Banning Hamburger: Housing Codes in America

 
shutterstock_242818684

Mulberry Street in New York City’s Little Italy, ca. 1900.

If a liberal observes that rich people are eating steak, while poor people are eating hamburgers, the obvious solution is to ban the hamburger. It sounds silly, but if you apply this rule, for example, to the minimum wage for teenagers, it all comes into focus. It is “obvious” that people should not be underpaid — and so we must forbid low-paying jobs. Steak or bust.

Do-gooders doing evil is hardly a new phenomenon. New immigrants to the United States in 1900 could find a place to drop their heads for seven cents a night. It was not remotely nice, but it was cheap. The average hourly wage was 20 to 30 cents, meaning that a person could sleep for 20 minutes of work. Think about that: Can you imagine having a bed to sleep on for a few bucks?

In 1892: – two rooms in an attic cost $3 to $ 5 per month – three rooms (kitchen and two bedrooms) cost $6 to $12 per month – four rooms as described above cost $12 to $16 per month. source….

This tenement apartment at 340, 342 and 344 Cherry Street …  opened in 1888 and boasted a laundry room and bath rooms (rooms with bath tubs) on the lower level as well as a kindergarden on the first floor. Each floor contained a WC (water closet) that was shared by two or more families. All rooms had windows, none were smaller than 10 feet by 8 feet and each apartment contained at least one room that was at least 12 feet by 12 feet. There was no dark narrow hallway, all having widows and gas light at night. Some apartments had running water. Rents were from $6 to $15 per month.

Let’s see … as compared to an average national income of $450 per worker … with only one person working, housing was $72-$180 for a year — or as low as 16 percent of a person’s income. NYC incomes were actually higher ($600 for female teachers, $900 for male teachers for example), so housing could be as low or lower, than 10 percent of one’s income.

Even in the 1940s, the average rents for apartments in New York ran about $50 per month, with housing in the Lower East Side at about $30/month. Even this is probably overstated:

The average rent on the Lower East Side in 1930 was $6 a month per room. Thus, a three-room apartment in 97 Orchard Street might have rented for about $18 per month, little more than it did in the 1870s. There were, however more than 10,000 people at the time living in rear tenements who paid as little as $2 a month per room. source.

The median income for a man in 1940s Lower East Side was $1,358, allowing him to support a family in a three-room apartment in NYC for 17 percent of his income. And that was living pretty high — the tenements offered a much cheaper option. Conclusion: Housing was very cheap for a long time.

The result? People could save. They could move upward. They invested in themselves, in tools and education. Even in homes. In 1938, a new house cost two times the average income. And these poor people did just that. Very few NYC immigrants in 1900 were still poor in 1920.

And now?

Median home values (costs) adjusted for inflation nearly quadrupled over the 60-year period since the first housing census in 1940. Today, housing costs 40 percent of a poor person’s income. That is up from 10-17 percent in 1900-1940.

What changed? Liberals banned the hamburger.

Tenements were dangerous and unhealthy. Sure, people chose to live there and save their money for other things, but we all know that people don’t know what is best for them. So we needed to enact housing codes, and then make them ever-more-stringent as the enforcers of these codes (which include tradesmen) maximized their self-interest.

In recent years, the trend is accelerating. Yesterday’s Wall Street Journal said that regulatory costs are up 30 percent over the last five years alone! Regulations are in fact a huge portion of housing costs. And it is not just fire codes or strength codes; we now have water offsets, required park spaces, landscaping…

$8,000 for a new type of storm-water capture device required for each house, $3,500 for customized architectural plans required on every lot and about $15,000 to remove a tree from the property. …. New regulations included a survey required in some areas of the Midwest to determine whether endangered bats are on a property, which builders said can cost $10,000 or more for each new development. WSJ

Is it any wonder why people cannot get ahead? Why people see that working hard does not translate to climbing the prosperity ladder? There is no option for me to rent out my garage to poor people, or for people to build makeshift housing. The government would raze any such living arrangements, declaring them “unsafe.” The poor must eat steak, or go hungry.

And given that so many of these codes are actually driven more at a local level than by the Feds (I think), here is my question: Is there any viable pathway back to a regulatory structure in which people can be free to choose their own level of acceptable cost/benefit when it comes to housing? Or is hamburger never going to return to the menu?

Published in Culture, Economics
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  1. MarciN Member
    MarciN
    @MarciN

    I wish I could “recommend” this a million times.

    This is the hardest economic phenomenon to describe–it’s not really inflation but it is, and it is more regressive and destructive–and you’ve done it brilliantly.

    Thank you.

    • #1
  2. Mark Thatcher
    Mark
    @GumbyMark

    I think it is difficult to undo this because so many have a vested interest in the current structure, not just politicians.  As an example, building codes started to deal with true risks to life like fires, but have now become all encompassing (and more costly) all in the supposed effort to reduce ever smaller amounts of risk.  Here in Connecticut, porch railings can be no further than 3 inches apart.  Most other codes allow 4 inches, but my state claims it wants to be super protective.  Guess who’s selling more railings?

    • #2
  3. Arahant Member
    Arahant
    @Arahant

    Wait until they start regulating who is safe to be behind a keyboard.

    • #3
  4. MarciN Member
    MarciN
    @MarciN

    We need a name for this because I think it is the problem that the poor and millennials are having getting a financial foothold today.

    The most recent example I have is a new law in Massachusetts that fines people who don’t have their car headlights on at a certain level of darkness. It is so typical of the Left to make life harder for the poor. The law was passed by wealthy people who have nice cars with automatic lights.

    When Raleigh went through its largely unregulated growth spurt, I was visiting my daughter, and I saw apartments for $300 and $400 a month. Holy cow. What a difference in the mood in that city. People had change in their pockets.

    • #4
  5. PHCheese Inactive
    PHCheese
    @PHCheese

    When I was stationed in Agusta Ga while in the Army in 1969 my first apartment was  $ 54 dollars a month. It was brand new, two bead room bath and a half.

    There was a pool and gym and clubhouse. As an E-4 my pay and  separate quarters where $300 dollars. My wife was a school teacher and made $400 a month. We were as they say in high cotton.

    • #5
  6. Susan Quinn Contributor
    Susan Quinn
    @SusanQuinn

    It’s pretty sad. This is why we can’t expect kids today to have a better life than their parents–they are being regulated to death. Unfortunately they are the very ones who are supporting more and more government and regulation. In effect, they are voting to ruin their own future. It’s crazy, but true.

    • #6
  7. Quake Voter Inactive
    Quake Voter
    @QuakeVoter

    Brilliant, combining research with common sense and solid (largely shared!) outlook.

    Keep in mind that for NYC much of the housing stock hasn’t changed much over the past 75 years.

    The Corleone’s apartment on Mulberry rents for $6,000 per month today.

    The inflation in non-tenement housing has been staggering.  My grandparents house in Woodside was built on spec in 1942 for $7,000.  It passed to my uncle at market value for $42,000 in 1973.  Same house sold last year for $825,000.  My uncle’s fifth-year teacher’s salary was $12,000 in 1973; it’s around $60,000 today.

    Parochial school teachers bought houses in 1973!

    The situation in my little town in the Four Corners has followed the same sad arc after adoption of comprehensive zoning ten years ago.  Mobile home witch hunt, three-acre minimum for outhouses, compost toilet ban, accessory structure set back harassment and water/wastewater fees applied retroactively.  The result:  $11 average wage and $900 average two bedroom apartment rental (NO utilities included of course).  In rural Colorado.

    But the County Commission and Town Council are forming a task force to seek state and federal funding for LEED certified public housing!

    • #7
  8. DocJay Inactive
    DocJay
    @DocJay

    A robust black market already exists in the US and it will become normal to do business this way as we become more socialized.

    • #8
  9. iWe Coolidge
    iWe
    @iWe

    My guess is that the best way to reverse this seemingly-inexorable metastization of regulations is to restart with a strict constitutionalist approach. The government of a breakout republic, at least at the federal level, can be limited so that it has no right dictating what people can and cannot do with their own property.

    • #9
  10. The Dowager Jojo Inactive
    The Dowager Jojo
    @TheDowagerJojo

    The drivers for building codes are insurance companies and banks. Homeowners who do not want to mortgage or insure their property (or sell to someone who wants to) can generally get away with doing whatever they want- the regulatory apparatus is inadequate to enforcing the code on them.

    As far as renting, pretty much likewise, there are plenty of black market rentals but the landlord does not tell his mortgage banker or insurance company any more than he tells the building department.

    • #10
  11. Son of Spengler Contributor
    Son of Spengler
    @SonofSpengler

    Pricing has also gone up because of the “no hamburger” effect manifesting in other ways. First, average living sizes are larger than in the past. And second, household sizes have shrunk.

    • #11
  12. Richard Fulmer Inactive
    Richard Fulmer
    @RichardFulmer

    Quake Voter:My grandparents house in Woodside was built on spec in 1942 for $7,000. It passed to my uncle at market value for $42,000 in 1973. Same house sold last year for $825,000. My uncle’s fifth-year teacher’s salary was $12,000 in 1973; it’s around $60,000 today.

    Amazing!  In 1973, your uncle’s house sold for 3.5 times his teacher’s salary.  Now it sells for 13.75 times a teacher’s salary!  While the stated policy of federal housing regulations has always been to make homes more affordable, their actual effect has been to make them far less so.

    • #12
  13. iWe Coolidge
    iWe
    @iWe

    The Dowager Jojo: The drivers for building codes are insurance companies and banks.

    For fire risk, I see it. But the kinds of stupidities mentioned in the WSJ article … required parklands, bat surveys, etc. are all driven by government.

    Note, too, that codes vary – a LOT. I had to pay extra for a special kind of gas piping – inside my home. Where it runs outside, it had to be a different kind of piping.

    Only 30 miles away, Montgomery County, one of the most socialist counties in the land, would rule this arrangement a violation. And vice-versa.

    I wonder to what extent codes are crony protectionism for privileged tradesmen working an area. After all, you don’t want to hire a plumber who does not know the codes, and so you have to hire the local….?

    • #13
  14. The Dowager Jojo Inactive
    The Dowager Jojo
    @TheDowagerJojo

    Whether you may rent your garage is a zoning issue. Zoning is by nature an imposition on individual liberty, but it is imposed locally and is an expression of a group of people choosing what they want their community to be like. If the zoning existed before you arrived you have no grounds for complaint.

    A problem arises in that for any individual community it is usually beneficial to zone out poor people. The net effect is not much space for poor people when most communities go that route.  So you might make such exclusionary zoning illegal, but it is hard to say whether that is really an advance for Liberty.

    • #14
  15. Richard Fulmer Inactive
    Richard Fulmer
    @RichardFulmer

    iWe:

    If a liberal observes that rich people are eating steak, while poor people are eating hamburgers, the obvious solution is to ban the hamburger. It sounds silly, but if you apply this rule, for example, to the minimum wage for teenagers, it all comes into focus. It is “obvious” that people should not be underpaid — and so we must forbid low-paying jobs. Steak or bust.

    This analogy is brilliant.  I will definitely steal it!

    • #15
  16. iWe Coolidge
    iWe
    @iWe

    The Dowager Jojo: Whether you may rent your garage is a zoning issue.

    It is both. Buildings that are designated for habitation have different required standards – codes.

    So even if my zoning allowed it, building a tenement in my backyard would be forbidden by fire and sanitation regs.

    • #16
  17. Randy Weivoda Moderator
    Randy Weivoda
    @RandyWeivoda

    Excellent article, iWe.  There’s little hope that the political environment in most big cities is going to change.  The only hope is for liberty-minded people to move to states and cities that are not ruined and preserve a few places as beacons of common sense.

    • #17
  18. Paul J. Croeber Inactive
    Paul J. Croeber
    @PaulJCroeber

    Spot on and a great illustration of how the lower rungs of societal advancement have been sawed off, ostensibly for the good of the grounded.  What compounds the problem is the capital flow into the regulatory regime at the expense of free markets.

    • #18
  19. Leigh Inactive
    Leigh
    @Leigh

    Brilliant analogy.

    Was researching rentals recently, as it happens. The cheapest I saw was around $370/month. Nicer than the beds you describe, but very bare-bones by today’s expectations — save that it includes heat, which obviously is lumped in with the price. Ignoring that, the apartment would come to about $12 per night — about an hour and a half at minimum wage.

    Obviously, not in New York.

    • #19
  20. cirby Inactive
    cirby
    @cirby

    I work in the trade show/corporate meeting industry, in Orlando. I make decent money, and get to work with people from all over the country.

    A few years ago, I was talking to a guy from New York. He was scoffing at me, and boasted that he got $100 more per day than I make.

    “How much do you pay for rent?”

    He smiled. “Got a great second-floor walkup. Three hundred fifty square feet. Two thousand a month.”

    I nodded. “I have a second-floor walkup, twice that size. On a lake. In an apartment complex with a pool. Free parking. Nice neighborhood. I pay $700.”

    We started comparing other expenses, and it broke down to him bringing home about a thousand LESS per month than I did, while living in an efficiency apartment in a neighborhood that was basically a combat zone…

    • #20
  21. Jimmy Carter Member
    Jimmy Carter
    @JimmyCarter

    iWe: I wonder to what extent codes are crony protectionism for privileged tradesmen working an area. After all, you don’t want to hire a plumber who does not know the codes, and so you have to hire the local….?

    You’d think installing waterless urinals would mean less pipes, but no. Union thugs still got paid to install pipes that serve no purpose:

    Opposition to the waterless urinal was making plumbers look out of step. They were being painted as antienvironmental at a time when builders increasingly wanted to go green. Massey concluded that he was on the wrong side of the argument. By the end of 2006, he decided to support the urinal’s inclusion in the Uniform Plumbing Code.

    But there was a catch. When the code change was finally approved in 2009, it stated that water had to be piped to the waterless urinals. Standard plumbing still has to be done, but the water pipe is simply capped off behind the wall and never used.

    • #21
  22. Arahant Member
    Arahant
    @Arahant

    Jimmy Carter: Standard plumbing still has to be done, but the water pipe is simply capped off behind the wall and never used.

    D’oh!

    • #22
  23. The Dowager Jojo Inactive
    The Dowager Jojo
    @TheDowagerJojo

    iWe:

    The Dowager Jojo: Whether you may rent your garage is a zoning issue.

    It is both. Buildings that are designated for habitation have different required standards – codes.

    So even if my zoning allowed it, building a tenement in my backyard would be forbidden by fire and sanitation regs.


    That is true. But many or most communities prohibit renting your garage no matter what, and my guess is such zoning regulations account for most of the high cost of housing. Where they don’t prohibit it, exactly which fire and sanitation codes do you wish to abolish? It might be ok with you if he throws his sewage in the street till the place burns down, but your neighbor might mind.

    • #23
  24. The Dowager Jojo Inactive
    The Dowager Jojo
    @TheDowagerJojo

    Well maybe you might want to abolish the water supply for waterless urinals and such- like the requirement for copper plumbing slipped into New York’s Labor Law for a while- is it always the plumbers?- but such obvious feather bedding does not really account for the cost of housing.

    The worst is the Energy Code which being neither fire safety nor sanitation is largely a political beast. But even there, you were probably going to insulate anyway.

    • #24
  25. Marilyn Stolz Inactive
    Marilyn Stolz
    @mollys mom

    @iwe

    Just another example of the progressive left’s failure to understand the paradox that rigor produces greatness, both in individuals and societies.

    • #25
  26. iWe Coolidge
    iWe
    @iWe

    The Dowager Jojo: Where they don’t prohibit it, exactly which fire and sanitation codes do you wish to abolish? It might be ok with you if he throws his sewage in the street till the place burns down, but your neighbor might mind.

    Given that the new regulations from the last 5 years have added 30% to the cost of housing by itself, I’d start by simply going by the regulations of 1975. Or 1955.

    Indeed, we have tort law to deal with any behavior that harms neighbors. None of that needs to be in codes. Let insurance companies drive their own requirements – fire alarms, etc. are all economic decisions.

    In extremis, I would be happiest if people could sign away regulatory relief, and be free to do with their property as they see fit (still, of course, subject to any torts they cause). I have no faith that the codes add net value. People should be free to choose to spend their money on other things.

    Think of it this way: If $100 spent on a house could be spent instead on food or education or health… why should people not be able to make those choices for themselves?

    • #26
  27. iWe Coolidge
    iWe
    @iWe

    The Dowager Jojo: such obvious feather bedding does not really account for the cost of housing.

    Again, the WSJ story made it pretty clear that over the past 5 years, regulations have added 30% to the cost of new housing.

    • #27
  28. Probable Cause Inactive
    Probable Cause
    @ProbableCause

    We added a three season porch / extra room to our house.  The environmental regulations drove our contractor nuts.  He spent a lot of time with the local bureaucrats arguing about the size of our windows.  Why that’s anybody’s business, I have no idea.

    • #28
  29. mildlyo Member
    mildlyo
    @mildlyo

    Great post. I can’t tell you how much I hate the code phrase “reasonable regulations”.

    • #29
  30. Brian Wyneken Member
    Brian Wyneken
    @BrianWyneken

    Your post is featured as a “pick” on the PowerLine blog!

    • #30
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