Thursday, May 11, 2006
Quick: Which states have the highest rates of poverty? For decades (centuries?), almost all indicators of wealth and achievement, such as poverty, education, income, etc., have mostly southern states at the bottom. Sadly, the low ends of the lists have tended to be filled with states with the highest percentages of African Americans. But the federal government’s assessment of what constitutes a family in “poverty” was not designed for an era of extraordinarily high housing costs. The price of food, not housing, has been the chief cost factor in determining poverty. Uncle Sam’s measurements have not taken into account the varying costs of living –- a flaw that grows as housing costs take up a larger and larger percentage of everyone’s income. (Why? Unlike almost anything else, no one -- not even the Dutch these days -- is making land, while our nation’s population is now almost double what it was in 1950).
A hot-off-the-presses report of the Pubic Policy Institute of California has revised the poverty figures to take into account housing costs. As a result, the report concludes that D.C. (21.0%), New York (16.3%), and California (15.7%) -- all highly urbanized, high-housing-costs jurisdictions -- have the highest poverty rates. This assessment contrasts sharply with the Census Bureau’s poverty list, which places Mississippi, Arkansas, New Mexico, and Louisiana at the top.
The report uses HUD’s “fair market rents,” which are calculated largely on the basis of the 40th percentile of rents in a given market. The explosion in housing costs on the east and west coasts since the late ‘90s has generated a rise in the number of metropolitan families who live in money-stressed poverty, according to the new assessment.
(The angels are in the details, of course. Even in California the national economy has appeared to play a larger role than housing costs in poverty totals; the poverty rate for the Golden State in 1995 was nearly 20%, in conjunction with a national early-‘90s rise in poverty. And the online report stated that the fair market rent for a two-bedroom unit in San Francisco was $1775 – a number that I discovered did not take into account the 13% decline from 2004 to a still daunting $1539 in 2005.)
A policy lesson is that, unlike the 1960s’ traditional thinking, it is housing, not food, that is the money matter of the greatest concern to poor persons. The dilemma of the rising cost of housing should be a domestic policy issue of the highest priority.