A new report from Adobo shows that, one, 41 percent of Seattle millennials spend more than 30 precent of their income on rent (this means they are rent-burdened); and, two, the older a group is, the more it spends on rent. For Gen Xers, 44.4 percent spend over 30 percent of their income on rent; for baby boomers, it is a stunning 49.3 percent. (Adobo's findings came from U.S. Census Bureau's data of the 100 most populous metropolitan statistical areas.)
But here is the the other side: According to The Seattle Times' Gene Balk, homeownership rates in the Seattle area for people under 35 have stagnated for the past 10 years, while it's falling for those between 35-54, and rising for those who are 55 and over.
What this pattern reveals is that homeownership for millennials is destined to decline. The reason why this is very bad news for them is because we live in an economy that is increasing the debt burden (school loans, consumer loans) on the young, making them pay more for rent and pricing them out of the only financial asset available to the middle class: a home.
For about 50 years, wages have been stagnant or falling in the US, and so middle-class baby boomers and very lucky Gen Xers used the voodoo of rising home values to make ends meet in the real world. Now these homes are becoming too expensive for many middle-class millennials. And the news keeps getting worse and worse for them. For example, The Seattle Times reports, "Three years ago, the Seattle metro area had 16 of these [million doallar] ZIP codes — now, it has 38." (Indeed, two million-dollar homes have suddenly appeared on my street in Columbia City!)
The short-term solution to this problem will only be found in direct government intervention (the forms of which are described in a series I wrote with Cary Moon). The long-term solution is, of course, a massive reorganization of the housing market (think of the 1930s and the New Deal). But such a re-organization would demand a change in the whole economy, which, at present, is fueled by speculation (financial assets) rather than entrepreneurial enterprises (production/fixed capital formation). One day, millennials will have to realize that the near-complete absence of economic and social policies relating to fixed-capital formation are obscuring many of the solutions they desperately need.
As for a philosophy/anthropology of the future of housing? It will require a formulation of fixed capital that rejects homo economics and instead resembles what we find in theories on the nature of niche construction. The generational transference of fixed capital—which in the prominent forms of offices, factories, infrastructure, and, of course, housing, has no known value (a fact that is hidden by neo-classical economists)—will have to become public rather private.