When Your City Became Unaffordable
July 22, 2015 12:30pm by Barry Ritholtz
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You can’t go home again.
Worth noting that some cities (NY, Boston & Chicago) are walkable with comprehensive mass-transit…there’s no need to own a car. Others, LA, Dallas, Houston etc, you need a car and have all the other expenses related to that ownership.
Question: Is 30 percent of one’s salary devoted to housing still a “common sense” approach to living within your means? Or simply an ages-old benchmark for keeping up with the Joneses?
When I meet people in the Millennial age bracket, I hear first-hand how low their wages are (and we’re talking quality-university educated minds) and how their other costs, such as servicing student debt, affording a car (those that want to drive), and the chunk typically deducted for their medical insurance premiums.
Hell, the warehouse job I had when I graduated from high school would now pay $29.68/hour (in inflation-adjusted dollars, per BLS). That’s almost $62K annually. Someone with a BA/BS degree today, much less HS diploma, would be lucky to get 1/2 to 2/3rds of that income today starting off in their careers. But I digress…
Back to my premise: Why the 30% benchmark? Why not 28%? 25%? 23%?!
Tell me, how else is someone going to SAVE enough money for retirement? Didn’t we Americans learn the lesson that single-family houses are NOT oversized ATM machines? And with the evaporation of pensions, plus looming political/fiscal pressures on SSA, means more and more folks better plan to swim on their own.