• OK, How About Rent vs. Income Just For Renters?

    I’ve gotten some flak for this chart that I put up this morning:

    The problem is that this chart uses median income for everyone, including homeowners. How about income just for renters instead? There’s no single series for renters that everyone agrees on, but here it is using data from the Consumer Expenditure Survey:¹

    If the CES is to be believed, the average income of renters has increased at the same rate as rent since 2001, and after a dip during the Great Recession it’s increased faster than rent. This is mean income, not median, which I’d prefer, but the growth rate of the two is probably pretty similar, especially over the short time frame of the past decade.

    I have reason to be a little suspicious of the CES income figures, but only by a little bit. I wouldn’t be surprised if renter income is a little lower than this chart shows, but I have no reason to think it’s different enough to change the basic story here.

    ¹I’m also using a BLS series for rent that I think is more accurate than the one I used this morning. It shows rent growing faster than my original chart.

    POSTSCRIPT: And just to make this clear, there’s no disagreement that families at or below the poverty line have to spend a big percentage of their income on rent. However, this is not a failure of the market. Builders could put up shelter in the middle of Los Angeles for $500 per unit, but not anything that would meet the building code. I’m pretty sure no one wants low-income housing that’s little more than a one-room hut with a sink and a couple of electrical outlets, which means that if we want more housing for the poor the only real answer is more public assistance. And this is something we should do.

  • Trump Is Sad That Paul Ryan Didn’t Investigate Trump More

    Michael Brochstein/ZUMA

    Instead of watching Federer and Nadal play at Wimbledon today,¹ Jon Chait apparently decided to watch Donald Trump’s latest press avail:

    In a lengthy rant to reporters at the White House today that was unhinged even by Trumpian standards…

    Yeah, sure, how many times have I heard that before? Anyway, fine, carry on. The subject is Paul Ryan, who popped out from retirement yesterday to remark that Trump was astonishingly ignorant about how the government works:

    In a lengthy rant to reporters at the White House today that was unhinged even by Trumpian standards, the president made several attacks on the former Speaker of the House. Employing his favorite method of turning the insult around on the insulter, Trump claimed it was Ryan who had no knowledge of the government: “Frankly, he was a baby, he didn’t know what he was doing.”

    More strangely, Trump’s indictment of Ryan’s tenure includes lambasting him for failing to get subpoenas: “He was no leader … he wouldn’t get subpoenas … when Nancy Pelosi hands them out like they’re cookies.” It’s true that Ryan did not use his subpoena power as Speaker. That’s because he was cooperating with Trump by refusing to allow any oversight of the administration. Ryan refused to send out subpoenas because Trump didn’t want him to. Trump is attacking Ryan for helping to cover up Trump’s misconduct.

    This is nothing new for Trump. He routinely says whatever’s handy, even if it directly contradicts something he said last year or last month or even yesterday. I don’t even know if he knows he’s doing it. He just blurts out whatever he thinks will appeal to his base, in the firm knowledge that the only people who will realize he’s being a moron are just effete intellectuals who won’t vote for him anyway.

    ¹Which I’m totally not doing because I’m, you know, working.

  • Are Democrats Now the Party of Open Borders?

    Kris Grogan via ZUMA

    Elizabeth Warren has an immigration plan. Here are the highlights:

    This is a curious plan. As near as I can tell, it recommends no actions to improve border law enforcement in any way. There’s nothing about either a wall or a “virtual wall.” There’s nothing about E-Verify. There’s nothing about “smarter” or “more efficient” enforcement. No one will ever be deported—except, presumably, for serious felons, though Warren doesn’t even say that explicitly. Expedited removal will be ended. The Border Patrol will be reshaped from “top to bottom,” and will focus their efforts on “homeland security efforts like screening cargo, identifying counterfeit goods, and preventing smuggling and trafficking.” The whole thing is very similar to Julian Castro’s plan.

    I have previously criticized Republicans who accused liberals of wanting “open borders.” President Trump tweets about this endlessly. But I have to admit that it’s hard to see much daylight between Warren’s plan and de facto open borders. As near as I can tell, CBP will be retasked away from patrolling the border looking for illegal crossings; if border officers happen to apprehend someone, they’ll be released almost immediately; if they bother to show up for their court date, they’ll have a lawyer appointed for them; and employers will have no particular reason to fear giving them a job.

    Am I missing something here? Does Warren’s plan explicitly make it vanishingly unlikely that anyone crossing our border will ever be caught and sent back?

  • Alex Acosta Is Gone

    Jeff Malet/Newscom via ZUMA

    Another Trump cabinet member bites the dust:

    Labor Secretary Alex Acosta resigned Friday amid intense scrutiny of his role as a U.S. attorney a decade ago in a deal with Jeffrey Epstein that allowed the financier to plead guilty to lesser offenses in a sex-crimes case….As he prepared to leave the White House, Trump called Acosta a “great labor secretary, not a good one” and a “tremendous talent.”

    “This was him, not me,” Trump said of the resignation decision.

    Needless to say, this had nothing—nothing—to do with the fact that Acosta cut a sweetheart deal for Epstein when he was first charged with soliciting dozens of underage girls for prostitution back in 2007. Acosta just didn’t want a hailstorm of negative publicity to do any harm to the crucial work being done by Trump to make America great again.

  • Washington Can’t Solve a Housing Crisis That Doesn’t Exist

    In the New York Times today, Lizabeth Cohen tells us once again that America has a housing crisis:

    Only Washington Can Solve the Nation’s Housing Crisis

    In recent months America’s affordable housing crisis, a long-simmering issue for people of low and moderate incomes, has burst onto the front page. Rents are rising much faster than income, while the median home price in some 200 cities is $1 million….The private market is clearly failing. Although many city and state governments are motivated to take action, they have limited tools at their disposal….At its root, the crisis is a supply problem. Between 2011 and 2017, the country lost four million low-rent apartments. This has driven up demand for what remains, with the predictable result that a third of all households spend more than 30 percent of income for shelter. In many prospering cities, large numbers pay more than 50 percent.

    I feel like this stuff is manufactured in an underground factory somewhere and shipped out randomly to newspapers across the country. Does anybody even bother to compare it to the facts anymore? Let’s start with the claim that “rents are rising much faster than income.” Is that true?

    Nope, this isn’t true. Rent has risen only slightly more than income since 2001, and has risen more slowly than income since 2010. Next up is “median home price in some 200 cities is $1 million.”

    That’s true, but pretty meaningless. Click the link and the first example is Biltmore Forest, North Carolina. This is a tiny enclave of 1,300 on the outskirts of Asheville that’s built around the old Biltmore Estate and the Biltmore Forest Country Club. It’s millionaire country, just like most of the other cities on the list. In fact, a full quarter of them are just subdivisions of a single metro area: San Francisco and Santa Clara. Most of us would call that one place, not 46.

    And needless to say, that $1 million figure hasn’t been adjusted for inflation over the years. It never is when someone wants a scary headline.

    Next up is “the crisis is a supply problem.” Is it?

    As of 2018, there were a total of 138 million housing units for 128 million households. That’s 9% more housing units than households, the same as in 2001. The number of rental units per household has gone up. And the rental vacancy rate is right at its long term average.

    Nor has the nation “lost” 4 million low-rent apartments. What that probably means (though there’s no telling, really) is that 4 million apartments have crossed some arbitrary threshold defined as low-rent. But if you adjust for inflation, probably nothing much has happened at all. Those apartments are still around and still cost about the same as ever.

    Next up is “a third of all households spend more than 30 percent of income for shelter”:

    The median household pays about 20 percent of their income in rent and that hasn’t changed over the past decade. If you go all the way down to the average of the second income quintile—which is about a third of the way from the bottom—average rent has gone up slightly, from 32 percent of income to 34 percent. But that’s using the median rent. People at that income level mostly pay less than the median, which means that their rent is probably around 25-30 percent of their income.

    That accounts for 70 percent of all households. Some of the rest probably do pay more than 30 percent of their income in rent, but not all of them. The real number is most likely a quarter of households or less. And more to the point, it hasn’t changed other than slightly over the past decade. Just for comparison, here are average mortgage payments for homes sold over the past two decades:

    There’s no change here either, and since rents and mortgages usually move together, it’s not surprising that rents haven’t increased significantly in recent years.

    In other words, virtually nothing in the setup for this op-ed is true. Rents aren’t out of control; housing inventory isn’t low; and rent as a percentage of income is about the same as it was ten years ago. There is no generalized “rent crisis” in America.

    Now, there’s no question that a few specific cities have seen big rises. The Bay Area is obviously one, Denver is one, and Seattle is another—though the market has responded recently in Seattle and housing development is now increasing. But if you look at big cities more broadly, there’s not even a generalized urban rent crisis.

    I would be delighted to improve housing assistance to the poor, who certainly do pay a large percent of their income in rent. The waiting list for Section 8 housing vouchers, for example, is years-long in most cities, and god knows we should make this program more generous. But can we please stop inventing a “housing crisis” to justify it?

    POSTSCRIPT: One thing worth pointing out is that it’s just about impossible to get reliable statistics that compare incomes of the poor to average rents of the poor. There’s no question that the poor pay a lot for housing in big cities, but it’s hard to say if that’s gotten significantly worse over the past few decades. It’s also hard to say just how much the average poor household pays.

  • Trump Caves In, Won’t Put Citizenship Question on 2020 Census

    President Trump is caving in to the Supreme Court. That’s too bad. I was hoping to watch the show. Instead he’s doing this:

    Trump himself is typically incoherent trying to explain what this is all about, but Attorney General Bill Barr explained that they hope to use this information for apportionment. That is, they presumably want to apportion members of Congress by number of citizens per state, not number of residents. This is going to be tough sledding given the clear wording of the 14th Amendment:

    Representatives shall be apportioned among the several States according to their respective numbers, counting the whole number of persons in each State, excluding Indians not taxed.

    It says persons, not citizens, and the framers of the 14th Amendment clearly knew the difference. I suppose the Trumpies could try arguing that “Indians not taxed” really means “anyone not taxed,” and that “not taxed” means “not paying income tax” even though the income tax hadn’t been invented at the time. Other than that, I’m not sure how they could argue for apportionment based on citizens instead of residents. But that’s probably just because I’m not being creative enough.

    Alternatively, Republicans could leave overall apportionment alone but try to draw congressional districts based on citizens, not residents. This would open up new avenues for gerrymandering that, for example, would probably keep Texas red for a while longer. The Supreme Court has previously signaled that it might be open to this kind of thing.

  • Lunchtime Photo

    Last night I asked my sister to pick a flower for today’s photo. How about a daisy? she said. Luckily I have one on tap, so today’s photo is a garland chrysanthemum, also known as a garland daisy, growing among the sunflowers in a scrubby patch of weeds at the Great Park in Irvine. According to Wikipedia, the leaves are “an important ingredient in Taiwanese oyster omelettes and, when young, are used along with stems to flavor soup and stir-fry.” Oyster omelettes?

    April 20, 2019 — Irvine, California