Cities are for the young

But is the old way of getting housing a thing of the past?

For those new readers who may stumble onto my site for various reasons, it’s not going to hurt to remind you that I live in Slower Lower Delaware but work in the nearby city of Salisbury, Maryland. Over the last few years, its erstwhile young, regressive mayor Jake Day had focused much of his city growth efforts on retaining the young people who come from across Maryland to attend Salisbury University. One of those ideas was downtown site infill such as filling surface parking lots with mixed-use development, a process that is still in the works. But downtown has a signature project called The Ross - the tallest building in Salisbury and chock full of luxury apartments. As they describe it:

The Ross is a 14-story student housing high-rise that is being developed in the heart of downtown Salisbury, Maryland. The building will feature 2 and 4 bedroom floor plans, 358 beds (101 units), best-in-class interior finishes, and all-inclusive amenities.

Bear in mind that Salisbury University already has on-campus student housing, and there are several other apartment complexes catering to students near the campus on the south end of Salisbury. Because these aren’t on-campus housing, it’s quite likely the bill will be either paid by the parents who send their kids to SU, or the students who will be juggling classes and near-fulltime work somewhere.

Once graduation occurs, though, these kids will have to move someplace. Try as he might have, Day wasn’t going to keep all the kids here, although he may have more to do with them now as the newly-minted Director of Housing and Community Development in the Moore administration. (Hence, “erstwhile” mayor.) When they do, rents in the Salisbury area for even the nondescript apartments dotting the city landscape are running about $1,300 - $1,500 a month. And that doesn’t count food, utilities, gas for the car to get to work or class, and so forth. That makes it truly difficult to get out of the rent-paying mode once college ends, and certainly there are a million apartments to be had in Salisbury.

But compare that to the stated $13,416 total cost SU estimates for housing and meals for the 2023-24 academic year. (No wonder my parents made me live on campus back in the day at good old MU.) It’s still about $1,500 a month but at least you get the food and can save your pennies. And that’s assuming you’re not getting any financial aid, although middle-class families don’t tend to get much except the offer for student loans.

My point is this: housing plus food is a tough slog for someone making $15 an hour, but once a person graduates college and secures his or her first “real” job, I would think they could expect more like $20-25 an hour. That makes things a little easier, and if parents are wise they can be a big help. Why not insist your child stay on campus and save the difference for a good graduation present: a nest egg they can use to purchase a house?

While I was blessed with getting a refi just before rates surged up, $1,500 covers my mortgage for a fairly new house on 3/4 acre of land out here in the country where I like to live - surely it’s less for someone who buys a little starter bungalow, particularly in town. Even with interest rates up, financing a $200k house with a 10% down payment makes for a payment of about $1,500 a month, but you’re building up equity. (The good kind, not the woke variety.) At some point, as the family grows or you want more space, you can trade up for the amenities you want - like a home in the country.

That’s not to say there’s no risk involved, but having an asset like a home with its equity opens up a variety of fiscal possibilities. Southern Delaware is growing by leaps and bounds because home equity and the desire to retire in a sales tax-free state by the beach allows thousands from New York, New Jersey, Pennsylvania, and other similar areas to buy a retirement home here. If they rented their whole life, what would they have to show for it?

We’ve been told about the prediction that, by 2030, you’ll own nothing and be happy. After the work we’ve put in to place ourselves in the position to own things*, don’t count on that coming true. Those who have no roots are the least resilient when it comes to a crisis, so the key is to get something you can have and hold.

*Yes, I know that we really don’t “own” our house even after the mortgage is paid because of the government having the power to take it away for unpaid property taxes, but for all intents and purposes we will own it since it’s not that much to stroke a check a year to them.