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Originally published in the December 5, 2004 issue of the Alamance Independent
"CHEAP" HOUSING FOR "CHEAP" LABOR
By Mark Andrew Dwyer - 12/9/04
Have you ever wondered how millions of poor and uneducated Mexican settlers (a.k.a. "migrants") can afford living in such prime areas in the U.S. as California? Well, if you pay taxes or bought a new home in the Golden State then you are the one who is footing the bill for their housing. As an example below shows, a family of "migrants" can easily make well over $100,000 a year in equity on their "affordable" house that was provided to them for a small fraction of its cost due to forced generosity mandated by the state and local governments.
According to a NewsMax.com article (see [1]), "Sacramento County has adopted one of the most aggressive affordable-housing policies in the nation, requiring developers to set aside 15 percent of all construction in unincorporated areas for low-income residents. [...] Three percent of housing must be reserved for families with ``extremely low-income,'' under $17,300 a year. The remaining 12 percent will be split between ``very low-income'' families earning less than $28,850 and ``low-income'' families earning less than $46,150. The county and other sources will provide about $10 million in annual subsidies to cover the difference between the market price of the housing and what the families can afford to pay."
Giving away golden balls or Mercedes-Benzes would not be nearly as generous (nor would it have such grave consequences). According to California Association of Realtors (see [2]), October's median home price in Sacramento County was $339,720, presently growing 32% a year. If this price growth rate continues, and the population explosion combined with shortages of new home sites makes such a scenario very likely, that price will grow to $781,345 in just 3 years, yielding a lucky buyer a $441,625 profit, that is, a $144,208 a year return on a small investment of symbolic down payment that a qualifying family can afford to pay. (This profit does not include the affordable housing subsidy that reduces substantially the amount owed on a house worth $339,720 at the time of purchase.)
It doesn't take a rocket scientist to figure out who will cash on this program that transfers wealth from the taxpayers and home buyers to qualifying low-income families. According to a Newsweek article (see [3]), the population of blacks and non-Hispanic whites living below the poverty level dropped by 1.4 or 1.7 million nationally since 1990, while the population of Hispanic poor grew by 3 millions during the same period. This trend indicates clearly that Hispanic poor are poised to become a future underclass in the U.S. In State of California, there are about 5 million people living below poverty level, a vast majority of whom is Hispanics. This number includes est. 2 to 3 millions of poor Mexican "migrants" and is growing with astonishingly high (although impossible to accurately predict) rate. I estimate that in a few years, 2 out of 3 California residents eligible for housing subsidies will be Mexican "migrants" and their families. And if you think that affordable housing agencies will require a proof of citizenship or legal residency from those seeking new home purchase subsidy, I have a disappointment for you: most of these agencies are not even allowed to question the immigration status of the prospective recipients, never mind requiring any proof of legal residency.
The fact that a family of "migrants" is generously given a chance of making well over $100,000 a year, and for no reason other than them being poor, out of the pockets of taxpayers and home buyers is just one absurd consequence of the deceitful idea of managing home prices by means of affordable housing programs. In American market economy that functions better than any other economy I know of, the prices obey the law of demand and supply. In particular, attractive but overpopulated areas are characterized by high home prices, and this fact has several economic and social advantages. First, it discourages out of control population growth as less and less people are willing (or able) to pay the hefty price for their residences. Second, it favors affluent residents, more productive workers, and highly qualified professionals, who tend to have higher income potential than the poor, the less productive, and the lowly qualified, and, therefore, are more likely to afford a more expensive home. Third, it boosts property tax revenues that are needed to offset detrimental effects of overpopulation so that local governments and municipalities can improve the infrastructure necessary for their growing communities to function effectively. (It's worth to remember that cost of the infrastructure grows faster than the population it serves.)
California-style affordable housing initiatives thwart all the above. Highly fertile but lowly productive "migrant" families will keep moving into this state as long as they can afford living here (while paying less in property and income taxes), thus further contributing to overpopulation with its all negative consequences (see [4]). This will drive home prices (for all others) further up, discouraging new arrivals of highly productive professionals. Productive middle-class residents, not being able to afford a house in proximity of their jobs or to qualify for an affordable housing subsidy will either move out of state or live in relatively cheaper remote locations (that are already hard to find) wasting big part of their productivity time in gridlock while commuting to and from work. (This fact alone will considerably decrease per capita productivity in the region.) They will keep struggling on their $60,000 a year incomes, more likely renting rather than buying, just to see the less productive (and often illegal) residents living in better homes, driving better cars, and having more well-fed and dressed kids once these less productive residents learn how to cash their $100,000+ a year home equity profit. All these things are already happening in California that slowly but steadily becomes a nightmare for its main workhorse: the middle class. It must surprise no one that while "100 percent of California's population growth over the last 10 years was the result of immigration and births to immigrants", "native-born residents are actually leaving the state" (quotations from [5]).
Here are some more options to consider for California authorities. Why not to give each Mexican "migrant" a portfolio of municipal bonds and stock options so that he can better improve his life and the lives of his family? How about just giving each and every one of them a 1/35,000,000-th share of California's land and economy right upon arrival? That would be very Liberal and Democratic. After all, as they claim, Hispanic takeover of American Southwest is just a matter of time, so what's the point in resisting it? We may as well begin transferring to them our wealth right now.
[2] California median home price up 21.4% in October
http://orangecoastrealestate.com/news_car.htm[3] The Changing Face of Poverty
http://www.msnbc.msn.com/id/6214022/site/newsweek[4] California Population Report
http://www.npg.org/states/ca.htm[5] CAPS TV Campaign Cites Billions Immigration Is Costing California
CAPS News, Fall 2004, Vol. 45, No. 3, p. 1
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