Nothing but Palaces 3
What happened to all the cheap city flophouses
The previous article in this series pointed out that, despite
demagoguery from the media and some politicians, the shortage of
housing
supply is not due to rich foreigners buying more houses than they
need. That's because
these billionaires buy places that are simply out of reach for ordinary
folk; you aren't going to be buying a $100m penthouse no matter how
many foreign billionaires there are or aren't.
We also noted that when low-income foreigners enter
American in large numbers, they increase demand for housing. This
certainly does increase demand for regular housing, and in the short
term might be expected to raise prices - but normally, some sharp
person would note an opportunity and provide
housing to meet the demand. That simply is not happening.
This
article explores a primary reason for this "market failure."
The New York Post brings us a report that is either amusing or
appalling - or possibly both:
A Lower East Side condo owner turned his small apartment into a mini-village — by converting it into an illegal duplex with 11 sub-units that had ceilings as low as 4 ¹/₂ feet high, officials said Friday.The illegal micro apartments at 165 Henry Street are so cramped that condo owner Xue Ping Ni even put up bubble wrap as protection to keep residents from hitting their heads on the many low-hanging pipes.
The accompanying photo looks like something out of a superhero
movie: a man, kneeling, just barely clears the top of a door, which in
turn is just shy of the ceiling. He looks like he's in a
dollhouse.
Yet the tenants weren't happy at being rescued from this dire
situation:
instead, they seemed to regret being turfed out when the apartment
complex was condemned by the health and building departments.
So far in this series, we've been exploring explanations for why
housing prices have been increasing for decades, far faster than wages
- none of which have been particularly satisfactory. Here we see
someone's ad-hoc solution to the housing problem: cram 11 people into a
space made for one!
Now, your humble correspondent, being prone to claustrophobia, would
feel extremely ill at ease in such a residence. And, as the city
building department inspectors rightly pointed out, what would happen
in the event of a fire is the stuff of nightmares.
And yet...
One departing tenant who didn’t want to be named told The Post Friday night that he and the others had just been ordered to vacate their tiny units in No. 701.He said the landlord — whom he would not name — had charged him $600 a month for his cramped space, where he’d lived for the past two months.“It was revolving door of people,” said a woman who pays $2,800 per month for her one bedroom apartment on the sixth floor. She has long suspected the building was dangerous. [emphasis added]
Let's think this through. Here we see a lady who paid, and
apparently continues to pay, $2,800 monthly rent for an apartment in a
building that she "long suspected was dangerous" - and with good
reason, as the grossly overcrowded and overbuilt dollhouse apartments
can't help but be firetraps.
On the other hand, we have the newly-evicted folks who were paying
a far more affordable $600/month for a hole in the wall. You
wouldn't want to live there and neither would I. But nobody
forced them to; they clearly
felt they were getting good value for
their money.
In other words, they were better and
safer homes than the alternative.
If you are living in New York City and working as a dishwasher, what
are you supposed to do? Your work is so menial that it isn't
worth any more than minimum wage. Yet the housing prices are so
outlandish that there's no possible way you could afford a "legal"
apartment.
You could sleep in the street - and many do - but that's dangerous
everywhere, and particularly so in places like New York City thanks to
adverse weather conditions. California is suffering from
overwhelming mobs of homeless, partly because it has no harsh winter to
annually thin the herd.
Even the $2,800 lady, obviously far better paid than any dishwasher,
felt that staying put was her best option despite knowing that her
building was a firetrap. Anything else safer would presumably
have been even more expensive, and thus out of her reach.
But in this odd tale of unauthorized construction, we start to see
glimmers of an explanation for our housing shortage.
Whither the Flophouse?
We've noted that, while America has always had poor people and often
had bums, mass homelessness is a relatively recent phenomenon.
What happened to the equivalent derelicts a century ago - did they just
up and die?
Well, a lot of them surely did. But also, back then every city
offered facilities that few if any do today: the flophouse, or lowest
class of boardinghouse.
Back then, if you owned a home, you had every right to rent rooms in
it out to other people. Widows were particularly common in this
profession: a successful husband buys his family a nice home, then dies
without adequate life insurance. Rather than sell out and move,
the
widow often decided to turn her asset into a business adequate to keep
her
family fed.
Of course, some did this better than others, and neighborhoods go up
and down. Once a city had been around awhile, it usually had a
district that was populated with mansions built years ago, but
now those
tattered edifices were occupied by the poor. As each building
continued to degrade due to lack of maintenance, the rent for a room -
or even just a bed - got cheaper and cheaper until eventually even
drunken derelicts could afford a place for the night.
Naturally, these roach motels were dens of filth and disease, but
back then filth and disease were the expected companions of the
poor. Even as late as the Great Depression, ordinary folks fallen
on hard times eked out a living by
creating a boardinghouse in their
home as best they could.
But with postwar modernization, governmental authorities felt that
everyone deserved a proper home, and with wealth filling the country
coast to coast, why couldn't they have one? Mass-built suburbs
like the famous Levittown were thrown up everywhere, while
decaying
inner-city flophouses were torn down and replaced by modern high-rise
projects and other infrastructure.
For example, Robert Moses built highways and bridges all across New
York City, at the cost of "the wholesale destruction of thousands of
homes." Homes can be rebuilt; however, when you take out an
entire swath of neighborhoods, it's far harder to build a replacement
living neighborhood in its place, and Mr. Moses wasn't interested
in that sort of building anyway. Legend has it that he tried to make overpasses over his highways low enough to
make bus
traffic impossible. This, he felt, ensured that the wrong sorts
of people would not be able to intrude on his middle-class paradises.
As we now know, urban renewal worked great for the middle class who
take care
of their homes. It didn't work at all for the poor who don't, and
were now housed in wrecks just as filthy as the ones they were in
before, but which had become much more expensive due to inadequate
supply.
Meanwhile, the officious building inspectors make sure nobody dares
enjoy the liberty their grandparents did, of renting out a room.
Even slick modern room-rental arrangements like AirBNB are under
massive attack by regulators in cities who'd prefer
tourists to have
to pay the overinflated and overtaxed hotel rates while ordinary
renters are regulated by rent control.
We've found one answer to why there's nowhere for poor people to
live: Our city governments, in their all-knowing wisdom, tore down all
the places cheap and ratty enough for them to afford! The result?
During its heyday, between 25,000 and 75,000 men slept on the Bowery each night. Today, gentrification has transformed the 16 blocks that make up the Bowery, just like it’s remade much of New York City. All that remains of the old Bowery are a mission, a single liquor store, and seven “lodging houses,” which are home to less than 1,000 men.
The Bowery houses between 24,000 and 74,000 fewer poor men than in
times past. Where have they gone? Obviously - the streets
and alleys or to California, where else?
In spite of the
attractiveness of this explanation, the great days of slum clearance
ended a good while ago, so
this isn't a full explanation for the recent surge in
homelessness. It also doesn't explain why other
cheap residences haven't taken their place.
We'll keep digging in the next article in this series.
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