Friday, July 28, 2006

Does Boston Need a Middle Class

What of the middle class in Boston? If we follow the local and nationwide trends, we could well have a tiny portion of middle-income families, individuals and neighborhoods. The middle-income folk would go to the suburbs and exurbs, leaving rich and poor.

For the benefit of all three major economic groups, we should care, both in individual terms and as public policy and legislative agenda. As Bostonians, we need be aware of what's at stake from a city of only extremes.

In this era, we may lose sight of such cascading effects. After all, from realty to petro products to medical care to food, real or quasi monopolies, oligopolies and informal cartels control prices of what we buy. Yet, we hear from government and TV that market forces are offering us choice and keeping profits to a minimum while providing profit incentive.

We cannot afford to accept the fantasies of the laissez-faire conservatives.

In such a world, it would seem reasonable that the small subset of the wealthy and wealthiest could push out the middle-income from their neighborhoods and pay much more for housing suddenly carrying a LUXURY sign. Indeed, these very interlopers are quick to say that they pay more per capital in tax and shopping dollars, while lessening the loads on schools -- fewer people and fewer kids, kids who go to private school after all.

That doesn't sound like it has any downside, but the Brookings Institute studies see it otherwise -- as does this mildly opinionated commentator, as does the Boston Banner. Development that prices the middle class out of Boston has bad effects for top and bottom, as well as for the local culture in every sense.

It is understandable that the wealthiest families moving into the newest version of Boston would not want to jostle, see or smell hoi polloi. That is as understandable as their having their attorneys and legislators fighting estate taxes and seeking yet more tax breaks -- mine, mine, mine, mine -- before passing along their wealth to their kids. They are doing the human thing in protecting their own.

Yet, in the current trend, we see middle-income workers and families finding themselves priced out of their old neighborhoods. Their incomes are no longer adequate to live in the central fist and arm that is the city of Boston.

Thus, they find affordable suburbs and commute to the city for their jobs as knowledge workers, managers, firefighters and so forth. In fact, Brookings suggests that they may end up better off in terms of quality of life, including crime rates, schools and so forth. Only the commuting parent or parents lose that time to and from work.

Instead it is the poor who suffer directly when middle-class neighborhoods disappear. The traditional role of those neighborhoods was to enable that stereotypical American dream that so many millions of us have made real.

Consider a city in which the poor are within reach, if they work hard, study hard and maybe are a bit lucky, of upward mobility. They can get the diplomas and the jobs, and move to the middle-class areas. Even if the monthly rent or mortgage is a bit of a stretch, they end up realizing improvements for themselves and their offspring -- cleaner, quieter, safer neighborhoods with an upward spiral of economic and social possibilities. It has happened many times here and elsewhere.

In contrast, if the middle-incomers leave town, we can head to a rich/poor only Boston. Without that buffer for aspirations, the poor stand a much higher chance of staying poor. The diminished hopes and dreams breed the despair from which the stagnation of an entire class of citizens festers.

The notorious ghetto tax that the Banner details exacerbates the problems. When the captive poor spend disproportionate shares of their small income of necessities, the spiral screws ever downward.

Ironically for the wealthy, their domination of the housing and employment markets can backfire. A city without the broad base of economic classes lends itself both to crime and to competition for civic resources. The mired poor require more, and more diverse, services, further taxing the city and taking resources from the activities and infrastructure that the wealthy want.

In the end, this slowly leads to a less desirable, less fun, less Boston-ish Boston.

A future post considers what our politicians, planners and others suggest to avoid or shortcut this cycle.

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Anonymous said...

I love living in the South End, close to work and fun, but like many of my peers (low 20's) we are living beyond our means paying upwards of 50-60% of our salaries on rent. If the building I live in were for sale it would be in the millions, and accross the street we have the Villa government subsidized housing. It is true that we are a city of super rich and poor, with a very small struggling middleclass. I wish I had the solution!

massmarrier said...

That old rule of a quarter of your gross income to rent doesn't mean much in today's Boston, does it? I am pretty sure that the high-end house and condo buyers can't relate at all to people who wonder how much longer they can afford just the essentials of living.

Anonymous said...

"We cannot afford to accept the fantasies of the laissez-faire conservatives." Actually, it is exactly in the "laissez-faire conservative" parts of the country where the middle class is indeed thriving. This laissez-faire attitude generally results much more housing development and business opportunities. Where do you think the middle class is doing better...Dallas or SF?...Boston or Releigh...NYC or Indianapolis? Here is a hint:

Avon, IN home listing

Waltham, MA home listing

Sadly, it is the most liberal cities and states, that are pushing out the middle class. They create "affordable housing" units that make overall development much more expensive and results in only subsidized units and luxury units...nothing in the middle. In addition, their tax and business policies combined with this cost of living push middle class jobs such as manufacturing, call centers, etc. to the more "laissez-faire conservative" parts of the country, while the lawyers and bankers can afford to stay here. I have lived in Boston for over 5 years, and would love to stay, but I'm getting ready to move to a red state where all the middle class citizens fleeing SF, Boston, and NYC end up. My middle-class family in friends in red states are doing just fine, you would be surprised how well you can live when a mortgage payment on a brand new 2500sq foot home is $650 a month. I hope the liberal cities in the U.S. can figure out a way to welcome back the middle class...I would love to return.

massmarrier said...

Well, Anon, you are indeed mixing your metaphors as well as your economics. Blaming liberalism and rampant affordable housing building for the high prices of dwelling is absurdly simplistic and wrong. We really can't compare the cost of housing without the economics of the region, state and area. To be equally absurd, we could pick some third-world area where a similar house is $25,000. That also proves nothing, not even if the government of that country is a right-wing dictatorship.

Boston's high-tech boom was the last major one in the nation to deflate and this area is slowest in recovering. Meanwhile, public policy at national and state levels actively discourage and even prevent affordable middle-income housing. It's public policy -- plus this pretense that markets are truly free and truly seek fair value.