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National
New Report Shows Rising Cost of Housing Reaches Deep Into the Middle Class
Although households shouldn't spend more than 30 percent of their gross income on housing, the gap between stratospheric real estate prices and mostly stagnant wages increased in the past five years not only on both coasts and in cities, but also in the Midwest and in suburbs nationwide, report New York Times writers Janny Scott and Randal C. Archibold, with new Census Bureau data showing that the housing squeeze has especially affected renters and ''reached deep into the middle class.''
They quote experts and cite troublesome figures. ''Housing prices have gone up much more than incomes have,'' said New York-based Regional Plan Association Vice President Christopher Jones. ''Clearly, you can't sustain that sort of imbalance over the long run. There's only so long that housing prices can go up without sustained increases in income to support them.''
For example, in Temecula and Hemet, southern California, 74 and 73 percent of renters spent at least 30 percent of income on housing; while in Boulder, Colorado and in College Station, Texas, 47 and 46 percent of renters spent at least 50 percent. For Staten Island and New York City the numbers of those paying at least 30 percent for rents were nearly 60 and more than 50 percent, respectively.
National Association of Realtors economist S. Lawrence Yun thought renters in those and similar cities might want to spend more on housing because of good schools, better homes and a higher quality of life. ''There is certainly a concern that people are devoting a large portion of their income to housing,'' he acknowledged, not neglecting to attribute it also to ''the more limited housing supply.''
But homeowners also bear a much heavier burden, the writers observe, noting big increases among those paying at least 30 percent of their income for mortgages in suburban counties such as Loudoun, Virginia; Morgan, Indiana; Nassau, New York, on Long Island; or Bastrop, Texas; and in the unincorporated Florence-Graham area southeast of Los Angeles, where more than a third of residents are poor, and where the 30-percent-payment figure jumped from 17 to 43 percent within the past five years.
In general, poorer cities had the highest overall percentages of homeowners spending more than 30 percent of their income on mortgages. In El Monte, El Cajon and South Gate, California the figures were 73, 69 and 69 percent, respectively; in Newark, New Jersey the figure was 72 percent.
Los Angeles County Economic Development Corporation senior economist Jack Kyser pointed out that poorer cities are often the only ones low-wage earners can afford if they stretch what they make, with El Monte and South Gate seeing a large Latino influx. These communities are within easy drive to employment centers and near public transportation, he said, and newcomers make the best use of both.
To illustrate some of the nation's economic and housing disparities, the writers add that two Southern California coastal cities, Santa Barbara and Newport Beach, had the highest median house values, at $1 million, in contrast to $60,800 in long depressed Youngstown, Ohio. -- New York Times 10/3/2006
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