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The Drastic Issue of Housing Prices

The warm breeze of summer air brushed the back of my neck, the sun beamed into my

eyes causing a distinct glare in my vision. It was the Summer of 2021, heat waves were flowing

through California as waves flow through the ocean. The heat was becoming more and more

intense. I was walking down the street in white Nike’s, surprisingly, the rubber did not melt. I

was craving a cold, thirst-quenching drink from a boba shop, T4. As I was walking down San

Carlos Drive, I saw somebody holding a dirty cardboard sign asking for help. Assuming that they

were struggling financially from their sign and had nowhere to go, I thought to myself, in this

scorching hot weather, being outside for a long period of time could be dangerous or cause major

strains on someone’s health. There was no sign of shelter or liquids that could benefit the person.

Being aware of the situation, I felt nothing but despondency for the person experiencing this. It

did not feel like a surreal situation, I could not comprehend how one gets in this situation or what

would have to happen for myself to end up in this situation.

I have always been one to wonder and become curious about situations such as this one.

How will this person survive? Will their life change? Will they eventually get off the streets into

affordable housing or shelter? All these thoughts cross my mind continuously, ideas and

solutions wanting to transpire. I have always wanted to find a way to help these people and help

them get off the streets, but as housing costs continue to rise, it becomes harder and more

challenging every day. I live in a house, so I am fortunate enough to grow up with enough money

to live a healthy and middle class life. These prices continue to grow and create more issues

surrounding homelessness and poverty; families and individuals are being forced to move or

relocate because they can not afford the rising costs. These problems keep occurring and

developing in the United States, worsening by the day. It affects all of America and I because

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when I grow up and become an adult who needs to pay for rent or housing, will I be able to

afford the costs? It causes stress and it creates issues but it will not ever stop.

My exposure to these issues and situations has been worrying and causing questions to

fill my mind. I want to expand my knowledge on this issue and find ways to improve the

situation for those less fortunate than others. I believe it would better prepare everyone if they

were to better understand this systematic issue. Allowing for change and affordable housing

would further improve this issue. There needs to be a solution to the problems that would help

those struggling and disadvantaged off the streets. The issues spreading like wildfire in the

United States and housing prices are just going to continue to rise until there is no longer

affordable housing for anyone edging the poverty line. The United States needs to prepare for an

economic suspension, where there is almost no price change and the economy would steadily

decline. There are many factors leading to rising housing costs and a destruction of the poverty

line, so how are the rising prices of housing causing the poverty levels to increase over the past

ten years?

The dramatic increase in housing prices is starting to impact the poverty line and job

openings throughout the entirety of the United States. The poverty line is the standard base of

living; this means you can receive all basic necessities of living. Currently, families living on the

poverty line are making barely enough to afford this housing, some do not even have enough for

rent and are being kicked out of their apartments or homes. The families or individuals can only

provide so much for themselves when working full-time for minimum wage, the increase in

minimum wage, yes does allow families to improve their monthly income but can also cause

their housing price to increase. A story provided by Amy Jo Hutchinson from a video published

by “Now This News,” states how a single mother has two jobs and a Bachelor's degree is

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struggling to make ends meet. She suddenly got promoted to manager at one job and started to

create a steady income. Her income was higher than before but this had a negative effect on her

life. After thirty days had passed, she was forced to report her new income to the Department of

Health and Human Resources; her rent got bumped from $475 a month to $950 a month. Within

60 days, she lost her benefits and was then forced to resign from her position and go back to

working part time as a lower class citizen. If she creates a better living for herself, she will be

forced to spend most of her income on rent; there needs to be a primitive solution that could help

lower class families generate higher incomes without having to suffer from rent costs and food

costs. Of course, inflation can also be an imposition in poverty; inflation is practically known for

changing the course of a nation’s economy. There could be higher or lower demand in any sort of

necessity resource or a common use item. For example, during Covid-19 there was a large

demand on toilet paper, people were worried they would not be able to obtain this common use

item over the course of the pandemic: “U.S. retail prices for toilet paper have already surged

about 20% from July 2021 to the end of last year,” according to NielsenIQ. This can also make it

impractical for families to spend a large sum of their paycheck for items anyone would consider

invaluable or an easy item to own. Inflation and housing prices kind of go hand in hand with

poverty: “Of course, one must add inflation into the mix--$751,000 in 2010 was more like

%891,000 today if we apply the Bureau of Labor Statistics's inflation formula. But that still

leaves SF up more than 85 percent in less than a decade” (Keeling). They can both fluctuate the

amount of spendings from low income families, this can prohibit the families from shelter or

food or any other necessity. A change is needed to lower the cost of common resources and

create a system or organization within the government to supply these items to lower income

families. This would help with the distribution process and allow those families to thrive off of

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their lower incomes. Obviously the main issue being housing prices and renting prices, they have

not lowered within the past decade and have been on a continuous rise. This rise is based on

density of population and aspiring jobs within the area of these homes. Monica Chang, the

person I chose for my first interview who got their Real estate Broker license in 2005, was a

mortgage broker until 2010 and has now been working as a local realtor since 2015 explained,

“The three main things that cause real estate prices to increase are jobs, location and population.”

These three factors of the increase in real estate help prove why this crisis is coming to a larger

frame of scale. It also can show the difference in price from 2010 to present day. As populations

in larger cities increase so will the housing prices, the increase mirrors each other.

House prices are outgrowing the profit of American citizens, causing it to be almost

impossible for them to pay housing. An article from Bloomberg states, “ December 2021, the

median US home grew in value by $52,667, out-earning the median worker, who pocketed

$50,000” (Florida). Home costs are continuously going to grow until nobody besides wealthy,

privileged citizens can afford housing. It is growing past the average median income of the

United States; this problem is something that should be taken care of and become a

governmental issue. People making the average salary or less will not be able to find affordable

shelter for themselves, causing more families and individuals to drop below the poverty line:

“Housing out-earned people in 25 out of 38 major US metros. In 11 markets, home values grew

by more than $100,000, effectively delivering twice as much as the median American worker,”

(Florida). The increasing pricing is causing people to officially become broke, and they cannot

afford the necessities of living; real-estate is starting to represent a currency and an investment

rather than a home. Florida from Bloomberg depicted in their article, “The median sales price of

US homes more than tripled between 1992 and 2021 from just under $150,000 to over $500,000,

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as the chart above shows.” The increases we are experiencing are abnormal and are causing

strain on the economy. The average American can not live properly in the United States and this

will cause an economic backlash. The economy will continue to grow until a point where it

cannot grow anymore, leaving it to only decrease for a long length of time. Overall, all these

issues are shown to increase the future poverty rate, as it decreases right now, it shows we are

stable but will not be for much longer. The devastating truth is that we are digging ourselves a

hole that is too deep to come back from.

Poverty is no stranger to rising prices and the number is influenced by a large increase of

inflation. Poverty has been affected by these rising prices for the past decade and or longer: "The

official poverty rate in 2021 was 11.6 percent, with 37.9 million people in poverty” (“National

Poverty in America…”). The poverty rate is ultimately higher than it should be and will continue

to rise over the current 11.6%. There is no sign of stoppage in the steady poverty rate as it has

stayed similar for the past year. In the book, Homelessness Is a Housing Problem How Structural

Factors Explain U.S. Patterns, Colburn and Clayton question, “Is this a failure of individuals,

politicians, markets, or other structural forces?” This really got me thinking about the situations

individuals could be in or what could have started this serious issue. A large portion of this issue

was based on governmental mistakes and the markets were forced on the economy. Investor

buying should be disposed of and they should not be allowed to own more than three homes.

This would help poverty rates decrease and allow for housing prices to decrease to a more steady

price. Older individuals are starting to experience more poverty because of the situation; their old

incomes do not match with the continuation of these rising prices. “Official poverty rates

decreased for people under the age of 18 and increased for people 65 years and older, but were

not statistically different for 18- to 64-year-olds,”(“National Poverty in America…”). Due to the

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change of housing prices, due to the elderly profiting from incomes lower than ours today, they

are not able to stay retired and stable financially. The prices raised to a point where their

retirement fund is now majorly invested in rent or housing. It majorly proves how these rising

prices in housing can cause major problems later on for those working nowadays. The income

level for poverty is not going to steadily match the rising costs of resources, items, food and

housing. As those prices increase majorly the minimum wage will increase at a gradual pace:

“Salaries are higher in California but if we are talking about our basic Blue collared worker then

they are not able to afford any of these housing payments” (Chang). Monica Chang is basically

explaining how the average worker will not be able to afford any housing payments due to the

increase over the past years; proving how these housing prices are not reasonable or normal.

According to Scott Simon, a realtor with a weekly podcast, “So home prices were hitting new

records, and they went up 30- to 40% nationally.” The increase is exponential and too

continuous. The prices are rising too quickly to be changed. My second interviewer was a

younger adult looking for a new apartment in Bellingham, Washington, the knowledge I received

from them was their personal experience with trying to find a new apartment during a period

where prices are rising, "It’s been pretty stressful looking for a new place because our options

have been limited. Prices have definitely gone up since we first found our current apartment, and

other apartments that we had looked at when we were looking to find this first apartment that

we're now looking to maybe move to in the area have also gone up in price and are now out of

our price range"(Steinert). The story I received from Theo Steinert explains how younger adults

or people who have just gotten out of college can barely afford the rising prices. It becomes

harder as they continuously rise and create it almost impossible for them to find affordable,

standard apartments in their price range. It supports the idea that the prices are drastically

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changing and the prices need to be lowered or put on a cap. Still, the question I want answered is

represented by the connection these two large issues serve. They both could be described as

puzzle pieces being placed together; they complement each other and give guidance to how one

or the other will turn out in upcoming years. If one has a large increase or decrease, they could

expect the same from the other one.

In specific parts of the United States, prices were increasing so dramatically, there were

wealthy individuals investing and buying multiple homes to turn a profit later. One specific

statistic portrayed this well, taking place in Denver, there was a dramatic increase of investors

which led to less opportunity of housing for disadvantaged citizens: “Additionally, buyers

choosing to purchase second homes or investment homes in Denver increased by 44% in 2022.”

(DeLeo). This statistic can illustrate how a large influence of investors can cause economic

backlash. As these investors take homes for profit, other lower class workers can not find

affordable housing to live in. According to Statista, the poverty rate in Colorado has risen about

1% from the previous year, showing a connection between the two. In other states as well, just

as in Denver there has been a large movement increase from out of state investors and new

residents in Idaho: “Overall, the percentage of people moving to Idaho from outside the state

increased by 21% in 2020” (DeLeo). The large number of investors led to the prices increasing

even more, also it causes countless people to be put closer to the poverty line and in jeopardy of

not finding housing. The large number of investors place a large impact on individuals living in

America and not just in largely populated areas; Idaho is ranked 39th in population in the United

States, noted from Census Government. “In the fourth quarter of the previous year, real estate

investors acquired 18.4% of U.S. houses, according to Redfin,” (M., Jon, et al). The total

increase in the United States being almost 20% means ⅕ of the United States housing is not being

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implemented to house U.S. citizens. This vast number is causing more people to be living on the

streets, not only is it increasing prices but it is taking a large number of houses off the market.

The poverty rate is slowly decreasing, but is still a large, growing topic in the United

States due to the rising costs of housing. Even while decreasing, a vast portion of the United

States is living below the poverty line but even those on the line or slightly above are brutally

struggling to find housing, “the 158.7 million men in the United States, 16.8 million live below

the poverty line, or 10.6% – below the 11.8% poverty rate across all groups” (Stebbins). The

poverty rate should not make up 1/10 of the population; this amount of people should not be

struggling to obtain certain necessities. As the population rises in the United States, so will the

overall poverty rate, more and more immigrants are depending on the United States as a safe

haven. According to Stebbins from USA Today, “New Mexico's 16.6% poverty rate is the

highest in the region and third highest among states.” New Mexico is one of the main immigrant

supportive states in the country, a lot of people from Mexico tend to seek shelter here but cannot

afford the living situations New Mexico provides. The costs are too high causing these

disadvantaged families to add to the poverty rate number. Obviously, the United States should be

acting as a safe territory for those suffering from other countries, but there needs to be provided

shelter and resources for those migrating. Poverty is just continuing to grow, even if the numbers

seem to be decreasing; there is no plan to be seen and house prices are continuing to rise. “The

poverty rate in California is 16.4%, one of the highest in the United States”(Libguides). The

poverty rate in California is extremely high and it is one of the states in America to see majorly

increasing numbers when it comes to housing prices. The connection between the two issues is

not something unseen; the United States ignores it and does not try to better the situation for

those in need.

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The increase of housing prices and the development of house investing is causing people

to not afford proper housing or the necessities to live; people need to make more than average

working pay in order to afford the average house price. This is causing poverty rates to increase

for elderly workers or retired workers. Their older salaries do not match up to our housing costs

which is taking an economic downturn on them. They spend more than a majority of their

retirement fund on housing. The poverty rates have been slowly declining but are going to

increase in the future due to the higher costs in housing and resources. The economy is going to

start declining rapidly once there is a price swelling. We need to take change into the matter of

our own hands and find a solution to change what is occurring. Finding a solution to the problem

before it begins would be the first step. Aspiring to find solutions should be the way to solve the

problem; we should not be waiting for the problems to come to us, as that will just lead to further

failure. Overall, these issues need to be heard and stop creating problematic situations for United

States citizens.

Works Cited

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Arnold, Chris, et al. “Housing Prices Soar with Rising Inflation.” NPR, NPR, 11 June 2022,

https://www.npr.org/2022/06/11/1104368918/housing-prices-soar-with-rising-inflation.

Builders, Fortune. “US Real Estate Market Trends & Projections [Updated 2020].”

FortuneBuilders, https://www.fortunebuilders.com/real-estate-map/.

Colburn, Gregg, and Clayton Page Aldern. Homelessness Is a Housing Problem How Structural

Factors Explain U.S. Patterns. University of California Press, 2022.

Chang, Monica. Personal Interview. 28 Feb. 2023.

DeLeo, Isabella. “The Fastest Growing Cities in the US and How Their Housing Prices Have

Changed.” UpNest, 9 Nov. 2022,

https://www.upnest.com/1/post/cities-fastest-growing-populations/.

Florida, Richard. “Why Did Housing Costs Explode during the Pandemic?” Bloomberg.com,

Bloomberg, 8 Sept. 2022,

https://www.bloomberg.com/news/features/2022-09-08/why-did-housing-costs-explode-d

uring-the-pandemic.

“Libguides: Our World 2022: Stepping Forward: National & Regional Demographics.”

National & Regional Demographics - Our World 2022: Stepping Forward - LibGuides

at La Salle Academy,

https://lasalle-academy.libguides.com/ourworldpoverty/demographics.

M., Jon, et al. “Turnkey Real Estate Investing: Turnkey Property Investment.” Norada Real

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Estate Investments, 21 Oct. 2022, https://www.noradarealestate.com/.

“National Poverty in America Awareness Month: January 2023.” Census.gov, Census Bureau, 20

Dec. 2022,

https://www.census.gov/newsroom/stories/poverty-awareness-month.html#:~:text=Official

%20 Poverty%20 Measure,and%20Table%20A%2D1).

“Poverty Rate in Colorado 2020.” Statista, 30 Sept. 2022,

https://www.statista.com/statistics/205441/poverty-rate-in-colorado/.

Stebbins, Samuel, and Thomas C. Frohlich. “The Poverty Rates for Every Group in the US:

From Age and Sex to Citizenship Status.” USA Today, Gannett Satellite Information

Network, 28 Feb. 2020,

https://www.usatoday.com/story/money/2019/11/06/united-states-poverty-rate-for-every-gr

oup/40546247/.

Steinert, Theo. Personal Interview. 21 April. 2023.

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