Wednesday, August 03, 2005
Academic Salaries and House Prices
I honestly don’t think it’s the college. As community colleges go, this is a damn good one – generally well-run, beautiful campus, pretty area, etc. While the culture can be a bit staid, it’s really a great place to work, and most of the people are both sane and friendly. (Exceptions exist, obviously, but we try not to put them on the search committees.)
The culprit, I think, is the runup in house prices. Prices here have doubled or more in the last five years, while salaries have crept up 3-4% annually. The house-buying-power of a salary here has plummeted precipitously. With the annual increase in houses running at 15% or so, it doesn’t take long for academics to be priced out of the market.
Yesterday I ran into someone at lunch who works in one of the campus offices. She has one of those 35-40k office jobs that form the backbone of the economy. She and her husband, who has a similar job elsewhere, still live with her parents, because they can’t afford a place of their own within a reasonable commute. They’re college grads with full-time jobs and without children, and they live with her parents. They can’t even save, really, since the runup in prices is faster than their savings accumulates. They’re starting to look at jobs in flyover country, just so they can live like adults. She doesn't want to leave the area, since she has so much family here, but she doesn't really see a choice.
I’ve noticed that many of the more recent hires here (myself included) live out of county, tolerating longer-than-normal commutes, because we can’t afford to live closer. We're economic expats. The surrounding counties are also quite pricey and climbing fast, though, so if you didn’t buy at least three years ago, you’re SOL.
By our local affordable housing guidelines, a new tenure-track instructor with relatively little experience would be eligible for subsidized housing. Stay in school, kids!
What’s frustrating about it, besides the obvious, is that the longtime faculty here talk about the runup in house prices as an unalloyed Good Thing. They bought back in the 1970’s, so their mortgages are paid at this point, and the runup represents pure, painless gain for them. They haven’t connected the dots: higher house prices means fewer community college students. Our demographic is moving farther and farther away. And we’re having trouble hiring people, even in this employer’s market, because what we pay just doesn’t match what it costs now to live here.
I don’t have a clue how to solve this one. It would be lovely if our salaries kept pace with the housing market, but 15% annual raises are about as likely in this political climate as pigs growing wings.
Weirdly, this hasn’t affected our ability to attract adjuncts. As near as I can tell, this is because adjuncts are either married to wealthy people (we have an astonishing number of those), or willing to live like church mice. Some bought back in the 1970’s or 1980’s, so they’re pretty much immune.
Presidents sometimes get housing allowances, but I don’t see that happening for faculty, staff, or administration lower than President. The cost would be prohibitive, and the precedent would prove toxic over time. We’re not about to build faculty housing – we don’t even have student dorms – so I really don’t know what to do about this.
Any ideas out there?
Some folks think that the money that went into the stock market in the late 90's is going into the housing market now. Could be, I guess. Still, where the bleep is all this money coming from? Who is buying three-bedroom houses for 550k?
I just don't get it.
Sorry I'm going on. One solution that helped us was that the college offered a mortgage program that gave us a discount on the interest rate which significantly decrease both the total cost over time but also the monthly payments. Other options might be assistance with the buying process itself, helping people find decent affordable houses.
Steve -- no, The Administration doesn't prefer going all-adjunct. The Administration is flat broke.
We don't get kickbacks for adjuncting-out. We don't get performance bonuses. We don't take some weird personal satisfaction in hollowing out the institutions in which we chose to make our careers. We just have to work within the resources we have.
Give me the resources, and I'll happily hire a whole new cohort, at generous salaries. (In private industry, empire-building is routinely assumed to be a managerial motivator. Academe is the only industry I know in which empire-dismantling is assumed to be a motive.) I just don't have the resources.
Pick the right villain, guys.
Are they right? At some point, it stops going up - there aren't enough 2-dentist families to buy them, and the mid-level feds and teachers who once bought here are priced out. And when it stops going up, then there is a lot of pressure to go down, because people can't buy in the expectation of profits. If it goes down, there could be a lot of blood on the floor, as little guys with ARMs and not enough income to make up for their shortfall go down. If things just level off for a while, while incomes slowly rise, maybe less dramatic.
But I've also lived in Europe, and seen things go stably for years with house prices relative to income at levels we had never dreamed of in the US.
If I were starting out, I think I'd be opting out of your faculty searches and looking for a job in Chillocothe or Biloxi.
There's a book out by an economist at Dartmouth -- Fischel, I think -- called "The Homevoter Hypothesis." He argues that locally-determined property taxes wind up generating more revenue than state taxes do, because people make the connection between good schools, property values, and property taxes when the money is spent locally, but they don't buy the connection when it runs through the state. What that means is that a certain amount of arbitrary inequity is an unavoidable cost of maintaining a school system at a viable level. I don't know if he's right, but I haven't found the flaw yet, either. Very frustrating.
Lindsay Rosenwald http://www.lindsayrosenwald.info/ Dr. Lindsay Rosenwald is one of the re-known venture capitalists and the hedge fund managers in the world.