Sunday, December 04, 2011

How unemployment is tearing America apart

Having such a large army of semi-permanent unemployed workers will leave Americans poorer for years to come. “It not only affects your social fabric and creates social tensions, but it also has a fundamental impact on the long-term potential economic growth of the country,” he says. “What that means over time is a lower standard of living for everybody.” The downgrade in living standards is already underway in some unlikely places: America’s decaying suburbs. For decades the ’burbs represented the American dream for the middle class—white picket fences, two cars in the garage and a quiet cul-de-sac for the kids to play in. Yet today poverty in the suburbs is growing twice as fast as in cities, according to a recent analysis by the Brookings Institution.
As go the burbs, so goes Privatopia. Having only been around in significant numbers since the 1970s, HOAs have never had to weather a long economic storm. As the good perfessor recently noted, consequently they aren't prepared to cope with such adversity. Foreclosure and job loss strangle the lifeblood of assessment revenue. Adding to the pain is HOAs have far fewer households to pick up the slack like larger municipalities and counties.

This article points out the speculation and leverage led downturn that began in 2008 that shaved eight percent off the U.S. economy cannot be directly compared to the Great Depression of the 1930s, in which the economy contracted by nearly one third and far in excess of the 10 percent drop in GDP that defines a depression. But anemic recovery since 2009 has been so weak for so long that it is transfiguring the economy because so many have been out of work for six months or longer.


Anonymous said...

"HOAs have never had to weather a long economic storm. As the good perfessor recently noted, consequently they aren't prepared to cope with such adversity."

Even the proponents of HOAs claim that HOAs need extreme powers over the homeowners -- including the ability foreclose for trivial amounts and reasons -- in order to survive.

Which leads to the question, should HOAs survive? Should legislatures and courts continue to give community association corporations preferential treatment based on the assumption that HOAs are Too Important To Fail(tm)?

Anonymous said...

from the article:

"home ownership rates are in free fall, suggesting that one of the key pillars of American society—owning a place of your own—has lost its lustre"

A 2007 survey, not commissioned for the CAI, of homeowners in HOAs shows that

* 08% think they're great
* 16% think they're OK (24% positive)
* 21% think they're a minor annoyance
* 48% think they're a major headache (69% negative)
* 07% gave no opinion
* 19% said they had been in what they call a "war" with their HOA
* 54% said they "would rather live with a 'sloppy neighbor' than deal with an HOA."
* 78% said they might consider NOT buying a home under the jurisdiction of an HOA

Kathy Price-Robinson. "Two Thirds 'Annoyed' With HOA Survey Says" Los Angeles Times. September 05, 2007. (link broken sometime in the past month; numbers from a comment at Mike Reardon's blog)

That's 4 out of 5 HOA members -- that's nearly 50 million Americans -- saying that the presence of an HOA would have a negative influence on their decision to buy their next house. Hmmm....

How much of that "lost luster" has to do with the experiences of being a glorified renter in a community association?

Anonymous said...

Of course, another reason that home ownership is losing it's luster is that owning a home makes harder, if not impossible, to relocate if employment requires it -- especially if you can't sell that home.

Republicans hold two conflicting beliefs:

(1) American home ownership, the "ownership society," produces stable families and communities

(2) Americans must be willing to migrate to wherever the jobs are, as required of them by capitalism.

Anonymous said...

Socialism needs more taxpayers.

Capitalism needs more consumers but fewer workers.