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Business/Finance See other Business/Finance Articles Title: Homeless Encampments and Luxury Apartments: Our Long Strange Boom The cold truth is homelessness and soaring rents are the only possible outputs of central bank policies that inflate asset bubbles. It's been a long, strange economic boom since the nadir of the Global Financial Meltdown in 2009. A 10-year long boom that saw the S&P 500 rise from 666 in early 2009 to 2,780 and GDP rise by 43% has been slightly more uneven for most participants. First and most importantly, household income hasn't risen by the same percentages as assets, GDP or costs of big-ticket expenses such as rent, healthcare and college tuition. The broadest measure of income, median household income, has registered a 23% increase in the past decade, roughly half of GDP gains and a mere fraction of stock market and housing gains. It's well known income gains have skewed to the top, as revealed by Census Bureau data: Historical Income Tables: Household (US Census Bureau). The bottom quintile (20%) registered income gains of 20% from 2009 to 2017, while the middle quintile (roughly speaking, the middle class) gained 25.5% and the top 5% enjoyed a 31.6% gain. The raw numbers tell the story in a slightly more visceral fashion: Upper limit of bottom quintile: $24,638 up 20% since 2009 Upper limit of middle quintile: $77,552 up 25.5% since 2009 Lower limit of top 5%: $237,034 up 31.6% since 2009 (the median household income is much higher--around $350,000 according to Household Income Quintiles the Tax Policy Center.) So the top 5% earn at a minimum 10 times the lowest quintile income and around 4 or 5 times the middle quintile income. Here in Northern California, this has manifested in rapidly expanding homeless encampments a stone's throw away from new luxury rental apartments charging $3,000 and up for one-bedroom flats and $4,000 and up for two-bedroom flats. Meanwhile, the streets are filled with potholes and cracks. Maintaining streets--presumably one of the core missions of local government--is simply not being done in a timely manner. Major streets are in such disrepair that local businesses have taken to raising banners demanding "pave our street now." Let's look at three charts of the long, strange boom from 2009: median household income (up 23%), national rents (up 31%) and rent in the San Francisco Bay Area (up 52.4%). Rents are double the gains in median household income in many cities. Post Comment Private Reply Ignore Thread
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