Homelessness increases as globalization raises housing costs
With a master’s degree from Northwestern’s prestigious Medill School of Journalism, Nolu Crockett-Ntonga – a former National Public Radio correspondent in the White House – does not fit the typical profile of what one would expect from the homeless population. And yet, this is precisely what happened to him shortly after returning to the United States to care for his ailing mother.
“Initially, I had wonderful jobs with good pay and good benefits,” said Crockett-Ntonga, who lived in South Africa for nearly a decade before settling in the Washington area, DC.
“But from 2005 to 2011, I continued to be fired from the nonprofits where I worked. I always believed that I would have a job as long as I wanted to work. Alas, I was wrong. I applied for over 300 jobs!
“I attended every workshop on how to find a job. I did everything the pros told me to do, but couldn’t find a job and only had a handful of interviews. I fell into depression. Without a job, without a cushion, I dipped into my still thin pension fund, believing deep down that I was surely going to find a job! But no.
“The rent for my two-bedroom apartment,” Crockett-Ntonga continued, “was $ 1,500 plus utilities at the time of my eviction. I had paid rent and utilities on time for over three years when I lived there with rent ranging from three to five percent each year.
“My savings were running out. I spoke to the property manager about the possibility of me paying half the rent. My proposal fell on deaf ears. They probably laughed at the idea.
“Unfortunately, I was kicked out on October 18, 2011,” Crockett-Ntonga said. “My property was literally tossed curb across the street. The walkers started rummaging through my things. If this could happen to me, then obviously something is wrong with our housing system. “
Indeed. The United States owes its growing problem of homelessness almost entirely to a global economy that increasingly treats virtually everything – food, water, shelter, medical care – as an investment rather than the material basis of a standard of living. decent. After shipping the value-added sectors of the US manufacturing economy overseas, Wall Street financiers a generation ago began scouring the world in search of new business opportunities, hoping to earn money. money.
It did two things: First, it reduced the wages of workers around the world, with employers looking for workers who would do the cheapest work. And second, it raised the price of virtually everything from a kilowatt of electricity to a bushel of corn to the rent of a one-bedroom condo.
The median selling price of homes in cities from Minneapolis to Miami to Manhattan has increased by more than 50% since the onset of the Great Recession in 2008, and rents have increased 150% since 2010. Similar to Africans who have been excluded from their country’s food markets, Bolivians who can no longer afford water or Colombians who protest against proposals to increase the price of everything from coffee to sugar to gas, a growing number of working-class Americans have found themselves unable to pay rent.
One in four U.S. households today spends more than half of their monthly income on rent, and another six million are considered to have a cost burden, meaning they pay more than one-third of their income in rent. .
Unsurprisingly, just as the rising cost of food has triggered hunger in Africa, soaring housing costs have led to an increase in homelessness in the United States. Government statistics estimate that there are more than 550,000 homeless across the country, although many activists believe the numbers are much higher. Even less surprisingly, the ax has fallen heavily on African Americans, historically the last to be hired and the first to be fired.
An aggravating factor was the subprime mortgage market, which targeted African Americans, especially those with higher incomes. Blacks were more than twice as likely as whites to be struggling with a predatory subprime mortgage during the housing boom that collapsed in 2008, and nearly four times more likely in New York.
The results are record homeownership rates for blacks. Before the start of the pandemic, 44% of black families owned their homes, compared to 73.7% of white families, according to the Census Bureau. According to a study by real estate brokerage firm Redfin of metropolitan areas over one million people, this gap is greatest in Minneapolis where 25% of black families own their homes compared to 76% of whites.
When the housing bubble burst in 2008, the Obama administration staged an inflammatory sale of foreclosed homes owned by government-backed lender Fannie Mae, effectively offering relief to banks rather than homeowners. Wrote The Atlantic magazine:
“Between 2011 and 2017, some of the world’s largest private equity and hedge fund groups, along with other large investors, spent a total of $ 36 billion on more than 200,000 homes in struggling markets across the country. In an Atlanta zip code, they bought nearly 90% of the 7,500 homes sold between January 2011 and June 2012; Today, institutional investors own at least one in five single-family rentals in parts of the metro area, according to Dan Immergluck, a professor at the Urban Studies Institute at Georgia State University.
As a result, the number of empty properties nationwide has increased by nearly 1.1 million since 2010, leaving 17 million homes – or 12% of the nation’s housing stock – vacant. This means that there are 59 vacant homes for every homeless person in the country.