National / International News

How rising rents, falling incomes crush communities

Marketplace - American Public Media - Mon, 2014-06-30 11:42

Garrado Odigie sat sobbing in his chair. 

He’d gotten the most important thing to him in his life, and it meant his life was falling apart. Four months earlier his long, drawn out, international custody battle for his children had finally ended. After several years of separation, his children had been returned to him.

All five of them, ages 5 to 14. To his one bedroom apartment in Flushing. 

“These are the things I live for,” Odigie said. “Five kids, one bedroom apartment. I put the girls on the bedroom, then I let the boys sleep on the living room, then I sleep on the floor. Then everybody’s coming down to sleep with daddy on the floor. Nobody wants to sleep on the bed.”

Odigie says he’s been looking for a two or three bedroom in his area of Brooklyn, but most places ask for around $2,000. “I cannot afford that right now.”

In fact, he can’t afford his current rent either now. The rent is a little over $1,000 a month, half of his annual income. A single father accustomed to working two to three jobs late into the evening when his children weren’t with him, Odigie found he needed to quit one job and reduce his hours at the other if he was to take them to therapy, go with them to the doctor’s, or to simply spend time with them.

He’s four months behind on rent. He’s in housing court, on the verge of getting evicted. He says his kids will live at his church for awhile so he can work and save up some money.

“My 11-year-old just told me, ‘Daddy, why are we keeping on moving?’” says Odigie, his voice breaking along with his composure. “‘We tired.’ You know. I’m doin' my best to take up my children.”

People who, like Odigie, sit precariously on the edge of personal calamity don’t need much of a push to slip over. The rent will do it. The rent does do it. Often.

“We see all the time people having to make really terrible choices,” says Judith Goldiner, an attorney in charge of the Civil Law Reform unit at the Legal Aid Society. “Do they feed their kids, do they buy medicine for their kids, do they buy clothes -- or do they pay rent? The rents just keep on creeping higher and higher.”

It is not simply that rents have risen, it is that renter incomes have fallen since the recession. Between 2005 and 2012, median gross rent in the U.S. rose from $868 to $897 (in 2011 it was $902) In the same period, median household income declined from $55,158 to $52,123 in real terms according to data compiled by the Furman Center for Real Estate and Urban Policy.

Some landlords, perhaps out of greed, or perhaps out of their own struggles to maintain old buildings, have tried to push lower income renters out.

“Sometimes we see landlords who cut off services, take people to housing court even if they don’t owe any money, tell people they don’t have the right immigration status and so they have to leave or they’ll call INS – all kinds of bullying,” says Goldiner.

Rent burden is the share of a renter’s income spent on gross rent – the lump sum to the landlord, plus utilities and other fees. The U.S. Department of Housing and Urban Development (HUD) labels rent burden “between 30 and 50 percent of household income on gross rent as “moderate,”  and anything above 50 percent as “severe”.

Last year was the first year more than half of households in New York City were rent burdened, meaning they pay more than a third of their income in rent. In 2011 37 percent of renters in Philadelphia were severely rent burdened, paying more than 50 percent of their income towards rent. Sixty-two percent of all renter households in Los Angeles were severely (50 percent going towards rent) or moderately rent burdened.

“The largest increases in the share of households that are rent burdened are actually happening at the moderate and middle income level,” says Max Weselcouch, director of the Moelis Institute for Affordable Housing Policy at NYU.

The forces behind all of this are, it turns out, fairly simple: supply and demand.

“There’s been very little production of new housing,” says Weselcouch. “Even though new housing construction has begun to rebound a little bit in 2012 and 2013, it’s still at lower levels than we’ve seen since at least 1960.”

Simply put: During the Recession, people made less money and built fewer places to live. After the Recession, people are still here, there are more of them, and they still need places to live. Many of them are moving to cities – 200,000 to New York City in the past three years alone – further piling onto demand.

“This is kind of a classic economic problem,” says Weselcouch.

Some of the strategies cities have used to address the problem are under strain.

Many cities offer developers incentives to build temporarily affordable units, though many of these agreements are now expiring (In New York, 25,000 expired since 2007 and another 50,000 will be eligible to do so in the next ten years). New York’s new mayor, Bill DeBlasio, has promised to create 200,000 new affordable units in ten years.

One approach is rent stabilization. For 34 percent of rental units in New York, a politically-appointed board determines by how much rents can rise each year. Several cities do this. Many landlords do not like it.

“To try and micromanage the increases each year is ludicrous,” says Frank Ricci, director of government affairs for the Rent Stabilization Association, the largest trade group for residential building owners in New York. He says landlords suffer when they can’t raise rents by as much as they’d like. 

“When you own a building, there are big expenses that pop up from time to time. Could be the roof, could be the boiler, you don’t know what it is, but when big things break, they cost a lot of money,” Ricci says - and half of all residential buildings are over 75-years-old. His opponents argue landlord incomes have been rising faster than operating expenses for nearly a decade.

Property taxes and fees put more pressure on landlords as well, says Ricci. Property taxes on rental units in New York City, which are higher than those for homeowners, are the subject of an ongoing lawsuit. 

There are many ingredients that go into the acrid crucible of the real estate market for renters. Supply, demand, taxes, investors, summering jetsetters, declining incomes, greed, desperation.

At the end of the day the exact recipe is of little consequence to people like Garrado Odigie, who is still searching for a way to keep a roof above himself and his children.

Amish iPhones, mansions and millionaires?

Marketplace - American Public Media - Mon, 2014-06-30 11:36

Over the past three decades, facets of Amish culture have been shifting toward a more modern take on life - one that includes iPhones, mansions and millionaires. 

Jen Banbury wrote an article for Bloomberg Businessweek called "What Happens When The Amish Get Rich", which explores modern-day Amish culture and capitalism, says Banbury: 

“It’s also very new for them. This has all happened within the last three decades or so... this massive shift from agriculture to business, and it turns out they’re great businessmen.” 

The shift towards business has also caused some changes within the community. Now, some Amish are using cell phones to conduct business: 

“So many Amish have a cell phone for business, but I see these guys talking on the phone a lot… and they’re not always talking about business.  And it’s this slow creep of technology that they themselves acknowledge is kind of terrifying, because it is so radically changing.” 

Banbury says it's difficult for people in this community to adapt to changing culture. It takes a lot to adapt their well-established rules. The church has a process to reprimand someone if they do something ostensibly out-of-bounds, like buying a fancy propane-driven fridge. But if the church does nothing, then everyone else in the community jumps on board and buys one of these fridges. 

"[They're] really struggling to intigrate it into their life in a way that does not destroy the essence of their Amishness. But they're aboslutely changing. There's no question they're changing and the question is 'how far are they going to go?'" 

Listen to the full interview with Banbury in the audio player above.

Woman's body 'carefully concealed'

BBC - Mon, 2014-06-30 11:22
Two people are arrested on suspicion of murder after the body of an 80-year-old woman is found "carefully concealed" at her West Midlands home.

GM recalls 8.4 million more vehicles

Marketplace - American Public Media - Mon, 2014-06-30 11:14

General Motors announced Monday that it will recall 8.4 million cars manufactured between 1997 and 2014 due to a defect in ignition switches. Yes, that's 8.4 million more recalled vehicles for the embattled company. 

In a statement, GM says they are aware of seven crashes, eight injuries and three fatalities possibly related to the defect:

"GM expects to take a charge of up to approximately $1.2 billion in the second quarter for the cost of recall-related repairs announced in the quarter. This amount includes a previously disclosed $700 million charge for recalls already announced during the quarter...

Until the ignition recall repairs have been performed, it is very important that customers remove all items from their key ring, leaving only the vehicle key, and always use their seat belts. The key fob, if present, should also be removed from the key ring."

As we've learned: This could be a big deal for our key-carrying Marketplace listeners

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Obama Says He Will Use Executive Action To Address Immigration System

NPR News - Mon, 2014-06-30 11:13

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NPR News - Mon, 2014-06-30 10:37

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Makarova upsets fourth seed Radwanska

BBC - Mon, 2014-06-30 10:33
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NPR News - Mon, 2014-06-30 10:26

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Girl injured by 'exploding' charger

BBC - Mon, 2014-06-30 10:23
A teenager was injured after her mobile phone charger "exploded" while she was travelling on a bus in Gwynedd.

University entry soars for London poor

BBC - Mon, 2014-06-30 10:19
Almost two-thirds of disadvantaged pupils taking A-levels in inner London go into higher education - more than better off pupils outside the capital.

VIDEO: Highlights: France 2-0 Nigeria

BBC - Mon, 2014-06-30 10:14
Paul Pogba's header and a Joseph Yobo own goal send France into the quarter-finals after a hard-fought 2-0 win over Nigeria in their round of 16 match in Brasilia.

Altidore Will Be Ready For Belgium, U.S. Soccer Says

NPR News - Mon, 2014-06-30 10:03

Forward Jozy Altidore, who missed the U.S. team's last two World Cup games with a strained hamstring, is "ready and available" to play Tuesday, U.S. Soccer has announced.

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Murray sweeps into quarter-finals

BBC - Mon, 2014-06-30 10:02
Defending champion Andy Murray beats 20th seed Kevin Anderson to reach the last eight at Wimbledon for the seventh time.

VIDEO: Murray hits 'shot of the tournament'

BBC - Mon, 2014-06-30 09:59
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BBC - Mon, 2014-06-30 09:48
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Israel Says Bodies Of 3 Students Have Been Recovered

NPR News - Mon, 2014-06-30 09:48

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