Real Estate and Reston, VA: Blogging about Poverty as part of BLOG ACTION DAY 2008

This post is part of the October 15 BLOG ACTION DAY POVERTY

As the election nears, we have all become accustomed to the 'sound bites;' those little quips that get tossed around that are supposed to make us feel better about one candidate or the other.

The one that sticks in my head (and you don't need to worry, this is NOT a political post) is the middle class family making less than $42,000.   I suppose there must be places in this country where a family could get by on that, but in the D.C. Metro area--and I will use Reston  as an example since that is where I live--you would be hard pressed!

Just for grins, let's evaluate a family of 4 making $42,000. That comes out to $3,500 per month (before taxes, savings or retirement are paid). Assuming that we use a figure that allows for 30% of their income going to housing, this family would have $1,050 for rent or mortgage payments. That leaves $2,450 for everything else.  Not bad but, 1) there are not a lot of properties in that price range--and certainly not suitable for a family of 4, 2) this is before taxes, college funds,savings and retirement--and at least the taxes are non-negotiable.

I just did a search for properties less than $1,050 in Reston with no other limits. I came up with 1 2 BR, 2BA condo. All the rest were 1 BR.  So you can see what happens here...the amount spent on housing increases. If I search for a 3 BR, 2 BA (the size desired by most families of 4), the lease expensive rent is $1,450.  This does not allow for any choice about neighborhood, school, proximity to transportation, shopping or any of the other things my clients ask me for.  This would be all about finding the cheapest alternative for housing.

Now the family is left with $2,050 each month.  If we assume $200 for power, $50 for phone, $800 (conservative) for food, a cable bill of $50 and a cell phone bill of $50, they are left with $900 a month to cover everything else (yes, including taxes, savings and retirement--oh,  and saving for college).  They probably need a car and car insurance, renters insurance, the kids need money for school (field trips, school pictures, activity fees, instrument rentals), and they will have to pay personal property taxes on the car. 

And now, what if one of the kids breaks their arm?  I have not factored in health care costs.  Is this going to come out of the $900 they have left to cover all the car and transportation expenses?  What if the daughter makes the area orchestra? Now they need black pants, black shoes and a white blouse. The car blows a tire or doesn't pass the safety inspection...each of these things could be the difference between being able to pay the babysitter so that the parents can get to work on time, or not.

I could go on and on with this scenario.  Of course, there are ways to improve their situation. They could get better jobs--although sometimes that requires more education (expensive) or additional commuting costs (expensive).  They could move somewhere else, although the salaries are likely to go down as housing costs go down.

Believe me, I understand the value of hard work and I work hard and I expect others to also.  Sometimes, however, the circumstances are not black and white. Not everyone can get the education that leads to a better job--and it is not always because they are lazy. Sometimes they have to go to work as a teenager to pay their family's rent, or maybe they had to drop out to help an ill parent. Maybe they got mixed up with bad kids and drugs and have gotten back on track--but too late to go back and get a 'do over.'

So what is the answer?  I don't know, but I do know that there is a problem. Education is the main way to improve your earning power.  With the Internet, it is becoming increasingly easy to study on line for GEDs, associates & bachelor degrees and even advanced degrees.  That might be one way for the family to improve their situation--of course that would require a home computer (not factored in to my scenario) and some extra cash.

What are your thoughts? 

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