The reclaimers, homeless residents and supporters are protesting the shortage of affordable housing. The action they took, taking over vacant homes in LA without a lease and without permission.
I question how often this happens in Baltimore City due to the number of vacant homes.
The consequence behind these acts, they hoped would be to push landlords and governments to make bigger changes to the housing system.
The video states, “Incomes are too low at the bottom. So these households can’t build up any kind of savings, any rainy day fund, which means that as soon as they lose hours or lose a job, they just can’t pay their basic monthly bills.”
It simply turns into a numbers game, especially when a Charles Schwab Modern Wealth Survey in 2019 showed that 59% of Americans say they lived paycheck to paycheck.
To make matters worse, in March 2020 40% of households making less than $40K a year lost a job, according to the Federal Reserve.
The math turns out, when there is no income for American households that are living paycheck-to-paycheck, rent cannot be paid. This places an emotional and financial strain on the family that’s renting the property. This places an emotional and financial strain on the landlord as well.
The article shares that, “This week, the Biden administration unveiled an action plan to boost the supply of affordable housing and cut down the housing shortage across the United States. Officials say it should ease the housing supply shortage in five years.”
While it’s nice to hear those steps are being taken, 5 years is entirely too long. We’ve already seen the impacts with historically low interest rates, the shortage and housing Supply to date, and this era of sellers that do not want to sell to maintain their low interest rates. So many factors that play into low supply and high demand.
“That creates a huge hurdle in the current hot housing market, where investors with cash offers are buying up more property than ever to rent or flip. Investors bought a record 18.4% of the US homes purchased in the last quarter of 2021, up from 12.6% one year earlier, according to a Redfin analysis of county records.”
With investors continuing to purchase properties with all cash or well over list price, this causes even greater difficulty on the renters that are living paycheck-to-paycheck and they are unable to save an appropriate amount for a down payment.
Or the renters that have families, this will further prevent them from owning property which is a true metric for building generational wealth. Not having that property to call their own makes it that much more difficult to be able to pass down the property through generations or even be able to leverage equity that is built in their own home as the years pass.
The homeownership gap continues to grow until more supply is created. Raising rates not only affects investors but more importantly it affects the spending power and budget of a first-time home buyer.
Especially when, “Rent in the US hit a new record high in April, and is expected to keep rising. The national median rent was $1,827 per month, up 16.7% from a year ago, according to a report from Realtor.com.”
Read the full article here: https://www.cnn.com/2022/05/21/success/black-home-buyers-housing-market/index.html
