Where Are All the Middle-Class Rentals?

[Purveyor]

The rent affordability crunch moves up the economic ladder as most new apartments are built to luxury specs

by Patrick Clark
June 24, 2015 — 11:47 AM EDT

Ryan Dravitz and a roommate shared a spacious apartment in Denver, paying $1,200 a month for 1,200 square feet in a high-rise building a mile from the center of downtown. Then, in 2012, the rental market exploded. The roommate moved out, and Dravitz, 26, moved into a house with four others. His old apartment is now renting for $2,000.

“Luckily, I got engaged recently, so we have a dual income,” said Dravitz, a bank teller and freelance writer and editor. Even so, it’s unlikely the couple will be able to afford to stay downtown, where rents are rising rapidly, and new rental buildings with such amenities as golf simulators and dog spas are becoming increasingly common.

Skyrocketing rents and multiple roommates—these are the kinds of war stories you expect to hear in space-constrained cities such as New York and San Francisco. But the rental crunch has been steadily creeping inland from coastal cities and up the economic ladder.

“For lower-income households, affordability has been a problem for decades,” says Stockton Williams, executive director at the Urban Land Institute’s Terwilliger Center for Housing. “Now you have people in middle-income, two-earner households who are paying unsustainable rents.”

For builders, the logic is clear. Profit margins are often better at the high end, and costly such amenities as floor-to-ceiling windows and high-end appliances help entice new tenants—as long as there's a market of renters who can afford the pricier digs.

more...

http://www.bloomberg.com/news/articles/2015-06-24/where-are-all-the-middle-class-rentals-

[upaloopa]

1. So I just bought a new house on a VA loan.

Being drafted in 1966 and sent to Vietnam had it's benefit. I am paying a monthly payment that is less than the average rent on a home here. I paid nothing down.
FHA loans are similar. And VA and FHA loans are 3.75%. FHA is starting a program to help those with lower credit scores. If you can swing it buying may be better than renting. You build equity and get the interest and tax deduction on your tax return.

[RadiationTherapy]

3. Another out of touch wealthsplainer.

Congratulations on your benefits. Sorry you had to go to war in order to receive the tiny benefit of a low interest loan. That's great. It's cool that you have access to that. Many more do not. Go Hillary.

[whatthehey]

6. Strange, even now 64% of the country are homeowners

They are hardly billionaires separated from the common man. Demonizing veterans who can finally afford their own place but still need a zero down VA loan is not really sticking it to the plutocrat oppressors.

[RadiationTherapy]

9. I'm sorry my point was poorly made.

First, one doesn't have to be wealthy to wealthsplain down to others. Second, I had hoped to communicate that a low interest, zero-down loan in a dysfunctional economy is a tiny pittance for having dealt with war horrors, but I am not a vet and I may have communicated poorly there. My apologies.

[upaloopa]

11. I have no words for you

Mores the pity

[RadiationTherapy]

15. I just get so tired of being provided "simple" solutions like "go buy a house"

It is so reminiscent of "bootstrapping" language. Sorry if I was sharp in my wording.

[Liberal_in_LA]

12. he/she was just describing a housing option, not rubbing it in ur nose

[RadiationTherapy]

13. They described very limited housing option available to a few.

And a pittance for having had to endure war. The advice does nothing to address the op and sounded like Bush telling people to go buy. I think many people realize that giving financial advice that begins with, "go buy a..." is somewhere between gauche and rude.

[Bluenorthwest]

14. One of the most obnoxious, self righteous and absurd posts I have ever read. You are snarking at

a Vietnam vet for taking a VA loan. Are you a Republican?

[RadiationTherapy]

17. I am snarking at how small of a benefit that is and how few it is available for.

I am sorry for the sharpness of my initial comment, but I am comfortable enough to let it stand unedited. I appreciate military service - including upaloopa's - and I wish their benefits were far greater. And I wish we had a functional economy. And I don't see Hillary Clinton being any help in any of these matters.

[PasadenaTrudy]

2. Every new

apt. or condo complex going up here in SoCal is "luxury." My 4 apts certainly aren't luxe, lol. We all share a washer and dryer, bldg. is 100 years old and has original floors, crown mouldings, built-ins, etc. I also charge below market and usually have single grad students living here. I don't care about getting rich so it works for us all

[alarimer]

4. $1200 for 800 sq. ft here.

One bedroom, but then this area is outrageously expensive.

No one wants "middle-class" apartments in their neighborhoods because of the people that end up living there. But high-end is okay because it keeps the riff-raff out.

[MisterP]

5. this applies to houses too--think your local mechanic can save his way up to an Eichler these days,

black or white?
http://www.eichlernetwork.com/

[hobbit709]

7. Went the same place the middle class went-into oblivion.

[whatthehey]

8. Well one answer is not downtown in major cities

If people need to be able to walk to a selection of organic Ukrainian delis, MLB games and symphony galas, it comes at a cost. People pushing the utopia of dense inner city living always forget that it nigh inevitably eventually becomes segregated into boutique high $$ enclaves and ghastly tenement hell-holes with little in between.

[Avalux]

10. Young adults don't want to buy homes.

With less than stable incomes and delaying getting married, home ownership is down. They don't want to invest in a home purchase if they don't have job security, and so many of them can't afford to rent such 'luxury' places either. It's common among 20-somethings to rent a house with several other people so it's affordable. The "American Dream" that was the core of this country for more than half a century has no relevancy to young Americans.

Interesting study from the University of Iowa:

http://tippie.uiowa.edu/news/story.cfm?ID=2662

[Adrahil]

16. $2000/mo is more than I pay on the mortgage of my 3000 sqft house! n/t