Can’t Afford a Home? Welcome to the Middle Class.

Mauricio: Welcome back to another episode of the Doublewide Dudes. We’re gonna continue the conversation on the affordable housing crisis. AP, get that going. We’re still in the midst of the coronavirus

Alberto Pina: Yeah, a lot of moving parts. You know, full disclosure to our listeners, we’re sitting here on March 17th, and by the time this airs, what we know right now is schools, at least locally here in San Antonio, are closed till I think April sixth, as of the taping of this.

But a lot of moving parts and we really don’t know what the scene is going to look like when this, this airs in a few weeks.

Mauricio: Yeah. I mean, to me it was not a small issue, but just not in the light of how it is now. Right? I was just like, Oh, it’s going to pass. It’s the common flu, it was just my, my ignorance speaking.

But as days go by, it’s just like, all right, dang. Things are getting pretty serious, right? Yeah. It’s not necessarily just the health of people you’re looking out for, but it’s more the older generation of people that can actually be affected. Staying in for that exact cause, not being fearful of getting the illness but just spreading it to people that are vulnerable.

I mean, my gym is closing down, the Armadillo Boulders that are go climb at, that’s officially closed till the end of the month. Who knows what it’s gonna be three weeks from now, or just a month from now?

Alberto Pina: Yeah. You know, and we’ve moved our entire team remote, and, you know, like you said, we’re millennials.  It’s not a health risk necessarily for us, unless you, you do have a compromised immune system, then it doesn’t care how old you are. Right. I guess the silver lining is, for whatever reason, it doesn’t seem to be affecting children, which is phenomenal. But the real risk is, you and I may be getting it not knowing we’re sick, and then we’re giving it to our parents or grandparents that just can’t fight it off the way we want to.

So, you know, staying home isn’t a lot of fun. But they were talking on the news conference or the press conference yesterday that millennials will be the generation to lead us through this; one because, you know, it’s a lot of us going out and taking advantage of some time away from work, to go to the malls or the movies or what not, which is not why we’re shutting down business. Right. Um, that’s very painful, especially to the business owners and small businesses are going to be dramatically affected. It’s so that we can all do our part to, to keep this from spreading and hopefully put this behind us as a country sooner than later so we can get back to business and schools and just life as normal.

Mauricio: Yeah. Before this you just didn’t really see something like this happen, and you always saw the movies and possibilities, right? But when it’s actually playing out, it’s kinda just nerve wracking when you actually see it affecting small businesses or decisions to stop schools, public schools.

Michelle just, it was hard for her, but she made a decision to close down, at least for the next two weeks, just to see how things play out. A couple of small businesses that surround her are making the same decision. And it was hard on her. We’re just overall figuring out what these small-business people are gonna be able to do in a time like this.  It’s crazy.

Alberto Pina: Yeah. And there’s a number of ways I’ve seen it here in San Antonio, which is awesome. There’s a number of ways you can still support these small businesses, whether it’s restaurants or shops, like Michelle’s shop, where a lot of companies are doing almost the Amazon model, right?  Where you can still buy stuff from their shop online, and have it delivered to your home.

I think they were talking about in San Antonio doing a citywide, “eat at a local restaurant,” but have it delivered to your house or go pick it up, which I think is super cool. But we were talking about the number of things that the schools are doing to bring a continued education into the home for kids, whether it’s through YouTube videos or Facebook.

I’m always amazed by our ability as a society and in communities to come together, and just help each other out.

Mauricio: Yes. I am seeing that, and it does make me happy seeing that people are gonna do just the small things to help mitigate this.

Alberto Pina: Just think about their fellow human being next door. Right? You know, this is something that hopefully is on its way to being behind us by the time this episode airs. But today we wanted to talk about a national crisis that we’ve been facing as a country, as a community for a long time. And it looks like we’re going to continue to face this for a while, and it’s affordable housing.

There’s been more focus on the housing affordability crisis in the news. And I think at this point, the majority of us know someone personally, if not us on an individual level, that are struggling to find a home that we can make work within our budget.

Mauricio: You know, this (COVID-19) is going to be passed as soon, hopefully.

But then the affordable home crisis is still going to be at large. People are still going to be in the back of their head and still going to be rampant in our communities.

Alberto Pina: Well, and you know, Patrick Sisson, a journalist, was talking about this last year. This is coming towards the middle class, right?

He said, “Hey, middle-class, the housing crisis is coming for you next.” And I think right now, when folks think about affordable housing, they’re thinking about folks that are at or below the poverty line. And it’s super important that we keep those folks in mind because they, they need help just as much as the rest of us.

But there’s a much larger segment, the middle-class, that this is starting to affect as well. And if housing doesn’t get fixed and figured out for them, it’s only gonna make it worse for those already struggling at or below the poverty line. We were looking at Harvard’s Joint Center for Housing Studies, they published their annual housing report for 2020. And there were a number of just concerning trends (in) there regarding the affordable housing crisis, in the fact that it is hitting the middle class. What they’re saying is in 2010, two out of three people who rented apartments or single-family homes made less than $30,000 a year.

As of 2018, those same two out of three people renting are making about the same in income. [Editor’s note, the report actually said two out of three renters are now in the $30-75K per year income bracket showing higher income folks are having a harder time finding affordable housing.]

The problem is household income’s only going up 14%, whereas the price of housing is going through the roof. And affordable housing… It’s not just affordable home ownership, right?

It’s also folks that are renting and this is affecting people across the board. We’re seeing it here in San Antonio. We’ve got tons of folks moving from the West coast and they’re moving here because the cost of living is just so sky high out there. But there’s only so much supply here in San Antonio as far as housing.

So that’s driving the cost up of, of everything.

Mauricio: Yeah, it’s not just the home ownership, it’s the renting and just housing all across the board where the firefighters, school teachers, all the same paying jobs that have just been consistent for the past decade or two, housing’s just going up and the demand is going up and the prices are going up and it’s going to drive a lot of people to be in a place where they can’t afford it anymore.

And just reading that report, in that same section of the Harvard report, they focused on the high hurdles of home ownership. One of the quotes from there was the primary explanation for the strong rental market may be relative to affordability.

“According to the Freddie Mac survey, 82% of renters thought that the renting is more affordable than owning.” Think about that, they’re just like, “eh, I’m not going to take the time to divulge in that or dig into that one. I can just rent,” even though the rents are going high, and that’s just completely kicking homeownership out of the window in their eyes.

In February, 2010, the median home sold price was $181,000. In just nine years later it jumped to $261,000.

That’s a 44% increase in the housing cost. Comparing that to the household income. It just rose 14% from 2010 to 2019 so that difference there, right. What is that 30%?

Where income’s going up marginally. Just as expected, but then almost a 50% increase in the cost of living.

Alberto Pina: Yeah, 44% increase in the cost of a house, but wages only went up almost 15%, that’s huge.

Mauricio: Even scarier than that, in 2010 to 2018 when I was reading it, the middle class is getting priced out of the American dream, it sounds like.

Alberto Pina: I do recall reading that homeownership for millennials was at all-time lows, historically looking across generations. And this is a problem, not just because people need a place to live, but historically, especially for the families that we serve. These aren’t families that have massive investments in the stock market, giant 401ks. Their piggy bank, their retirement, their savings is going to be tied up in that home, right? And if we’ve got a whole generation of folks that can’t afford to take that step, then when it comes time for retirement, they’re not going to have the security that previous generations have had because of those investments.

Mauricio: Yeah. The previous generation… Was it just easier to get into a home, cost-wise or…?

Alberto Pina: You know, times were just, they were different. I think a lot of the problems that are facing millennials particularly is student debt. Right? It certainly cost much less to get a degree 20, 30 years ago than it does today.

So, they’re already starting off in the hole when they enter the workforce. I think historically folks entering the workforce nowadays are making less than what their counterparts made in previous generations. And so, you add on that, the fact that prices are going sky high, and it’s just a problem.

I know a lot of people ask, is it really that big of a deal if the middle-class just rents instead of owns? And the simple answer is absolutely. That is 100% a problem. Home ownership provides stability, not just for the individual that is buying that home, but also for their family.

Kids are healthier. They stay in school longer, are more likely to graduate if they have that stability of having a home. Which may sound a little nuts, that a home can contribute to all that, but it’s not the house itself necessarily. It’s the stability and the confidence that comes from growing up with the same group of friends, in the same support system, and knowing that there’s a lot of value knowing that you always have a safe place to go back home to.

Mauricio: Yeah, I agree. There’s a lot of value in that, and having that stability for long-term is going to have a great outcome on the kids’ lifestyle and what they’re used to, right?

Alberto Pina: Yeah. And then the support system that comes from knowing your neighbors in that community and knowing that you’re going to have that support system around you.

You know life is full of problems.  That’s no different from someone in the middle-class as someone at or below poverty or making $1 million a year. There (are) just problems in life. It’s the support systems that people have that in many cases help them get through it. And I think that’s why some of these studies, particularly looking at the effects of homeownership on lower income families, why they’re seeing more children go to college, start off in their career making more money, and less of a need for outside financial assistance later on, in large part (is) because of that stability in the support system that they grew up with.

Mauricio: Yeah. Homeowners are more likely to be active in the children’s lives, the children’s schools. Be more part of the community, to the point where there’s an effect.

Alberto Pina: Yeah. And if it’s your community and you know, you’re staying there, you’re going to be more invested. It’s almost like you have skin in the game because this is my community, this is my neighborhood. This is my block. And I’ve got to make sure that it’s taken care of and the people around here are taken care of because we’re all kinda in this together, right? I think it’s super critical that we point out that by no means are we saying or are these studies saying that if you don’t become a homeowner that you’re a bad parent.

It’s we as a society and a community need to figure out ways to help folks become homeowners because there is a clear numerical difference in the lives of the individuals, in the lives of their children, and this is a problem that will affect generations to come in our societies if we don’t get this figured out.

Mauricio: Just the previous generation on having those lessons taught to their kids, about having a home, going to college. It was just more affordable and easier for them to get into it and created that stability for their kids at home. Now, kids nowadays, millennials graduating with prices skyrocketing and college and all that being more expensive.

They want to follow those same values, but it’s making it hard to, right? That’s why this crisis is really important to stay aware that it’s not just the poverty line. It’s creeping into the middle class and just a big population.

Alberto Pina: Yeah. And in that, this is an affordable housing issue that affects everybody.

If middle-class America is having a hard time finding home ownership, then that’s going to drive more of them into the rental market, which is going to drive rental rates up for everybody, and further the problem we’re having with folks at or below poverty line affording a place to rent for themselves.

Same thing we’re seeing in West Texas to a degree, right? Oil and gas moved in, homes that were $1200 a month to rent are now $3000 plus a month. And there’s not a ton of extra supply. So that’s why you’re seeing things like teachers having to live in hotels, so they can continue to be there for their community and for the students that rely on them.

Again, we can’t stress this enough. This is a problem that will affect everybody. Even if you’re a multimillionaire, you need somebody to teach your kids, right? And if your house catches on fire, you need somebody there to come fight that fire. This is a problem that will affect all of us, regardless of where you find yourself on the economic ladder.

Mauricio: Yeah. The heartbeat of the city and communities. The wages are what they are, and cities rely on their everyday participation in their jobs to have everything going smoothly. So, it doesn’t matter what part of the income section you’re at. Having people with affordable housing is just gonna create more stability for them to be able to transfer that into their daily jobs.

Alberto Pina: Yeah. And again, it affects everybody. If we have a system of housing that allows families to stand on their own, and afford to pay their own mortgage and their own rents, whatever it is, then that frees up tax dollars that may have been used to help disadvantaged people find a place to call home, to do things like fix roads and improve our schools, and do other things to better our community.

So again, even if you, yourself as an individual, are perfectly comfortable with what it costs to live or rent in your home, you’ve got to think about this on an on a broader level. If our economy and if our governments are focused on helping people that, had we put solutions in place, could stand on their own, instead of things like fighting crime or improving the infrastructure and roads and whatnot in our community, then that’s going to affect all of us, right?

And the other thing with affordable housing, we talked about the stability that brings, and with stability means a decrease in crime. It also creates the ability for folks to contribute more to the taxes of the municipality than drawing from it. It allows people to contribute their tax dollars to improving the community instead of pulling from that, and I think people want to contribute to their communities, to their society.

It’s not that folks want to have to rely on people to help them with their house. In a lot of cases, they just, they don’t have a choice. And that’s why affordable housing is so critical. If we have more people contributing in taxes, then that’s going to help us bring our national debt down; provide stability and growth in our community.

Whereas right now we’re, we’re kind of throwing money to solve the problem without thinking it through long term. And how do we allow home builders, whether it’s factory-built homes or site-built, allow the private market to help find solutions here and free up government dollars to help with other problems that maybe we can’t help with.

Mauricio: More homeowners is going to create more tax dollars, which is going to be a plus for everybody. And I hear it in customers’ voices where there’s a big sense of pride in going into home ownership. I constantly hear that they want to stop renting and stop paying someone else’s mortgage and stop throwing money away.

That’s probably 98% of people’s underlying issue with renting, right? They want to have a place to live. They want to be able to take care of the family. But when it comes to throwing money away, it’s not creating a long-term stability for them or their family. And being able to provide that for them is going to create a big sense of pride.

Alberto Pina: Yeah, 100%. It’s quality of life. There are so many different things all wrapped up into one, way too much for one podcast. But I really think this is going to be the theme of the Doublewide Dudes, at least for the next few episodes.

We’re looking to interview folks that are experts in certain parts of this issue. This is such a complex problem that there aren’t easy, simple solutions. The more people we get talking about this, when you get people talking about problems, you inevitably get people talking about solutions and that’s really what we need at this point.

We all know we’ve got a problem, right? No matter what city you go to in the United States and even really beyond the United States, there’s just a problem. What we need now is solutions without the government stepping in to pay for it because that’s not what families want, nor is that sustainable long-term.

If this is a growing problem, we need a solution that’s going to grow with the problem and help everybody live a more productive and enjoyable life.

Mauricio: And factory-built housing, I think, offers a great solution for them. Which is why we’re here talking about it and bringing it to light. But yeah, I agree. The affordable housing topic, Alberto, is super important for us to talk about and keep in the light, so we’ll keep chatting about that. Well, that does it for this episode, guys. As always, thanks for tuning in and we’ll catch you guys in the next one!