Rowyn (rowyn) wrote,
Rowyn
rowyn

Priced Out of the Market

A little background on why I'd rather businesses extended too much credit to their customers, rather than too little:

In 1995, I was living and going to graduate school at a university in Ohio. My annual stipend as a student teacher was about $6,750. (That's before taxes, but when you're making $6,750 annually, income tax actually gets you a couple hundred more dollars rather than taking away.)

I lived in a studio apartment on campus, paying rent of around $335 a month. For those of you doing the math, that means about 60% of my income went to rent.

After my first year there, my boyfriend and I decided to share an apartment, and we started looking around for a larger one. He was also going to school and working part time, but he was making, as I recall, less money than I was. We found several off-campus apartments that were cheaper than the on-campus ones, and we talked to their landlords about renting one.

Every landlord we spoke to wanted to know how much money we were making, and every one turned us down because the rent payments would be more -- much more -- than 36% of our income. It didn't matter to them that the rent I'd been paying for a year was 60% of my income. It didn't matter to them that I was, obviously, already making do on a tight budget, or that I'd be spending less on rent with them than I was currently. Or that I had never lived in an apartment that cost less than 36% of my income. They looked at their benchmark, said "You don't fit it", and as far as they were concerned, we ought to go get higher paying jobs, or be homeless.

We ended up moving to a one-bedroom apartment on campus. It was more expensive than any of the off-campus places that had turned us down for not making enough money. We paid our bills promptly and had no significant financial difficulties.

You know, I'm not saying that the landlords ought to have been required to accept our application, or that they were wrong to reject people for having an income below their threshhold.

But I'm sure not going to cry and complain because the university was willing to let me spend 60% of my income to live in one of their apartments.
Tags: economics, life
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