from my mind to yours...

May 2000
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On Affordable Housing
Filed under: Politics and Economics
Posted by: site admin @ 8:23 pm

I find the entire debate on affordable housing to be ludicrous, laughable and lame. Here’s why:

First, what does it mean? The definition of what constitutes livable housing depends who you ask. Some cultures have no problem with an extended family of 10 living in a 2 bedroom apartment. Yes, they probably consider it 
cramped, but they do it. Does this also mean it needs running water? What about private vs. communal toilet? What about refrigeration? The problem here is that, without a well defined, agreed upon definition, you cannot have any meaningful debate.

Then, what does affordable mean? Does it mean that people can afford living quarters and food? Does it mean there is money left over for medicine? What about cable TV? Again, I have never seen any clear definition of the term.

Assuming you can define the terms of the debate, you still need to look at who is participating in it.

Business owners are one group that often decry the “lack of affordable housing”. Quite clearly there are two ways to make anything more affordable - either lower the cost of the item, or give me more money to buy it. Business leaders want “affordable housing” because they don’t want to pay people more to do the same work.

Workers complain about a lack of affordable housing - in other words, they don’t want to pay the market rate to live where they want to live.

The bottom line is this: There will always be an “affordable housing crisis” because of the continuing confluence of 3 factors: Business owners want to minimize their payroll costs. Workers want to maximize their living comfort. Real estate developers want to maximize their profits.

Because we live in a capitalist society, none of these factors will ever go away. The only thing that will change is the relative power of each of these different groups in pushing their agendas. A low unemployment economy favors workers, provided they have the skills desired by business owners. Rapidly growing metropolitan areas favor developers who control the housing.

If workers want better housing, they can: learn more valuable skills, negotiate better pay for their current skills, or move to a place that is cheaper to live (even if that means across the country).

If business owners want more affordable housing, they can pay their workers more or make the arrangements themselves to provide it more cheaply (eliminating the real estate developer as a middle man should cut costs).

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