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Among the lesser-reported impacts of the Great Recession, during which time millions of Americans lost their homes to foreclosure, is the continuing surge in rental housing demand. Demand has inflated rental rates in already costly markets throughout the country. But rental price inflation is not just a problem hitting high cost of living regions in California and New York — it has hit 90 cities nationwide with no end in sight. Rental costs between 2011 and 2012, alone, increased 4 percent nationally, whereas rents in some markets during a broader period — between 2000 and 2012 — have inflated nearly 25 percent, a study by the Joint Center for Housing Studies of Harvard University reports.

High demand and short supply means one thing: higher prices. But housing isn’t merely a luxury people can forgo. Increased demand for rental housing post recession does not merely reflect the fact that mortgage lending standards are more stringent, but the reality that many Americans are still attempting to rebound from a downwardly mobile spiral. Just because rents are rising doesn’t mean renters are in a position to absorb the price hikes. To the extent rental property demand is an outgrowth of the economic meltdown and stagnant wages — in spite of job growth in more recent years — it would appear housing reform is a topic seriously overdue for national attention.



The Shape of Crisis to Come



Today’s landlord isn’t simply a kindly gray-haired lady looking to rent out a room or an apartment. Housing inflation is driven more so by investors who hold millions of dollars of assets within a given community, if not nationwide. If large-scale property owners could be compelled by state or federal legislation to peg year-to-year rent increases to some combination of inflation and the prevailing median annual incomes of community members occupying similar housing, it might be possible to boost economic gains in other segments of the economy.

Nationally, support for raising minimum wage has gathered momentum. But what if we’re having the wrong conversation? Raising the minimum wage, when inflation is purportedly stable and interest rates remain at record lows, is nonsensical — unless one considers a leading reason why minimum wage earners are sorely in need of a pay increase in the first place: to keep a roof over their heads. Talk of increasing minimum wage is controversial, in part, because critics fear increased labor costs may slow job growth or push consumer prices higher, nullifying any initial advantage raising the minimum wage may impart.

Slapping a bandage on a hemorrhage begs the question: Why not tackle the problem at its core — housing inflation? In the wake of the housing bubble bust, the Harvard study released in June 2014 finds that an unprecedented number of renters in major markets from Miami to Los Angeles are allocating in excess of 30 percent of their monthly pay toward rent, with rents at a 30-year high a Zillow report concludes. And it’s not just young adults who comprise the ranks of the rental class, either. Increasingly, renters consist of families and middle-aged adults, too. Devoting increasing amounts of one’s pay to the cost of housing is likely to continue as rents, much like health care, continue to outpace and out-inflate the broader economy. But it’s the ripple effects of housing inflation that ought to have Republicans and Democrats alike worried.




Robbing Peter to Pay Paul

The elephant in the living room that few journalists, economists and politicians are talking about is the emergence of price gouging in major rental markets. If nothing is done to reform high-risk housing markets, it is likely that other parts of the country, where costs of living are significantly lower, will follow in the steps of overpriced markets in Seattle, San Francisco and elsewhere. Ignoring this economically-destabilizing trend is not an option. As renters, not unlike the sub-prime home buyers who preceded them, place higher percentages of their incomes toward rent, fewer households can be expected to save for a rainy day and more Americans will underfund their retirements. This is a disaster of grave future proportions because families that do not have adequate savings are at greater risk of filing for bankruptcy, and may become dependents of — or proponents of — prolonged unemployment benefits, taxpayer-funded welfare programs and the like.

During the Great Recession, demand for social safety nets grew to such an extent that beltway Republicans advocated cutting benefits to reign in costs. (To cite an example popularized during the recession, one in seven American families were said to be eligible for food stamp benefits.) And yet cutting entitlements, just when they are needed most, is a cruel if not superficial fix. Instead, legislators at the state and federal level should look at the underlying reason why so many Americans are living paycheck to paycheck in the first place. One can, of course, cite the usual suspects — decades worth of outsourcing jobs alongside losses brought about by automation — but second only to health care, housing is a segment of consumer spending that poorly reflects income growth or inflation at large. If we want to put the economy back on solid footing, reconciling the disconnect between the rate of inflation, wage growth and housing costs must become a national priority — before the next economic downturn. 



No longer do rental price trends lie in the hands of small-time landlords. Demand isn’t the sole explanation, either. If, however, there are 10,000 rental units in a given city that are owned by the same firm, and that firm should push the limits of what the market can bear, Mom ‘n Pop property owners are likely to follow suit if only because heavyweight competitors have set the tone. In much the same way the bank bailouts paradoxically generated even bigger too-big-to-fail banks, the Great Recession set the stage for investors to scoop up real estate assets throughout the U.S. at fire sale prices. And that scarcely bodes well for price diversity in the years to come.



Affordable Housing, a National Security Issue?

Rather than advocate for rent control in the traditional sense — that is, cost-control provisions aimed at low-income tenants — lawmakers should reign in the market-inflating practices of housing price trendsetters across the board — and, in particular, limit the ability of foreign real estate investors to heavily influence domestic real estate markets. This might be accomplished by pegging year-to-year rental rate increases to a combination of local inflation and median incomes in a given area for like housing. This is not to say that reform ought to be so draconian as to mandate outright rental rate caps. Large-scale private equity groups may continue to increase rental rates to reflect supply and demand — but in so doing perhaps those who routinely test the upper limits of the non-luxury rental market ought to incur a residency requirement, forgo tax incentives and/or pay a penalty that can be used by state and federal authorities to shore up the safety nets savings-poor Americans are apt to turn to in the event of crisis or an unplanned retirement.

Affordable housing is the missing ingredient in the health and stability of the broader economy. Assuming it were possible to craft effective reform, households would be in a better position to fund their own savings, lessening the likelihood that illness, recession or job loss will propel families into bankruptcy or thrust them into the unenviable ranks of taxpayer dependents. If a housing reform bill were to incentivize large-scale property management owners to reconcile rental prices to inflation and local income levels, we might see an end to nonsensical situations in which demand for rental units reaches all-time highs precisely when the economy hits all-time lows. Moreover, if such legislation were to target large-scale investment groups — and foreign residential property investors in particular — it might also compel them to scale back their holdings and thus diversify real estate markets in ways that will contribute to improved market competition.



Media coverage on the state of the housing in California and other “harbinger markets” throughout the country warn of more price hikes to come, with double-digit percentile gains slamming rental markets from Las Vegas, Nevada to Southern California’s outlying Inland Empire — well into 2016. The fact that home ownership is the lowest it has been since 1995 — even as renters in some markets are now spending 40 to 50 percent of their monthly pay on housing — speaks for itself: This is an unsustainable trend, with unsavory social and demographic ramifications. As rents increase relative to lackluster wage growth, nontraditional living arrangements, recession or no recession, will become commonplace. Census Bureau reports in the years to come, for example, may find more midlife adults pairing up with roommates not unlike their college-age counterparts a generation ago. Homeownership, increasingly, may become the domain of the wealthy and multigenerational cohabitants. All the while, fewer “marrying age” Americans may tie the knot and take the homeownership leap, for the same economic reasons that came to light during the recession. Taken together, these trends may transform the U.S. into a “rentership society” in which putting down fewer roots — a far cry from the American Dream — becomes the new normal.

Some readers may recall when non-matinee movie tickets could be had for substantially less than $10-$14. But when New York City residents began ponying up nearly double the national average a number of years ago, ticket prices nationwide began to follow suit. Rental price trends, similarly, vary by region and demand. And yet the more rent payers are willing to bear, the more it is likely to push up the cost of renting — and living — far outside the likes of New York and California. If we don’t like the shape of things to come, now is the time to place a national spotlight on housing reform. The bottom line? If we want to stabilize the economy, increasing minimum wage and loosening mortgage lending standards are far from the only answers. It’s time to stabilize rental markets, too. And not just for the benefit of low-income tenants, either. Housing is an inescapable expense. And we’re all on the hook.



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RESOURCES

The Coming Nightmare of Wall Street-Controlled Rental Markets | Alternet

There’s Only One Way Rents Will Go: Sky High | The Fiscal Times

Wall Street’s Hot New Financial Instrument: Your Rent Check | Mother Jones

There Will be No Real Recovery Without the Middle Class | Forbes

In Many Cities Rent is Rising Out of Reach of Middle Class | New York Times

The Rent Bubble is Going to Blow Up Across the Country | The Daily Beast

Rents are Rising but People aren’t Making any more Money | ThinkProgress

Wall Street’s Rental Home Gamble: How worried should we be? | Al Jazeera American

The Five Biggest Benefits of Owning Real Estate | The Joint Center for Housing Studies at Harvard University

A 25-year-old man who in March was diagnosed with tuberculosis was arrested some 15 miles outside of Bakersfield, California, after vacating a motel room in which he was ordered to remain while receiving treatment.

Half a world away, The World Health Organization has confirmed more than 800 Ebola cases in three West African nations. Thus far, one American has died and two more are gravely ill.

Appearing Tuesday, July 29 on CNN to address the concern that Ebola’s emergence outside of West Africa may be but one airline flight away, Dr. Marty Cetron, director of the CDC’s Global Migration and Quarantine Division, indicated that preparation, recognition and containment is “more important than speculating on propababilites of disease moving around by plane”.

The CDC describes the risk of Ebola showing up in the United States as “remote”. The American widow of a top official in the Liberian Ministry of Finance, whose spouse collapsed and later died, sees it differently. Decontee Sawyer told a Minnesota news station that the outbreak “is as close as the front door”.

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Some years after the G. W. Bush administration’s entry into the Iraq war, American news outlets admitted to dropping the ball. Mainstream media acknowledged they did too little to question the purported evidence of weapons of mass destruction in Iraq, whereas challenges to the Bush administration’s assertion that Iraq and the 9/11 tragedy were linked aired only belatedly. Over a decade later, the U.S. media has again dropped the ball. This time, though, the actors are different: Ukraine vs. Russia.

To hear mainstream U.S. media tell it, one could be forgiven for the belief that any and all claims of a Neo Nazi presence in Ukraine are propagandist fragments of Russian President Vladimir Putin’s imagination. The tragic shoot-down of Malaysian flight MH 17 — on the anniversary of World War I — has only added to the pressure that the West intervene. Still, media fails to recognize its role in perpetuating conflict.

Shortly before the U.S. began trotting out the interim Ukrainian prime minister following the overthrow of Ukraine’s democratically elected president earlier this year, The Guardian published profiles of Ukrainian parliament members. Putin, it turns out, was not lying. Historically, elements within the region sympathized with fascist Germany and some fought on Hitler’s side during World War II, prompting animosities that exist to this day.

Why does this matter? Because failure to appreciate our present — and to grasp our past — may doom us to repeat history.

In an apparent effort to turn down the heat, journalist and Morgan State University School of Global Journalism and Communication dean, DeWayne Wickham, argues in a March USA Today piece that U.S. hegemony in the creation of Panama and Russia’s hegemony with respect to Ukraine are not terribly different.

Judging from the response the piece drew, Wickham’s point was lost on many readers. Accusations mounted: Wickham had attempted to excuse Putin’s audacity in Crimea. Wickham had cited an passé example, irrelevant because the creation of Panama took place over 100 years ago.

It’s all too easy to dismiss the events of the past — or, conversely, latch onto the tragedy of the moment (flight MH 17) — to justify an existing conclusion. But this time getting the facts right matters because the wrong response may very well provoke another Great War.

Wickham concludes that neither the U.S. or Russia has the moral high ground within a historic context. So what’s the point in comparing U.S. and Russian hegemony if it is not for the purpose of excusing anyone? Perhaps this: As Americans better appreciate our role in history, it becomes apparent that escalating international tensions often travel a well-worn path. If keeping history alive to tell the tale of hubris past gives pause to the drums of war, so be it. The alternative is to take two, three, four, even five geopolitical wrongs and to make-believe might makes right.

Haven’t we been down this road before?

 

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The Washington Post asks, “Was it ‘crazy’ for this scientist to re-create a bird flu virus that killed 50 million people?

Let me cut to the chase.

Yes.

Just about anyone paying heed the past five to 10 years might have noticed a near-constant drumbeat on the possibility of pandemic: SARS, bird flu, swine flu — the so-called Zombie Apocalypse, courtesy of the Centers for Disease Control! Inundated by pandemic warnings, one could be forgiven for wondering what the powers that be know that we apparently do not. If Mother Nature won’t cull the herd fast enough might a self-fulfilling prophecy of the pandemic kind do?

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