Only 32 percent of California households could afford to purchase the $496,620 median-priced Golden State home in the first quarter of 2017, according to a report issued Monday by the Los Angeles-based California Association of Realtors.
A recent count found a dramatic 104% increase in “tents and hand-built structures” located downtown, for a total of 418, compared to 2016. Driving through East Village, a gentrifying neighborhood on the edge of downtown, it’s tough to find a street that doesn’t have a tarp or tent – or dozens. People with neither tent nor tarp fashion makeshift shelters out of shopping carts, storage bins and blankets.
Southern California worker bees are seeing some of the nicest increases in wages since the recession ended. But employers must somehow pay for higher labor expenses, and it appears bosses are opting to raise local prices. Look at April’s consumer price index for the five-county region. Year-over-year, the cost-of-living was up 2.7 percent, the third consecutive month at this level. The last time local inflation was this strong was 2011.
In a July 2015 report, the Federal Reserve Bank of New York observed a direct correlation between student borrowing and tuition levels, noting that "higher tuition costs raise loan demand, but loan supply . . . [relaxes] students' funding constraints." The Fed spoke of a "pass-through effect on tuition," whereby for every dollar received in subsidized federal loans, tuition rises 65 cents. They report similar findings for Pell Grants (55 cents) and unsubsidized loans (30 cents). As the Fed study indicates, student debt isn't rising simply because college is too expensive. Rather, school is too expensive because of rising student loans and grants. Research by economist Richard Vedder, director of the Center for College Affordability and Productivity, bolsters this argument. He found that "when someone other than the user is paying the bills, those bills tend to explode since the buyer is not sensitive to price." In other words, the expansion of student loans and other third-party payments for college leads to higher prices by insulating students from the actual cost of tuition. This vicious cycle leaves many low-income students (who are supposed to benefit the most from financial aid) priced out of attending college.
Sure, for the fortunate few, they might have to miss a couple of coffees a week, but this reality only applies to the outliers in California. A tech worker in San Francisco won’t worry about a gas tax when their commute consists of a 20-minute walk or using their taxpayer-subsidized Tesla to make the drive into work. Opposition to a gas tax increase becomes rare when you can afford to live close to work or purchase a new, fuel efficient vehicle.
I, however, come from a community with a very different point of view. Before the vote on the gas tax increase, I spoke with dozens of people from my district to really understand how this would impact their daily lives. Juan Robles, husband and father, drives 200 miles a day selling rocks from a quarry. He’s not sure his company will be able to stay in California because of increased taxes. This doesn’t seem like just a $10 cost for Juan.