Friday, January 29, 2016

Are Renters Being Screwed in El Paso County?

Are Renters Being Screwed in El Paso County?
by Raymundo Eli Rojas

Editors Note: Is been a while since I've posted. I mostly served the last few years as editor to various writers who have submitted good articles. Hopefully, I can keep some posts coming.

Although I tend to take The Atlantic articles with a grain, and sometimes brick of salt. I did notice this article on why rent was rising in places where it’s cheaper to own. In Kriston Capps' article, she explains this.

I thought about El Paso, as most of the big push to bring richer, more hipster, younger people to Downtown El Paso, involves making a lot of people richer.

The idea to revitalize downtown involves making downtown into a landlord’s heaven of high rents.

In an interview with The El Paso Inc some years ago, Gilbert Guillen explained why it was more affordable to live outside of downtown where rents would be cheaper, you’d have a front yard and back yard, a garage, and parking, all more much cheaper than living Downtown. Furthermore, you still be within 10 minutes to 30 minutes from Downtown. (1)
Using numbers from the U.S. Census, the article on City Lab shows El Paso County’s gross rent as $700 to $850 from 2010 to 2014.

The next map shows an increase in Real Medium Monthly Gross Rent from the periods 2005-2009 to the period 2010-2014. Doña Ana County recorded no change, yet El Paso increased.

The next map shows how in El Paso County, the home ownership rate in the years from 2010-14, was less than 55.0. In Dona Ana County, the rate was actually higher: 55.0 to 63.9.

The next map shows the change in home ownership rate from the 2005-2009 years to the 2010-2014 years. El Paso County saw a decrease in home ownership rate while Dona Ana County saw no change.

The article says with exception of some cities, “More renters should be buying homes.”
The next map shows that in El Paso County, the Median Selected Monthly Owner Costs with a Mortgage from  2010 to 2014 was less than $1000. The same was found for Dona Ana County.

The next map shows the Change in Real Median Selected Monthly Owner Costs with a Mortgage year 2005-2009 to 2010-24. Both El Paso County and Dona Ana County measured no change.

The article ends attributing some of this to student debt: “Not necessarily bad credit, but less competitive credit.”

“Institutional investors and all-cash buyers, meanwhile, put homes out of reach for normal buyers who need loans to purchase. These factors are keeping renters (mostly Millennials) out of the post-crisis, first-time-homebuyer market.”

“In the end, it’s a portrait of inequality: If renters wanted to buy a home, they should have gotten rich before now. So long as investors can beat first-time home-buyers to the punch with larger down payments and cash offers, renters are going to stay renting. Even the people who can afford a mortgage”

Note 1: 

Q: Wasn't the idea that the people who have been living Downtown in Segundo Barrio were largely poor, but what people talked about was attracting professionals, Downtown workers, students and artists - a more diverse group living where we haven't had people living, such as former department stores and lofts?
That was a grand idea, but it doesn't work in El Paso. We already have artists living down here. We already have lofts and professionals living Downtown. In other cities, lofts work because of supply and demand. You simply don't want to be in New York and have to commute two hours from the suburbs to come to work. You'd rather live downtown and you'll take whatever you can get and you have to pay the going rate.
In El Paso, lofts are not economically sound. For example, the Popular annex was turned into apartments that they touted as lofts, the Union Annex Project. But those are going for $900 a month for a single, $1,200 a month for a double. In El Paso, nobody with good business sense - emphasize good business sense - is going to do that.
You can go to the Westside and buy a cardboard house for $865 a month with three bedrooms and a two-car garage - and it's your property.
The Loft that the Karam brothers have: the mom lives in one, the brother lives in the other and the other brother lives in the other one and that's it.

"Gilbert Guillen: Watching over Union Plaza," El Paso Inc., October 17, 2011.