We have all heard about the housing crisis that is sweeping the nation. Massive foreclosures and the decrease in property value is threatening people from all walks of life. This is a serious issue for most people and hopefully they will be able to pull through. But, by the same token, something you might not have heard about is the corporate housing crisis that is attacking states like California.
What is the corporate housing crisis? The corporate housing crisis is an issue that is affecting employees that are starting out in Corporate America today.
Here is how it goes:
You get hired at a company and let's say for the sake of argument your starting salary is $45k a year. You move into a decent apartment. You work for 2 more years and your salary goes up to $50k. In states like California, you still, for the most part, can't afford any type of house near where you work. So what do you do?
You work for 3 more years and your salary gets bumped up to $62k.This still won't get you approved for a loan to buy a house so you are forced to marry your girlfriend/boyfriend/coworker to effectively double your salary. You finally can afford to buy a 2-bedroom/1-bathroom condo 45 miles from where you work (commute is about 1 and a half hours). You jump at the opportunity. Uh oh, now you have a baby on the way...
You make the appropriate cut backs to your finances so you can afford the new child. Things are getting tight financially. Two years go by and your salary is now $70k and you wife is pregnant again. You sell your condo and move into a 3-bedroom/2-bathroom townhouse 70 miles from work. Your commute to work now takes about 2 and a half hours a day (during your commute you constantly play the Bruce Springsteen song "One Step Up Two Steps Back" somehow it seems so appropriate). You work for 4 more years and your salary goes up to $83k. You still can't afford any property anywhere near where you work. Things are once again getting crowded at your townhouse, so you decide to take a chance. You buy an 1800 square foot single family home for $700k.
Things are looking up. You are now in your mid thirties and own a home. The only problem is that your mortgage payments are so high that you are now living paycheck to paycheck. You start to worry about your job security (your mind starts creating scenarios of what would happen if you got fired). Because of this your personal life at home starts to suffer. Fights with the wife over money are becoming more and more frequent. This, of course, eventually leads to divorce (nowadays people can no longer work out issues so they take the easy way out).
You decide to do the right thing and instead of selling the house and splitting the assets, for the sake of your children, you let your wife and kids live in the house. You move back into an apartment (at least it is close to work). You are now in you late thirties and are making $90k a year. Between your alimony, child support and rent you are spread very thin financially. Two more years go by. You decide you need to get out of the apartment. You can't afford a house because of all your financial commitments. What do you do? You marry your girlfriend/boyfriend/coworker effectively doubling your salary. You move into a 2-bedroom/1-bathroom condo 45 miles from where you work...
I don't know about other states, but I can tell you from the conversations had with people from all industries, in California this Corporate Housing Crisis is a reality.