This summer I am in Alaska once more, working for my father’s landscaping business (it pays rather well, even taking into account the high airfare from Texas to here). Of course, this means I work long hours six days a week and am rather tired (hence my lack of bloggernacle participation over the last month).
I would love nothing more than to move back to Alaska after I graduate. I likely wouldn’t be able to get a prestigious academic job, but I don’t really care for prestige all that much.
However, this is likely impossible for me. Why? Rich people have driven the land values up so high that at the median income for the area, I couldn’t afford to live here. Here’s the relevant article. Here are a few quotes from it:
The tide began to shift in the late ’90s, according to real estate sales statistics of Homer and the surrounding area, including Anchor Point. The average sales price of a Homer-area home crept upward from $119,000 in 1999 to $132,000 in 2002. In 2003, that number jumped nearly 8.5 percent, and by last year, it had soared to $190,000.
In some areas of Homer, the leap was even more dramatic. What cost $136,000 in 2002 was suddenly worth $215,500 in 2005.
and here:
While home prices have risen dramatically, wages have not. The average household income in the Kenai Peninsula Borough in 1999, according the U.S. Census, was between $40,000 and $50,000. At that level, the $215,000 average sale price in Homer is far from reach.
Based on the recommended mortgage-to-income ratio, a family in Homer with two working members earning $12 per hour could afford a $134,400 home. To get into the $200,000 home with a healthy debt ratio, that family would have to earn between $85,000 and $108,000 per year to support mortgages that can climb upward of $5,000 per month. A retiree who just sold a home in California may be able to afford those prices, but the average Homer resident still can not.
Defenders of capitalism (which I am sometimes – to paraphrase Churchill, it’s the worst economic system in the world except for all the others) often claim that when the rich move into an area and build houses, it still increases the economy because they hire people to build the houses, thus creating jobs. In this case it doesn’t work – instead it drives families out because they can no longer afford to pay the property taxes and the like – and the construction workers don’t make enough to afford houses on increasingly expensive land.
A similar thing has occurred in my wife’s hometown of Sierra Vista, Arizona. It borders a military base – but because of rich retirees moving in and increasing the property values, most military families can no longer afford to live in Sierra Vista. All one must do to see the evidence of this is to take a short drive in the main neighborhoods and see that, more than 1/3 of the houses are for sale. A clear indication that old residents are on the way out.
Any supporters of the rich want to defend this practice of oppressing the poor and middle class, or is this another example of what the Book of Mormon often warns against?
[UPDATE: Small change in the title – I decided the original word was too strong and not what I meant to convey].