Stooping to sob sister journalism a television newscaster
among other things said, “Landlords who raise rents are colder than a witch’s
heart.” Pow! Bam! Slam! Take that landlords! Powerful language even when
sanitizing a cliché. Another newscaster reported that the average rent in San
Diego is now $1,100 per month and additionally, only 20% of the people in the
region can afford a median priced home costing $339,000. Egads!
While conflating “average rents” with “median income” and “median home prices”
is grossly misleading, it seems like nearly all reporters do this every month
when the home sales stats are made public. A fair reporting of the news, you'd
think, would acknowledge that half the renters in San Diego pay $753 or
less per month if one looks at median rents rather than average rents. Rents of
$300 to $753, of course, don’t give rise to the same sensationalism nor excite
the same emotional juices as $1,100 per month. Why? Well, the County of San
Diego reports that a family of four defined as Very Low Income can afford
$710 per month (including utilities). In this context, rising rents are not much
of a sob story and landlords hardly seem colder'n a witch's tit.
It’s appalling that newscasters don’t know the difference between average rents
and median rents, and report the news predicated on an ignorance of the
difference. By using “median” family income affordability as the basis of a
story, then smuggling in “average” rents, rather than using “median” rents
creates the false impression that renters are being gouged. In stating this, I’m
not implying however, that there are no renters struggling to make ends meet.
When reporters misrepresent the news they may inadvertently be creating the
justification for some rental owners to raise their rents in trying to achieve
what they are being told is the average (fair) rent. This disinformation by the
media could result in some renters paying 46% more rent than might otherwise be
the case, 46% being the increase between median and average rents.
Due to a construction boom in luxury apartments with premium rents of $1500 to
$2500 a month, the “average rent” in San Diego is skewed upwards. By using the
median rent, however, you get a better indicator of the real rental market. A
median rent is the amount, which divides the rent distribution into two equal
groups, half paying rents above the median, and more importantly, half paying
rents below the median. The median rent from January 1st through September 30th
of this year using information from the actual sales of over 12,000 apartments
is $753. (This is information the county assessor requires when a sale is
recorded).
Where are these rentals, half of which charge less than $753 per month? Well,
they tend to be in smaller complexes, typically fewer than 25 units per project
and therefore unlikely to have microwave ovens, pools, saunas, Jacuzzis,
recreation rooms, gyms, pool tables, lush landscaping, waterfalls, security
gates, garages and other amenities found in larger complexes. Affordable
apartments typically are older, more modest units, and have less soundproofing
while still meeting all health and safety standards.
Regardless of whether you use average rents or median rents many housing
activists want the government to institute price controls, claiming that due to
a shortage of apartments, rents are out of control. The facts prove otherwise.
For the eleven years from 1990 until the beginning of 2002 (data provided by
CoStar COMPS) rents did not keep up with inflation as measured by the U.S.
Bureau of Labor Statistics Consumer Price Index (CPI). Only this year (2002)
have they risen above the CPI. In 1990 the median rent was $522 per month. In
the first three quarters of this year, the median has increased to $753 per
month. (See Graph).
A family with a median income of $45,733 using the
criteria that no more than 30% of income should be spent on rent can afford
$1,143 per month rent. (45,733 divided by 12 = 3,811 x 30% = $1,143). According
to the census, there are over 159,000 households (65% of all renters in the City
of San Diego) paying less than $1,143 per month.
The San Diego Housing Commission reports it is assisting
about 13,400 of those families paying less than $1,143 per month. Contrary to
what our elected officials may believe and keep telling us, census data
indicates that the private sector, does in fact, provides over 7 times more
affordable housing than government in the $300 to $499 rent category and 55
times as much in the $500 to $749 category. Free the Free Market and you’ll
get even more affordable units in these categories.
Politicians throughout San Diego County have decided that protecting various
species of flora and fauna that very few people have ever seen or heard of,
protecting uneconomical farmland and "saving" the back country from development,
are a thousand times more important than affordable housing. Unfortunately, good
intentions have a price and that price is capitalized into the cost of all homes
and apartments (new and used) in San Diego County making it one of the least
affordable places to live in the U.S.
Politicians need to recognize that rents and profits from rental ownership
determine how many new apartments will be built each year and that
rents will have to virtually skyrocket in order to
pay for the never-ending stream of
requirements mandated by
government. Unlike Peter Pan, politicians cannot
remain children forever believing everything they desire can be provided free.
Fred Schnaubelt fredschnaubelt@mindspring.com
*
Oh Brr! Too cold for
any saner soul
than mine to venture out while winter's bone-
less grip takes hold of breath and leaves no hole
whereby the vapor warm with which we moan
in pain or joy may pass. "Oh Hell." we groan,
"It's colder than a witch's tit out there!"
Indoors no damp and clinging snow is blown
on frostbit cheeks; no slipp'ry way to fare
while darker grows the night, and deeper. care.
If we should never venture out our door,
perhaps our courage might not ever dare
to tramp the wild, cold night; then we'd be poor
indeed, and might not ever find the heart
to carry on when we must do our part.
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