one of the examples she gives of impossible rent comes from Austin, Texas, coincidentally the city where Richard R. Troxell lives and works with House the Homeless. Andriotis writes,
In Austin, Texas, a new two-bedroom two-bath condo runs around $1,800, but cost $1,200 before the downturn, says Jack McCabe, CEO of McCabe Research & Consulting, which tracks the housing industry. In Austin, income fell 4.9% to $35,522, making that 35% of income threshold a meager $1,036 rent payment.
Andriotis also mentions the mysterious formula that addresses the question, “How much rent should a renter pay, if a renter could pay rent?” She writes,
Many personal finance experts say you should spend no more than 35% of your take-home gross income on rent (not including renter’s insurance) whether you live in a high- or low-cost area.
Wait a minute! Just a little while ago, the experts were telling us not to spend more than 30% of our income on rent. Now it’s more. As responsible citizens today, we are supposed to feel as wise and mature about paying 35% as we felt a few years ago when the experts advised us to put a lid on at 30%. And it’s not as if we have a choice about it. Even 30% and 35% are not the worst. Apparently, some people spend more than 40% of their income on rent. That is one of the criteria for eligibility when Habitat for Humanity helps a family build a house.
You know what? It used to be 25%. That’s what the financial advisors used to say. Within living memory, it was taught in home economics class. You were a prudent money manager and a good citizen if you followed the rule of not paying out more than a quarter of your income for rent. It’s insidious percentage creep, meant to fool us into thinking we are doing the grown-up thing by handing over such a large proportion of our income for rent. They keep raising the bar, and pretending that nothing is amiss. They’re messing with our heads, and it’s positively Orwellian.