I think you are looking at this from only one perspective, that of a person or a couple starting from scratch.
The more realistic situation is that of a married couple with a dependent or two (kid, elderly parent, whatever) who have an existing lease or mortgage, an existing car loan or two, and some small amount of savings. This couple USED to make far in excess of $1600 per month each, but they’ve both lost their positions due to COVID. Their monthly bills were fine when they both held jobs, but with only $3200 per month there is a large shortfall.
They had been claiming unemployment through the state (which probably ran out months ago), and very likely they have gotten lower-paying jobs or joined the “gig economy” to help them get by.
They have thus far avoided defaulting on their mortgage or lease because of the moratorium on evictions, but those bills are all going to come due soon. They’ve make their payments on their car loan, but certainly haven’t bought a new one. As the year has slogged by, they have raided their savings, but after a year it is pretty much zeroed-out. They’ve used their credit cards when they’ve had to, and now those are pretty maxed-out too. They are not in danger of starving, but they are very much in danger of losing everything else.
Well, no. We’re talking about survival here in this thread, but that’s not what the stimulus payments are about. The money is only secondarily to help people survive, it’s primarily about injecting cash into the economy and preventing a greater collapse.
Feeding hungry people is relatively easy. Rebuilding an economy where the capital from tens of thousands of businesses has effectively evaporated and the real estate market has collapsed… that’s really hard.
Menzo
1628
This is working in practice right now in the Bay Area. Rents in San Francisco are down 25-30% vs. last year. Tons of people are leaving and Austin, TX is the primary destination, but places like Sacramento and Denver are also major landing spots.
I don’t get the sense that the people in charge feel like this is something to be concerned about. I think they think this is temporary and all these people are going to flood back in later this year, but my gut tells me this is just the start.
If you work at Twitter or Facebook or Google (or HP or Oracle) and they say that you don’t have to come into the office anymore, and in fact in some cases there isn’t even an office at all to go to, why would you continue to live in San Francisco and pay $4000/month for your 1000 sq. ft. one-bedroom apartment? Move to Austin and buy a 3000 sq. ft. house and pay $2500/month on a mortgage and 30% less on literally everything else you pay for.
I mean, I work for a company that, among other things, is a landlord for several properties. We need that rent in order to pay the bank’s monthly payments. The banks have worked with us and delayed the need for those payments by us doing interest only payments for 3 months this summer, but they are still due, we still need to pay off the loans we took. So we’ve been understanding with tenants who are restaurants that had to close during last March, but those rents are still due because we need to still pay off the loans. The PPP has helped in this regard so that when restaurants re-opened they were able to pay their employees using that, and still pay their rent. It will be the same for apartments, I’m sure. When people get their checks from the government, understanding landlords can have their rent payments come in late, but forgiving them is not really practical unless banks are more understanding with their loans.
The idea that labor must move to follow jobs and affordable housing is what is destroying rooted communities, obliterating people’s social capital and support networks, and making us all feel more anxious and less stable. It’s one of the great scourges of modern life. Not that it’s easy to solve, but we should care about solving it much more than we do.
Please, please stop doing this to us. I know that we have sinned and been prideful, but we do not deserve any more punishment.
Umm, what? Maybe no payroll taxes, but unemployment benefits have been subject to income taxes (federal, and eventually state where applicable) since the Reagan years. One of those “push the income tax burden down the income scale” things they did to pass tax cuts back then whose benefits mostly went to the well-off.
Now it’s possible that 20k/year wouldn’t be subject to much income tax due to dependent children but then you’ve got kids to feed/clothe as well as yourself, so it’s hardly a king’s ransom.
Alstein
1633
This will be self-limiting if this becomes the new normal, folks will move other places.
Honestly, I wish we had UBI that was set so folks could survive in the deep rural areas, I feel like if you semi-forced folks into lower-cost areas ,it would balance out politics in America.
For the official answer in case someone needs it:
Menzo
1635
LOL and here I was considering a move to Austin! But those anecdotes don’t surprise me - it’s the the same thing in the Bay Area (houses that get all-cash, way over market bids) for years.
I guess I need to find the next Austin.
Facts don’t care what you think. $400 per week is absolutely below the federal poverty threshold for a family of 3, and barely above it for a family of 2. Never mind that you just acknowledged that the average monthly rent would consume almost all of that amount. Of course, these lucky people getting all the free moneys should just live in their cars.
LockerK
1637
I assume this is specifically meant as commercial real estate because hahahaha oh god no residential real estate is more crazypants than the crazypantsness it had before the pandemic thanks to historically low interest rates and everyone realizing their house isn’t actually that big when you have one or both parents WFH along with a gaggle of kids who are “learning” remotely.
Feels like there will be a good opportunity for cities to rezone some of these commercial buildings to multi-family residential and offer up housing in more desirable areas but I suspect that 1) it will end up being luxury apartments as was mentioned above and 2) with businesses moving out of city center the location loses a bit of its attractiveness, though I suspect the remaining entertainment, food, and culture options will more than outweigh it.
Columbus, maybe? Sure the state’s trending the wrong way politically but we probably won’t be on fire half the year as climate change continues to worsen!
Columbus is a good spot, I’d agree (lived there once upon a time). Still very affordable, lots of company headquarters in and around it. Some people get unnerved by the Ohio State-ness of the place, but they’re a huge employer as well.
Yeah, home sales are hot. We had four offers on our house the first day on the market, three of them overbids. We took the one that was also a cash deal.
Thrag
1640
Plus if you are looking for a relief from traffic Austin isn’t it.
I moved from Georgetown, TX just north of Austin to San Marcos, TX, about 45 minutes south. San Marcos is an economically depressed area with Texas State University in the middle of it. Very affordable housing compared to closer Austin suburbs. It’s too far from north Austin for a comfortable daily commute, but I work from home anyway. San Antonio is about 1 hour away.
With the college influence, San Marcos itself has two nice Target stores for in-person purchases, several good restaurants and bars, and the option to go to the bigger cities nearby. And I have Gigabit cable Internet.
Canuck
1642
My rent is probably more than $1600 month USD. I hope the linoleum tastes good!
ShivaX
1643
The beginning of the video is them coming out more or less (at least on YouTube and thus most of their public), but I put the timestamp at the end where they explain the details.
Alstein
1644
COVID has caused a lot of folks to make the leap when it comes to transitioning.
Hopefully folks here are understanding.
One reason for zoning laws and onerous permits is that developers typically don’t pick up the cost of wider roads, new schools, new fire stations and other infrastructure when they build. The city’s taxpayers do and they, understandably, want to control or at least plan for those costs.
Menzo
1646
This is the root cause of the problem in the Bay Area, San Francisco specifically. It’s nearly impossible to build a new property or to replace low rises with high rises. For all the progressivism in SF there’s a corresponding amount of NIMBYism.
Note: I don’t agree with an unfettered, no-limits approach, but there are ways to build a metropolis that don’t involve shoving everyone who makes below $1 million/year into the far suburbs.
