Tag: Housing

Confronting aging: How LGBTQ+ seniors can tackle their special caregiving challenges

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Margaret Roesch, 67, and her wife, Pat McAulay, 68, wanted to have a supportive community around them as they grew older. So they helped to create a cohousing development for LGBTQ+ seniors and allies, making it easier to offer support to one another. 

“We said we don’t want to have to go back in the closet when we get older,” Roesch said from the front porch of her home in Durham, North Carolina. 

Opened in 2020, the Village Hearth is a neighborhood of 28 one-story accessible homes for residents ages 55 and up — and one of the few housing developments in the country specifically designed with LGBTQ+ people and allies in mind.  

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“We decided that we were going to be better in community, after having spent eight lonely years in Florida,” McAulay said. “It’s so rewarding to know there’s 30-some people here who have our backs.” 

“I find it very refreshing,” Roesch added.

“We’re all … going to die. People will get sick,” she said. “These things are going to happen, but we also find that we are really good at taking care of each other.”

How to avoid ‘the closet’ while ensuring good care

Older adults in the LGBTQ+ community are twice as likely to be single and four times less likely to have children as their non-LGBTQ+ peers, according to SAGE, a national advocacy organization for LGBTQ+ elders. They may also be estranged from members of their family who don’t accept their sexual orientation and/or gender identity.

“A lot of people in their 70s and 80s who have been closeted, they don’t feel safe and they remain closeted while going through care — that’s a stress,” said certified financial planner Stephanie Lee, founder of East Rock Financial in San Francisco. “You’re trying to get a caregiver, and you’re hiding who you are or hiding your relationship.”

The Village Hearth is a 55-plus cohousing community for LGBTQ+ adults, friends and allies located in Durham, North Carolina.

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Experts say that makes it especially important to have an aging plan early. 

“As with any stage of life, planning is unique and personal to the individual,” said CFP Kyle Young, a senior vice president at Morgan Stanley Wealth Management in New York. “The key is to start a conversation, educate yourself and finalize plans to assure your wishes are made clear.”

Get legal documents to ensure wishes are followed

At Village Hearth, residents have taken steps to prepare their finances, arrange for care and consider end-of-life planning. They have held workshops on choosing financial and health-care powers of attorney, having an advance directive for medical decisions and finding an attorney to help draft those key legal documents. 

When you’re in the hospital or a care facility, “if you’re heterosexual, the spouse automatically gets visiting rights,” Lee said.

That’s not always the case for same-sex couples, even if they’re legally married. In a hospital or care facility, “if a couple has kept their relationship private from others, advance health-care directives and visitation authorization forms are critical to having the patient’s wishes upheld,” Lee said.

“It’s really critical to get the legal papers to get those visiting rights,” she said, “so you can make those decisions.” 

Develop a caregiving plan early

The earlier you start planning, the easier it is to take steps to follow your plan and meet your goals.

“Having the benefit of time on your side will allow you and your loved ones to make sound, clearheaded decisions while considering cost, tax and broader estate implications of your plans,” said Young, who works with many LGBTQ+ clients.

Having the benefit of time on your side will allow you and your loved ones to make sound, clearheaded decisions.

Kyle Young

senior vice president at Morgan Stanley Wealth Management

Use the time between retirement and needing services to identify your support network, consider your financial situation, and educate yourself about care options that are available, recommends Allison O’Shea, founder of Openly Aging, an advisory firm in Durham.

“A lot of people don’t think about that in-between time,” said O’Shea, who works with clients as a so-called aging advisor after running senior living centers for many years. “There’s a really big piece missing when it comes to what you could be doing to prepare.” 

Create a network of support

Build a support group — neighbors, family, friends, loved ones and professionals whom you know you can lean on. 

If you’re single or not sure if you have people around you who are willing and able to step in, O’Shea recommends hiring a geriatric care manager. These professionals, who may also be social workers, nurses, psychologists or gerontologists, deal with elder-care issues regularly. They can be your advocate, make sure you’re able to access resources, and organize the support you’ll need. 

Consider the range of care options available

It is critical to understand what options you can afford and where to find assistance. “Don’t let your finances scare you,” O’Shea said. “You can create a plan that fits around your finances.”

Getting a handle on your monthly income and assets in retirement can help you determine where and how you’ll receive care later on — whether aging in place in your home or downsizing, or moving into some type of senior living arrangement. 

Local senior centers can be a valuable resource for older adults to find community and information, and many are working to serve a more diverse population. FiftyForward, which has seven community centers in central Tennessee to support older Americans, is working to build more inclusive community, conducting research and hosting cultural competency training. 

“Our country is unprepared for the burgeoning older adult group,” said Gretchen Funk, FiftyForward’s chief program officer. Issues of service access and isolation affect seniors overall, but discrimination can exacerbate those challenges for the LGBTQ+ community. 

“As a society, we need to look at this for all of us, because we will all be facing that,” said Funk. “And there should be power in advocating together.”

Some care services may be free based on your income but have long waiting lists. Knowing where to apply and when could help you mitigate costs. 

“If you have a plan or if you’re educated in what the options are, you’re not stressed over these big life decisions when you’re in a … crisis,” O’Shea said. “You have a step-by-step plan already laid out which will only save you time and money.”

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Why young adults in Italy and Ireland have to live with their parents

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In the face of rising inflation and the cost-of-living crisis, Euronews investigates the reasons why young people are struggling to get on the property ladder or afford to pay rent.

Sophie is just one of 350,000 young adults in Ireland between the ages of 20-35 still living in her family home. Like many millennials in Ireland, the 28-year-old marketing executive from Galway is locked out of the housing market.

This problem is not unique to Ireland, according to Eurostat, approximately 67% of people (between 16-29) in Europe live at home with their parents or relatives, but for some, this is not a choice.

The Galway native told Euronews that rising inflation coupled with the cost-of-living crisis is largely to blame: “It’s so frustrating, I have a master’s degree, a good salary and like so many of my friends I’m saving to buy a house.

“But I had to move back in with mum and dad because I was struggling to save money, let alone pay rent, even now it is going to take me forever to save a deposit,” she said.

Affordability is a major issue, as Ciarán Lynch, a former member of the Irish Parliament explained: “House prices have never been so expensive and interest rates are increasingly rising for people coming into the housing market.

“They are almost as close to the figures from two years ago when interest rates were particularly set by the European Central Bank”.

The Mortgage Crux

Considering that house prices on average in Ireland are 94% above those of the EU, Sophie’s dilemma is not surprising.

In order to be eligible for a mortgage in Ireland, first-time buyers are limited to a loan of four times their gross annual income, a prospective mortgage is also capped at 90% of a property’s value.

However, house prices across the country have risen 537% since 1988 and are not in line with today’s earnings.

According to recruitment solutions giant Morgan McKinley, professionals in Ireland take home an average salary of €45,000. However, the Irish Central Statistics Office (CSO) recently revealed that the average Irish house price is now a record-breaking €359,000.

So, for single-income, first-time buyers with a salary of €45,000, the maximum amount they can borrow is €180,000, which is slightly more than half of the average house price.

Ireland vs Italy

House prices and rents vary from one EU Member State to the next, in fact, in some EU countries, house prices have dropped in recent years. Italy, for example, experienced a boom until the financial crash in 2008 and then the cost of property steadily dropped. According to Eurostat, prices were cheaper in 2022 compared to 2010.

While rents have increased in Italy, the differences are marginal compared to Estonia, Lithuania, or Ireland where the average monthly rent stood at €1,733 in December 2022, that’s 126% higher than in 2011.

If the Italian house prices are more attractive to potential buyers, does this translate to higher levels of property ownership among young adults? On the contrary, a higher percentage of young adults live at home with their parents in Italy than in Ireland.

So, what are the drivers behind this trend in both countries?

Ireland’s lack of supply

While median gross salaries in Ireland are considerably higher than in Italy, available homes are also few and far between on the Emerald Isle.

“In 2010, we had 24,000 rental properties advertised on Daft (Ireland’s top property site) on any one day of that year, compare this to recent figures when we had just 700 properties available right across the country,” said Mark Rose, the managing director of Rose Properties.

“So now we have approximately 3% of what was available in 2010, we need thousands of rental properties to be loaded onto the market today, tomorrow or as soon as possible, they are urgently, urgently needed,” Rose added.

Limited properties are increasing demand and are placing a serious strain on rents and potential buyers, as the managing director of Dennehy Auctioneers in Cork told Euronews: “The rental market in Ireland is totally and utterly dysfunctional. We put a house up to rent two weeks ago at 12:55 pm and by 13:20 pm we had 90 emails (enquiries)”.

“We need thousands of apartments in cities to keep up with demand, however, Ireland is a victim of its own success, a lot of people want to come and live and work in this country and are attracted by the lifestyle, but our population is also growing and we can’t keep up,” Dennehy said.

The Central Statistics Office estimated that the population in Ireland increased by 88,800 between April 2021 and April 2022, the largest 12-month population increase since 2008. This is largely due to a 445% surge in migration and according to Dennehy, foreign direct investment is part of this trend: “Ninety per cent of the inquiries I am currently receiving for a new housing development in Carrigaline (a commuter town in Cork) are from non-nationals, and ninety per cent of those again are non-EU”.

“The professionals coming here have good jobs, they are well paid and they love this country”.

But former deputy Lynch who chaired the Committee on Finance, Public Expenditure and Reform in October 2012, said non-nationals with money to burn are also running into problems: “Foreign direct investment is a very, very significant part of the Irish economic model. And job creation has become a problem because it’s not that the jobs aren’t there, but the houses aren’t actually there for the employees when they get those jobs.”

The Italian job

“Property might be cheaper in Italy but the problem lies with the country’s stagnant labour market,” said Mimmo Parisi, a sociology professor from the University of Mississippi.

The senior advisor for European and data science development told Euronews: “Everyone is looking for that dream job in Italy and professionals don’t move around much, once they find a dream position they stay, often for life. As a consequence, there are fewer job openings and it’s difficult for young adults to enter the job market”.

High youth unemployment in Italy is a major factor. According to Italy’s national statistics institute, ISTAT, the unemployment rate (for youths aged 15-24) was 22.9% in January 2023, nearly eight points higher than the EU average of 15.1%, as a consequence young Italians are less financially independent.

“Add dubious work contracts, slow wage growth and low salaries to the mix and it is easy to see why young Italians are stuck at home despite falling house prices. It is also difficult for university graduates to secure relevant short-term work experience when the labour market works in favour of an ageing workforce,” explained Parisi.

According to the Organisation for Economic Cooperation and Development (OECD), Italy is the only European country where wages fell between 1990 and 2020, all the other Member States experienced a rise with Lithuania leading the charge with a 276.3% increase.

“Many students stay in university that bit longer when hunting for that dream job, which as we’ve learned is difficult to come by. This forces young adults to be more reliant on their parents until that happens,” Parisi said.

To add to the plight of youths, an Italian bank will not approve a mortgage without a permanent work contract otherwise known as ‘il contratto a tempo indeterminato’, which creates additional obstacles.

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Why can’t youths in Italy and Ireland afford to move out of home?

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In the second part of our three-part series, Euronews investigates how tourism is proving to be both a blessing and a curse for young people hoping to buy or rent property in Italy and Ireland.

Competing with tourists

Italy’s charming lakes, world-famous gastronomy, climate and heritage attract millions of tourists every year. Some 56 million tourists reportedly visited the Bel Paese in 2022; a figure close to pre-pandemic levels.

While tourism is one of the main drivers behind Europe’s third-largest economy, locals in some of Italy’s most popular cities like Milan, Rome, Venice and Naples are struggling to compete with the year-round flow of tourists for a limited supply of housing.

Airbnb, the online accommodation service that allows property owners to rent their homes or rooms to travellers, was introduced to the country in 2008. According to resident Fabio Scrivanti who works at the Venice Art Factory, it created a living nightmare for locals needing affordable accommodation solutions.

“Venetian landlords discovered that it was more profitable to list their property on Airbnb than rent to everyday people,” he told Euronews.

“It’s controversial because locals can’t afford to pay upwards of say €80 for a room per night — the price someone might pay for an overnight stay in a hotel — if they had to reckon with these prices, that would amount to €2,400 per month, that’s crazy, I certainly couldn’t afford that,” he said.

“I am 29, I have a master’s degree and work in the field I studied at university, I have lots of experience but even still, salaries are not high in Italy. People my age can’t afford rent, never mind a house of their own, lots of my friends are still living at home with their parents, it’s just easier.

“I got lucky with my shared apartment because my landlord gave me my room at a good price but this is rare, I know this isn’t the reality for many people” he explained.

Aside from Airbnb, astronomical rents in some of Italy’s major hubs are also making it more difficult for city residents to afford down payments on mortgages. According to Europe’s largest online rental platform, Housing Everywhere, Milan is one of the most expensive cities in Europe. 

Lucia Pizzimenti (35) an environmental engineer, living and working in Milan, told Euronews: “I am living with my grandmother who has a spare room in her apartment because I don’t want to pay upwards of €800 for a small room here”. 

Lucia has been searching for a property of her own for the last seven years but recently she had to broaden her search to commuter towns or nearby cities in order to find a flat within her budget.

As aspiring renters and homeowners in Italy continue to battle the influx of tourists post-pandemic and soaring accommodation costs, the lack of short-term accommodation solutions in Ireland is discouraging tourists from visiting the Emerald Isle.

The Irish Tourism Industry Confederation (ITIC) says the cost inflation on holiday accommodation is having a negative impact on the tourism sector and that one-third of tourism beds outside of the capital are under government housing contracts, serving as international protection accommodation for refugees and asylum seekers. In County Donegal alone more than 50 per cent of tourism beds are contracted by the Government.

The number of international visitors to Ireland during the first quarter of 2023 was 16 per cent below January-March 2019. As Irish tourism providers struggle to match Ireland’s pre-COVID tourism levels, many companies within the tourism sector fear ongoing price hikes will put Ireland’s long-term reputation at risk.

This affects activity and tour providers across the country who rely heavily on hotels, B&Bs, hostels and Airbnb to house visitors during their stays.

Nowhere to go

Europe’s migration crisis or the strain it places on the lack of available accommodation is now having an effect on refugees and locals alike.

According to the Irish Refugee Council, rapid increases in asylum seekers, specifically Ukrainian refugees, have highlighted the shortcomings of Ireland’s housing policy. So far, some 73,000 Ukrainian refugees have fled to Ireland since the beginning of Russia’s full-scale invasion, and they all need a place to live.

The Irish Red Cross reported that the lack of readily available emergency accommodation solutions in Ireland for Ukrainian refugees had reached a crisis point in July 2022 despite the public’s best efforts. In March 2022, Irish Red Cross Secretary General Liam O’Dwyer confirmed that approximately 23,000 locations had been offered up by the public to be vetted to house Ukrainians. 

While Irish residents were hailed for their generosity, this figure wasn’t enough. As a consequence, some Ukrainian refugees arriving in Ireland had little choice but to sleep on the floor of Dublin Airport, in hotel lobbies and temporary campsites.

The Irish government has promised to find solutions to the housing shortage and support local communities, newcomers and asylum seekers alike but the ITIC says that tourism and the revenue it generates also need to be factored into the equation.

The decade of lost development

According to Mark Rose, the Managing Director of Rose Properties, Ireland’s economic growth and recovery post the 2008 crash was largely thanks to foreign direct investment: “We have recovered well, there is lots of money and lots of jobs in Ireland but there no housing to support everyone that we are attracting in. So, even if we wanted to attract in builders to help relieve the crisis, as many countries do, there would be nowhere for them to live,” he said.

“We had little to no building in this country for nine or ten years because there was no money to build, architects, bricklayers, electricians, builders, they all moved overseas to Australia etc in search of work, and these professionals never returned”.

While Ireland is still one of the least densely-populated countries in Europe, the laws governing planning permission create a lot of red tape for potential builders, as Roy Dennehy, the Head of Dennehy Auctioneers explained: “We’re living in the lag period because in 2006 we had a population of maybe four and a half million, but we were building 90,000 units. 

“That’s between apartments and houses per annum. The population is higher now and we are only building a fraction of what we were” he added.

The CSO found that some 30,000 residential units were built in Ireland last year, a third of the dwellings built across the Irish State in 2006.

Stay tuned for the final article in this three-part series in the coming week.

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Why can’t youths in Italy and Ireland afford to move out of home?

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In this three-part series, Euronews investigates the reasons why young people in Ireland and Italy are struggling to get on the property ladder or afford rent amid the cost-of-living crisis.

Sophie is just one of 350,000 young adults in Ireland between the ages of 20-35 still living in her family home. Like many millennials in Ireland, the 28-year-old marketing executive from Galway is locked out of the housing market.

This problem is not unique to Ireland. According to Eurostat, approximately 67% of people aged 16-29 in Europe live at home with their parents or relatives. But for some, this is not a matter of choice.

Galway native Sophie told Euronews that rising inflation, coupled with the cost-of-living crisis, is largely to blame: “It’s so frustrating, I have a master’s degree, a good salary and like so many of my friends I’m saving to buy a house.

“But I had to move back in with Mum and Dad because I was struggling to save money, let alone pay rent. Even now it is going to take me forever to save a deposit,” she said.

Affordability is a major issue. Two years ago, for example, interest rates, particularly those set by the European Central Bank, were still at record lows.

 “But now we are now seeing situations where quarter upon quarter the ECB is increasing its interests rates by at least half of a base point” Ciarán Lynch, a former member of the Irish Parliament, told Euronews.

The Mortgage Crux

With average house prices in Ireland, 94% higher than those in other EU countries, Sophie’s situation is perhaps not surprising.

In order to be eligible for a mortgage in Ireland, first-time buyers are limited to a loan of four times their gross annual income. A prospective mortgage is also capped at 90 per cent of a property’s value.

However, house prices across the country have risen 537 per cent since 1988 and are not in line with today’s earnings.

According to recruitment solutions giant Morgan McKinley, professionals in Ireland take home an average salary of €45,000. However, the Irish Central Statistics Office (CSO) recently revealed that the average Irish house price is now a record-breaking €359,000.

So, for single-income, first-time buyers with a salary of €45,000, the maximum amount they can borrow is €180,000, which is slightly more than half of the average house price.

Ireland vs Italy

While house prices and rents are generally increasing across the European bloc, in some EU countries property prices have dropped in recent years. Italy, for example, experienced a boom until the financial crash in 2008 and then the cost of property steadily dropped. According to Eurostat, prices were eight per cent cheaper in 2022 compared to 2010.

While rents have increased in Italy, the differences are marginal compared to Estonia, Lithuania, or Ireland where the average monthly rent stood at €1,733 in December 2022, that’s 126% higher than the figures seen in 2011.

If house prices in Italy are more attractive to potential buyers, does this translate to higher levels of property ownership among young Italian adults? On the contrary, a higher percentage of young adults live at home with their parents in Italy than in Ireland.

So, what are the drivers behind this trend in both countries?

Ireland’s lack of supply

While median gross salaries in Ireland are considerably higher than in Italy, available homes are also few and far between on the Emerald Isle.

“In 2010, we had 24,000 rental properties advertised on Daft (Ireland’s top property site) on any one day of that year, compare this to recent figures when we had just 700 properties available right across the country,” said Mark Rose, the managing director of Rose Properties, Cork.

“So now we have approximately 3 per cent of what was available in 2010.  We need thousands of rental properties to be loaded onto the market today, tomorrow or as soon as possible. They are urgently, urgently needed,” Rose added.

The limited availability of properties is increasing demand and placing a serious strain on rents and potential buyers. 

Roy Dennehy, managing director of Dennehy Auctioneers, told Euronews: “The rental market in Ireland is totally and utterly dysfunctional. We put a house up to rent two weeks ago at 12:55 pm and by 13:20 pm we had 90 emails (enquiries).”

“We need thousands of apartments in cities to keep up with demand. However, Ireland is a victim of its own success. A lot of people want to come and live and work in this country and are attracted by the lifestyle, but our population is also growing and we can’t keep up,” Dennehy said.

The Central Statistics Office estimated that the population in Ireland increased by 88,800 persons from April 2021 – April 2022, the largest 12-month population increase since 2008. This is largely due to a 445 per cent surge in migration, and according to Dennehy, foreign direct investment is part of this trend. “Ninety per cent of the inquiries I am currently receiving for a new housing development in the town of Carrigaline, Cork, is from non-nationals, and ninety per cent of those again are non-EU”.

“The professionals coming here have good jobs, they are well paid and they love this country”.

But former deputy  Ciarán Lynch, who chaired the Committee on Finance, Public Expenditure and Reform in October 2012, said non-nationals with money to burn are also running into problems.

 “Foreign direct investment is a very, very significant part of the Irish economic model,” he said.

 “And job creation has become a problem because it’s not that the jobs aren’t there, but the houses aren’t actually there for the employees when they get those jobs.”

The Italian job

“Property might be cheaper in Italy but the problem lies with the country’s stagnant labour market,” said Mimmo Parisi, a sociology professor from the University of Mississippi, who is a senior adviser for European data science development.

Parisi told Euronews: “Everyone is looking for that dream job in Italy and professionals don’t move around much, once they find a dream position they stay, often for life. As a consequence, there are fewer job openings and it’s difficult for young adults to enter the job market”.

High unemployment among youths in Italy is a major factor. According to Italy’s national statistics institute, ISTAT, the unemployment rate for youths (aged 15-24) was 22.9 per cent in January 2023, nearly eight points higher than the EU average of 15.1 per cent.  As a consequence, young Italians are less financially independent.

“Add dubious work contracts, slow wage growth and low salaries to the mix and it is easy to see why young Italians are stuck at home despite falling house prices. It is also difficult for university graduates to secure relevant short-term work experience when the labour market works in the favour of an ageing workforce,” explained Parisi.

According to the Organisation for Economic Cooperation and Development (OECD) Italy is the only European country where wages fell between 1990 and 2020, all the other Member States experienced a rise with Lithuania leading the charge with a 276.3 per cent increase.

“Many students stay in university that bit longer when hunting for that dream job, which as we’ve learned is difficult to come by. This forces young adults to be more reliant on their parents until that happens,” Parisi said.

Banks place another obstacle in the way of young Italians. An Italian bank will not approve a mortgage without a permanent work contract otherwise known as ‘il contract contratto a tempo indeterminato’, which creates additional obstacles.

Stay tuned for the next article in this three-part series in the coming week.

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#youths #Italy #Ireland #afford #move #home

‘We’ve become a renting nation’: Landlords benefit from high house prices, but millions of renters find themselves trapped

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When Nashville, Tenn., native Stephen Parker recently listed a mobile home that he owns on the rental market, he received about 30 applications in one week. “I priced it competitively,” he said.

Parker, who is also a real-estate agent, said that he sees rent growth staying strong as many people find it too expensive to purchase homes, a situation made worse by low inventory and high interest rates.

He bought his first investment property in 2020, and his portfolio of rentals has since grown. He owns various properties, including a small mobile home park, a duplex and several single-family homes. 

“We’ve become a renting nation,” Henry Stimler, an executive in the multifamily capital-markets division at the real-estate firm Newmark, told MarketWatch.

Renters have more flexibility and fewer of the responsibilities that come with home ownership, Stimler said, and they can more easily move to other cities and states. “I don’t think it’s a bad thing,” he said.

Nashville, for its part, was ranked one of the hottest real-estate markets of 2023 by Zillow
Z,
-0.72%.
But with the surge in interest rates and demand, new residents may find buying property in that city expensive.

Stephen Parker, a landlord and real-estate agent from Tennessee, said demand for his rentals has been strong.


Stephen Parker

With homeownership continuing to be out of reach for many, landlords like Parker are poised to benefit. “You may be better off renting, especially if you don’t know if Nashville is where you’re going to be forever,” Parker told MarketWatch. 

Mortgage rates began climbing after the U.S. Federal Reserve began raising interest rates in early 2022. On Wednesday, the Mortgage Bankers Association said the 30-year rate was averaging 6.48%, up from 3.22% in early 2022.

Higher rates have added hundreds of dollars in interest costs to home buyers’ monthly payments. Buyers have subsequently seen the amount they can afford to pay for a house shrink, even as there are fewer homes for sale.

The U.S. economic outlook remains unclear — a situation compounded by the crisis in the banking sector. Many Americans are worried about job security and financial stability and are reluctant to purchase a home, according to Fannie Mae
FNMA,
-1.41%.

Some good news: Rents appear to have stabilized. The government’s analysis of the housing sector shows that rents grew 0.8% in February, pushing the increase over the past year to a 42-year high of 8.8%. However, research from private sources — such as Apartment List — indicates that rent growth has slowed. After five straight months in which rents fell, national rents rose by 0.3% in February, the company said. 

‘I just want roots’

Jennifer Mark, a 49-year-old autotransfusionist in Goshen, Ind., lives in a $625-a-month one-bedroom apartment with her adult daughter and her husband. She’s been selling cupcake toppers on Etsy to bring in extra money.

But thanks to medical bills that are weighing on her credit score, Mark is not yet able to qualify for a Federal Housing Administration-backed loan and can’t purchase a home, although she has a budget of about $150,000.

Finding a two-bedroom to rent would make homeownership an even more distant prospect. The higher monthly rent would make it difficult for her to save for a home and to pay off the debts that are keeping her credit score low.

The average rent for a two-bedroom apartment in Goshen is $925 per month, up 12% from a year ago, according to Rent.com. For a decent apartment, the cost is closer to $1,200. “My God, rent is so high,” she said.

Renting also comes with restrictions. “If I’m going to be paying this much for rent, then I may as well own and be able to do what I want with my house and not have someone tell me, ‘Oh, you can’t have a cat. You can’t have a dog,’” she said.

She needs to pay off medical bills so she can achieve a credit score of at least 580 — a level she’s already surpassed on newer credit-scoring models not often used by mortgage lenders, like FICO 8 — and qualify for a loan.

Renting does have some perks, she said. She doesn’t have to worry about paying for plumbing or furnace issues, for instance. But owning a home is still her dream, and it remains out of reach. “I just want roots,” Mark said.

A generation of renters? 

The data shows a mixed picture for renters: While the U.S. is building a ton of apartments, home prices aren’t expected to fall enough to make owning one affordable for many lower-income Americans.

There are currently over 940,000 apartments under construction in the U.S., up 24.9% from a year ago, which is helping to address demand. The number of multifamily units under construction is at its highest level since 1974. 

But the supply is not helping all Americans equally. The U.S. is short approximately 7.3 million affordable, available rental homes for extremely low-income tenants, according to the National Low Income Housing Coalition.

One of Stephen Parker’s rental units.


Stephen Parker

Newer units, meanwhile, have been targeted at higher-income renters, wrote Whitney Airgood-Obrycki, a senior research associate at the Harvard Joint Center for Housing Studies, in a blog post this month.

And while rent growth has moderated for more expensive apartments in more sought-after neighborhoods, Airgood-Obrycki wrote, prices were rising faster at the end of last year for the lowest-quality units. 

Landlords are slowing rent increases, Redfin
RDFN,
-5.08%
deputy chief economist Taylor Marr said in a recent report, “because they’re grappling with a rise in vacancies as an influx of new apartments hits the market.” 

Renters — particularly in the multifamily sector — are more likely to stay put due to high interest rates, Stimler said.

“Those who bought apartment buildings last year and locked in historically low rates before rates started rising, they’re going to be okay, because less and less of their tenants are going to leave and become homeowners,” Stimler said. 

Some Americans feel like they are becoming a generation of permanent renters, losing out on the “American dream” of owning a home and building wealth through real estate. But Stimler said he did not think that was necessarily a bad thing. 

“Our parents got married at 21 or 22, settled down, bought a home, got on the property ladder, and that was their first property purchase,” Stimler said. “That was a huge milestone then. Today, we don’t have that need anymore.”

“Millennials are much more transient,” he said. “They want to be able to pick up and leave, and go anywhere [and have] the ability to work from anywhere. All of these factors have led to a decline in the demand for single-family homes.”

Wherever you stand on that particular debate, one thing is clear: Landlords are benefiting from an increasingly unaffordable housing market, while millions of renters in the U.S. find themselves trapped.

“One man’s meat is another man’s poison,” Stimler said.

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Communities struggling with banking access give banks on wheels a spin

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A banking van for the Lower East Side People’s Federal Credit Union parked on the curb of West Tremont Avenue in The Bronx.

Rebecca Picciotto | CNBC

NEW YORK – Parked on the curb of West Tremont Avenue in the Bronx, amid a chain of sedans and minivans, there is sometimes a bank on wheels.

The Lower East Side People’s Federal Credit Union, a nonprofit that provides banking services to New York’s financially underserved neighborhoods, launched its mobile branch in a refurbished school bus in 2014 following the devastation of superstorm Sandy, which forced the closure of its brick-and-mortar branch. It has since upgraded to a specially designed Mercedes-Benz van that serves New York’s Lower East Side, East Harlem, the Bronx and Staten Island, partnering with community groups in the boroughs.

The van provides most of the services of a traditional bank like opening a savings or checking account, securing loans and providing financial advice. It does not, however, have an ATM due to the security risks that come with storing cash in a vehicle.

Banks on wheels are an attempt to repair the gaps within the U.S. banking landscape, which disproportionately impact Black and Hispanic communities. According to a 2022 Federal Reserve report, 40% of Black individuals are unbanked and underbanked, the highest of any racial demographic in the U.S. They are followed by Hispanic individuals, 29% of whom are either unbanked or underbanked.

Adults are considered unbanked if they do not have a bank account and rely exclusively on alternative financial services that charge high fees like check cashing, payday loans, pawn shop loans, as some examples. Underbanked means one has a bank account but still partially relies on alternative financing.

To be sure, the number of unbanked individuals has seen yearly declines, coming down to 4.5% in 2021 compared to 8.2% in 2011, according to a 2021 report from the Federal Deposit Insurance Corporation. That decline correlated with a rise in online banking usage, one of the primary drivers of brick-and-mortar consolidation.

But given existing digital divides, if online banking fully replaces access to in-person branches, financial equity in the U.S. would remain under threat.

Banks on wheels aim to offer at least a partial solution to the increasingly deserted banking landscapes in minority communities. But even the people driving the efforts do not see them as a permanent fix.

“A physical branch is the solution. The mobile branch is a temporary thing to try and build up the physical branch – to build up membership and to build up partners,” said Alicia Portada, a spokesperson for the FCU.

Still, Portada cannot ignore the value of the mobile branches as credit unions and banks shut down faster than they open annually: “It is absolutely needed to have other options.”

BankonBuffalo, a regional bank located in Buffalo, New York, debuted its own bank on wheels this winter.

Darnell Haywood, community responsibility officer at BankonBuffalo, said that at one point, Buffalo had a bank “on every other corner within the city.” Now, Haywood describes an emptier banking landscape. The nearest bank branch is more than two miles from the city center, which, he notes particularly impacts the area’s Black and brown residents.

“When you think of Black and brown communities when it comes to banking, when it comes to anything regarding finances, the No. 1 reason why they may not have financial knowledge is because they’re not privy to access,” said Haywood. BankonBuffalo’s mobile branch is an attempt to bridge those access gaps.

Banking deserts

Employees inside the bank on wheels of Lower East Side People’s Federal Credit Union help a new customer discuss her credit and lending options

Rebecca Picciotto | CNBC

On a chilly January day in the Bronx, the FCU mobile branch had no pre-booked appointments but was ready to accept walk-ins. It was parked outside the University Neighborhood Housing Program Resource Center, an affordable-housing nonprofit. The mobile branch partners with a variety of nonprofits like the UNHP.

A UNHP member, who did not provide her name, entered the resource center office in the midafternoon. As she chatted with Jumelia Abrahamson, a UNHP director, she also met one of the LES People’s FCU representatives, Cristal Veras. After a quick conversation with Veras, she entered the mobile branch to learn more.

Inside the van, there were two small employee desks, a laminate bench for clients to wait for service and a couple of filing cabinets. It took some maneuvering for the customer to navigate the narrow aisle of the vehicle. Then she found a seat across from Gian Alvarado, the bank’s marketing and outreach specialist, who walked her through her lending and credit options. After consulting with Alvarado for roughly a half hour, the customer exited the bank on wheels, having applied for a $12,000 loan.

Historically, banks on wheels tend to make their appearance after disasters like Hurricane Katrina or public health crises, when brick-and-mortar branches are forced to pause operations. In 2022, the Lower East Side FCU mobile branch saw membership grow even higher than it had during the earlier days of the Covid pandemic, according to Portada, the FCU spokesperson.

And as online banking takes off, boosted by the pandemic, more brick-and-mortar locations are closing their doors. In 2021, U.S. bank closures reached a record high. That trend has made a lack of access to banks more than a temporary problem.

Bank deserts are any areas where there are no bank branches within 10 miles of its center, according to the U.S. Census Bureau. To be sure, many areas that do not meet that formal criteria still lack considerable access to financial services.

Nearly 10% of all U.S. bank branches shut down between 2017 and 2021 – one-third of those closures were in majority-minority and low- to moderate-income neighborhoods, according to a report from the National Community Reinvestment Coalition. When the pandemic began in March 2020, the closure rate doubled from 99 to 201 per month.

The acceleration of bank closures has only worsened preexisting gaps in Black and minority neighborhoods.

The Bronx, for example, which is predominantly populated by Hispanic and Black residents, has the fewest bank branches per household of any New York borough, according to the Association for Neighborhood & Housing Development. The borough currently has 123 bank branches, according to a national bank branch location database, down from 144 in 2018.

A Brookings analysis found that in 2017, Black-majority ZIP codes nationwide had substantially less banking competition than non-majority-Black ZIP codes, meaning that there were fewer bank branches within those areas. Less banking competition often leads to higher interest rates and lower saving rates for customers.

The racial divides of the banking landscape are especially visible in Baltimore.

A data map from the Urban Institute highlighting the butterfly-like distribution of residents in Baltimore, Maryland based on race or ethnicity.

The Urban Institute

Lawrence Brown, a researcher of racial equity and author of “The Black Butterfly: The Harmful Politics of Race and Space in America,” has analyzed geographic data of the city to outline what he coined a “Black butterfly.” That is, Baltimore is composed of a “white spine” — an affluent, predominantly white strip running down the center of the city — with “Black wings” where less developed, predominantly Black neighborhoods are concentrated.

Baltimore’s Black butterfly corresponds with which parts of the city receive investment, and, consequently, where banks are incentivized to keep doors open. For example, in Baltimore’s Roland Park, a predominantly white residential community, there are four banks on the same side of the street within one corner.

“But there are large areas, predominantly occupied by Black Baltimoreans, where they have no bank, no loan officer that they can sit down and talk to,” said Brown.

Though banking deserts are on the rise in the wake of the pandemic, lack of access to financial services in Black-majority neighborhoods is not a new phenomenon.

A brief history of banking while Black in America

The fact that banking access is disproportionately limited in Black-majority neighborhoods is, in part, a lingering effect of 20th century redlining policies, according to Brown.

After the stock market crash of 1929 and the ensuing Great Depression, the federal government created the Federal Home Loan Bank system to provide loans for housing development.

“The federal government turns the banking system into a system that redlines Black neighborhoods,” said Brown.

The FHLB provided economic development loans based on maps that outlined Black areas in red, pointing to where loan officers were to limit resources. A similar practice was conducted for Federal Housing Administration loans.

In the latter half of the 20th century, the federal government officially outlawed redlining. In 1977, Congress passed the Community Reinvestment Act, which said that banks must start lending in minority and low-income neighborhoods. According to Brown, it was not a total fix.

“Now these neighborhoods have banking institutions, but they’re receiving predatory loans. So it’s not quite the same and as it evolves, it is still having these very racialized predatory impacts,” said Brown.  

’13 generations behind’

Rashida Webb is a Black business owner who runs Salon Rx, a beauty salon in south Baltimore. When she sought seed money to start her business, she knew a traditional bank loan wouldn’t be an option. Loan officers had regularly told her that her debt, a product of her student loans, is too high.

“Well, of course. Because I’m a Black American. I’m 13 generations behind other people in this country so it’s going to be different for me,” said Webb. To get her business off the ground, she resorted to payday loans of a couple thousand dollars with roughly 17% interest rates.

“Stuff like that sometimes has to be an option when you have to put money down on a place or buy supplies,” Webb added. “And even though I’m able to pay off this predatory loan, a bank won’t give me the money because their criteria is your debt-to-income ratio. And if you’re a Black American, most likely your debt-to-income ratio is high for reasons that are out of your control.”

Given how many times Webb has been denied a loan from traditional banking institutions, she said she does not trust them. While she has not heard of mobile branches in her area, Webb said she would “definitely use a bank on wheels,” if it was properly regulated and evaluated one’s eligibility for loans on a more individualized basis.

Webb is not the only Black entrepreneur who has had to rely on alternative financing methods to launch a small business.

A data map by the Urban Institute depicting the size of small business loans in households in Baltimore, Maryland from 2011 to 2016.

The Urban Institute

Dwight Campbell, who co-owns Baltimore plant-based ice cream purveyor Cajou Creamery, used what he calls “out-of-the-box” funding strategies.

Campbell and his wife, Nicole Foster, who runs the business with him, launched a Kickstarter campaign to fund their first machine but otherwise paid for everything out of pocket to launch their business while working full-time jobs. Campbell and Foster now run their ice cream business full time but are still looking for alternative ways to raise money to fund expansion.

“The space for Black capital is very small. It’s like you’re in a museum, but the only space you have is a broom closet,” said Campbell. “There’s no doors open for capital unless it’s very, very expensive money.”

Foster has not personally heard of banks on wheels in Baltimore, but she finds banking that emphasizes community relationships appealing. She said that given the purpose of banks on wheels to bridge financial access in underserved communities, it could have been helpful in the early days of Cajou Creamery.

“Had that existed, I think it’s something we would have tapped into,” said Foster. “If we find one now even, it might be something we tap into.”

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