Sunday, May 21, 2017

 

Housing, Part II


Last week I did a post, inspired by Richard Florida’s work, detailing why property taxes tend to be the most loathed, and therefore politically vulnerable, form of tax.  Continuing on the theme of housing, this one is a response to the Chronicle piece about faculty not being able to afford to live in some expensive areas.  

In Monmouth County, I see it.  Northern New Jersey isn’t Manhattan, but it isn’t Kansas, either.  It’s one of the most expensive areas of the country.  Combine an overall high cost with extreme income polarization, and folks on the lower end of the salary scale face some difficult choices.  Getting a full-time faculty job is hard enough, at least in the liberal arts.  To actually get one and then discover that you can’t afford to live in the area just adds insult to injury.

I’ve seen the mismatch between local housing prices and academic salaries before.  When I worked in Morris County, many faculty and staff managed the pay/cost mismatch by living in Pennsylvania.  Eventually the state passed an in-state residency requirement to stop that, though it didn’t increase salaries accordingly.  It effectively mandated a lower standard of living, though, of course, it grandfathered those already in the system.  In Massachusetts the union contracts were statewide.  Boston-area faculty supported a higher teaching load to support a higher salary; in the western part of the state, where I was, faculty never stopped complaining about “the fifth course.”  (By the time I left, the “fifth course” was fourteen years old, yet I still heard about it every single week.)  I’d bet that the key variable was the difference in housing cost between Boston and Springfield.  

Part of the issue with housing costs is that they’re most salient relatively early in a career, when salaries tend to be lower.  For academics, the family-formation years are usually the thirties.  If you’re trying to find a place in a school district you’d feel good about sending your own children, and you’re making an assistant professor salary, you’re probably going to struggle.  The ones who make it work typically have partners who make far more than they do.  If you buy a house in your early thirties, then get tenure and stay, the monthly payment gets progressively smaller for a long time as a percentage of income.  That’s what thirty years of raises in pay, combined with a flat monthly total of principal and interest, will do.  But if you’re starting out now, buying those homes from the generation that bought them cheap is a different matter.  That’s especially true if you’re also carrying substantial student loan debt.

In this, as in so many economic issues, the key divide is between people with school-age kids (or nearly school-age) and everyone else.  If you can afford to be indifferent to school districts, your options open up.  If you can’t, it’s tough and getting tougher.  

Some universities handle the mismatch by supplying some faculty housing.  I’ve never heard of a community college doing that; most don’t even house students, let alone faculty.  In low-cost areas, that’s probably fine; extra supply would be redundant.  In high-cost areas, though, I’ve seen the recruitment and retention challenge posed by salaries that don’t align with what it costs to live there.  

Conceptually, the answer is easy: just pay people more.  But that raises some obvious issues of its own.  Most basically, where does the money come from?  When state and county appropriations are flat, and health insurance rates are climbing quickly, there’s no easy and politically palatable way to do that.

In practice, I’ve seen people adopt several different strategies.  One is to teach lots of overload classes for extra pay.  That’s straightforward enough, though it raises the real possibility of burnout.  (It also makes the college vulnerable if someone gets sick.  Replacing someone teaching five classes is hard enough; replacing someone teaching seven is that much harder.)  Some have side businesses, though that tends to vary by discipline.  Some marry well.  And some leave for other places or lines of work after a few years.  

It’s not an easy one to solve.  I’ll admit not being a fan of coercive measures, like residency requirements; in practice, they tend to double down on intergenerational imbalance.  If school districts everywhere were terrific, that would certainly help, but it would probably require political changes far beyond what a college can do.  Help with down payments or low-interest loans would be something, but they both strike me as falling well short of the magnitude of the problem.

Wise and worldly readers, is there a better way?  Given the geographic spread of community colleges, some of them will be in expensive places.  Is there a better way to handle that?

Comments:
I can only read the lead sentence of that Chronicle without going through a campus portal, but just seeing "Bay Area" was enough. I can't imagine how college teachers can afford to live there, or in the LA area. Those house flipping shows look like an alternate universe to us. A house like ours costs three times as much our there, and they also have to drive forever in awful traffic to get to work each day.

(Why tech companies outsource to India rather than affordable college towns like ours is difficult for me to comprehend. Half of a Bay Area salary would look like a 50% raise where I live.)

Anyway, you have just described why national salary comparisons are pointless. At minimum they should be normed to the median price of a certain sized home.

No, there is no solution. It is probably the case that your starting salary is higher than ours, but either one is going to be inadequate to buy a house in the most desirable school zone in our respective areas. University faculty salaries price us out of those areas. Our junior faculty teach as many classes in the summer as possible, plus the max regular semester overload, to deal with loans and housing and kids. That is their solution. We can't even give a cost of living raise, let alone increase starting salaries, with our state budget and a tuition freeze.

BTW, an unusual side effect of this problem is that summer adjunct work has gone essentially to zero as older faculty retired and were replaced with young ones. Summer pay isn't very much (ours is higher than adjunct but not even close to pro rata on our regular pay at the prof level) so the people getting close to retirement didn't have much to gain. The young faculty max out in the summer.
 
If I had a bunch of money to throw at this, I'd probably look at "silent second" loans to subsidize housing prices. (These are generally structured as loans that don't have monthly payments and are forgiven if the buyer stays in the house a certain length of time, and that are otherwise repayable upon sale.)

I'm in a very similar boat as a high school teacher in an area with a lot of tech workers. I'm being priced out of even vaguely acceptable houses on my salary, even with substantial help from my parents. I'm considering moving to another state where houses are cheaper, since (unlike at the college level) there are generally openings for experienced high school math teachers in most parts of the country. With a little research I could probably find someplace where they pay teachers enough for them to buy houses if I go rural enough. (In the extremely rural parts of Alaska they provide teacher housing as part of the job, but that's a different thing entirely...)
 
Even university faculty have difficulty in expensive housing areas (I live in Santa Cruz, which is one of the top 5 "least affordable" communities in the US based on median housing price vs. median income). The median listing right now is over $1million and $680/sq ft. Median home value is around $800,000 (and that's for a small 3-bedroom on a small lot).

The rental market is also very expensive and very tight here, partly from rapid growth in number of students, partly from (illegal) conversions to short-term vacation rentals.

UCSC has built some faculty housing on campus (some rental, some purchase---but the land is only leased) which is a drop in the bucket. I have no idea how the local community college faculty are managing. I suspect a lot of shared homes and commuting from rural areas—living like students.
 
I work in the San Mateo County Community College district (between San Francisco and San Jose) and the district has built faculty/staff housing at 2 of the campuses and is working on units at the 3rd. They are below market rentals that folks can stay in for a number of years to help save for a house. The units are in great demand.

Dean Dad - if you read this, you now know of a community college that offers housing for faculty.
 
Exactly the same problems arise in England. Part of the reason is the big increase in population, and therefore in demand for housing.

Don Cox
 
Conceptually, the answer is easy: just pay people more

The bigger problem here is that the housing market in general is broken in many places, for reasons that Matt Yglesias describes in The Rent is Too Damn High and that I describe here. Unless and until we get substantial zoning reform, these problems are going to continue.

Colleges can try to attack the cost part of the equation, but when every other employer is doing the same thing we see the property and rent lines rise. We really have to attack the supply part of the equation.
 
Not just there. Here in Ontario the neocon premier Mike Harris wanted to equalize teacher salaries across the entire province. Would have been great for teachers in North Bay (his riding), not so hot for those in Toronto. (Price differential for housing is a factor of ten between most and least expensive parts of the province.)

That hasn't been an issue for the last decade, but I suspect it will become one again after the next election. (The Conservatives are very good at pitting rural against Toronto.)
 
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