The Two-Income Trap (5 page)

Of course, the over-consumption critics have a ready explanation for why housing prices shot up despite expert predictions: Americans are bankrupting themselves to buy over-gadgeted, oversized “McMansions.”.
Money
magazine captures this view: “A generation or so ago . . . a basic, 800-square-foot, $8,000 Levittown box with a carport was heaven. . . . By the 1980s, the dream had gone yupscale. Home had become a 6,000-square-foot contemporary on three acres or a gutted and rehabbed townhouse in a gentrified ghetto.”
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Where did so many people get this impression? Perhaps from the much ballyhooed fact that the average size of a new home has increased by nearly 40 percent over the past generation (though it is still less than 2,200 square feet).
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But before the over-consumption camp declares victory, there are a few more details to consider. The overwhelming majority of middle-income families don’t live in one of those spacious new homes. Indeed, the proportion of families living in older homes has increased by nearly 50 percent over the past generation, leaving a growing number of homeowners grappling with deteriorating roofs, peeling paint, and old wiring. Today, nearly six out of ten families own a home that is more than twenty-five years old, and nearly a quarter own a house that is more than fifty years old.
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Despite all the hoopla over the highly visible status symbols of the well-to-do, the size and amenities of the average middle-class family home have increased only modestly. The median owner-occupied home grew from 5.7 rooms in 1975 to 6.1 rooms in the late 1990s—
an increase of less than half of a room in more than two decades.
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What was this half a room used for? Was it an “exercise room,” a “media room,” or any of the other exotic uses of space that critics have so widely mocked? No. The data show that most often that extra room was a second bathroom or a third bedroom.
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These are meaningful improvements, to be sure, but the average middle-class family in a six-room house has hardly rocketed to McMansion status.

The finger-waggers missed another vital fact: The rise in housing costs has become a
family
problem. Home prices have grown across the board (particularly in larger urban areas), but the brunt of the price increases has fallen on families with children. Our analysis shows that the median home value for the average childless couple increased by 26 percent between 1984 and 2001—an impressive rise in less than twenty years.
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(Again, these and all other figures are adjusted for inflation.) For married couples with children, however, housing prices shot up 78 percent during this period—
three times faster.
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To put this in dollar terms, in 1984 the average married couple with young children owned a house worth $72,000. Less than twenty years later, a similar family bought a house worth $128,000—an increase of more than $50,000. The growing costs made a big dent in the family budget, as monthly mortgage costs made a similar jump, despite falling interest rates.
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No matter how the data are cut, couples with children are spending more than ever on housing.

Why would the average parent spend so much money on a home? The over-consumption theory doesn’t offer many insights. We doubt very much that families with children have a particular love affair with “bathroom spas” and “professional kitchens” while the swinging singles are perfectly content to live in Spartan apartments with outdated kitchens and closet-sized bathrooms.

No, the real reason lies elsewhere. For many parents, the answer came down to two words so powerful that families would pursue them to the brink of bankruptcy:
safety
and
education.
Families put Mom to work, used up the family’s economic reserves, and took on crushing debt loads in sacrifice to these twin gods, all in the hope of offering their children the best possible start in life.

The best possible start begins with good schools, but parents are scrambling to find those schools. Even politicians who can’t agree on much of anything agree that there is a major problem in America’s public schools. In the 2000 election campaign, for example, presidential candidates from both political parties were tripping over each other to promote their policies for new educational programs. And they had good reason. According to a recent poll, education now ranks as voters’ single highest priority for increased federal spending—higher than health care, research on AIDS, environmental protection, and fighting crime.
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Everyone has heard the all-too-familiar news stories about kids who can’t read, gang violence in the schools, classrooms without textbooks, and drug dealers at the school doors. For the most part, the problems aren’t just about flawed educational policies; they are also depicted as the evils associated with poverty.
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Even President Bush (who didn’t exactly run on a Help-the-Poor platform) focused on helping “failing” schools, which, by and large, translates into help for schools in the poorest neighborhoods.

So what does all this have to do with educating middle-class children, most of whom have been lucky enough to avoid the worst failings of the public school system? The answer is simple—money. Failing schools impose an enormous cost on those children who are forced to attend them, but they also inflict an enormous cost on those who don’t.

Talk with an average middle-class parent in any major metropolitan area, and she’ll describe the time, money, and effort she devoted to finding a slot for her off spring in a decent school. In some cases, the story will be about mastering the system: “We put Joshua on the wait-list for the Science Magnet School the day he was born.” In
other cases, it will be one of leaving the public school system altogether, as middle-class parents increasingly opt for private, parochial, or home schooling. “My husband and I both went to public schools, but we just couldn’t see sending Erin to the [local] junior high.” But private schools and strategic maneuvering go only so far. For most middle-class parents, ensuring that their children get a decent education translates into one thing: snatching up a home in the small subset of school districts that have managed to hold on to a reputation of high quality and parent confidence.

Homes can command a premium for all sorts of amenities, such as a two-car garage, proximity to work or shopping, or a low crime rate. A study conducted in Fresno (a midsized California metropolis with 400,000 residents) found that, for similar homes, school quality was
the single most important determinant of neighborhood prices
—more important than racial composition of the neighborhood, commute distance, crime rate, or proximity to a hazardous waste site.
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A study in suburban Boston showed the impact of school boundary lines. Two homes located less than half a mile apart and similar in nearly every aspect, will command significantly different prices if they are in different elementary school zones.
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Schools that scored just 5 percent higher on fourth-grade math and reading tests added a premium of nearly $4,000 to nearby homes, even though these homes were virtually the same in terms of neighborhood character, school spending, racial composition, tax burden, and crime rate.

By way of example, consider University City, the West Philadelphia neighborhood surrounding the University of Pennsylvania. In an effort to improve the area, the university committed funds for a new elementary school. The results? At the time of the announcement, the median home value in the area was less than $60,000. Five years later, “homes within the boundaries go for about $200,000, even if they need to be totally renovated.”
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The neighborhood is otherwise pretty much the same: the same commute to work, the same distance from the freeways, the same old houses. And yet, in five years families are willing to pay more than
triple
the price for a home, just so
they can send their kids to a better public elementary school. Real estate agents have long joked that the three things that matter in determining the price of a house are “location, location, location.” Today, that mantra could be updated to “schools, schools, schools.”

This phenomenon isn’t new, but the pressure has intensified considerably. In the early 1970s, not only did most Americans believe that the public schools were functioning reasonably well, a sizable majority of adults thought that public education had actually
improved
since they were kids. Today, only a small minority of Americans share this optimistic view. Instead, the majority now believes that schools have gotten significantly worse.
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Fully half of all Americans are dissatisfied with America’s public education system, a deep concern shared by black and white parents alike.
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Even Juliet Schor, a leading critic of over-consumption, acknowledges the growing pressure on parents. For all that she criticizes America’s love affair with granite countertops and microwave ovens, she recognizes that parents can find themselves trapped by the needs of their children:

In other words, the only way to ensure that a beloved youngster gets a solid education is to spring for a three-bedroom Colonial with an hour-long commute to a job in the city.

Today’s parents must also confront another frightening prospect as they consider where their children will attend school: the threat of school violence. The widely publicized rise in shootings, gangs, and dangerous drugs at public schools sent many parents in search of a safe haven for their sons and daughters. Violent incidents can happen anywhere, as the shootings at lovely suburban Columbine High
School in Colorado revealed to a horrified nation. But the statistics show that school violence is not as random as it might seem. According to one study, the incidence of serious violent crime—such as robbery, rape, or attack with a weapon—is more than three times higher in schools characterized by high poverty levels than those with predominantly middle- and upper-income children.
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Similarly, urban children are more than twice as likely as suburban children to fear being attacked on the way to or from school.
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The data expose a harsh reality: Parents who can get their kids into a more
economically
segregated neighborhood really improve the odds that their sons and daughters will make it through school safely.

Newer, more isolated suburbs with restrictive zoning also promise a refuge from the random crimes that tarnish urban living.
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It may seem odd that families would devote so much attention to personal safety—or the lack thereof—when the crime rate in the United States has fallen sharply over the past decade.
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But national statistics mask differences among communities, and disparities have grown over time. In many cities, the urban centers have grown more dangerous while outlying areas have gotten safer—further intensifying the pressure parents feel to squeeze into a suburban refuge.
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In Baltimore and Philadelphia, for example, the crime rate fell in the surrounding suburbs just as it increased in the center city. The disparities are greatest for the most frightening violent crimes. Today a person is
ten times
more likely to be murdered in center city Philadelphia than in its surrounding suburbs, and twelve times more likely to be killed in central Baltimore.
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Dyed-in-the-wool urbanites would be quick to remind us that although the crime rate may have climbed in many urban areas, the average family faces only minuscule odds of being killed in a random act of violence in downtown Baltimore or any other city. That may be true, but it is beside the point, because it ignores a basic fact of parental psychology—worry. Parents are constantly mindful of the vulnerability of their children, and no amount of statistical reasoning can persuade them to stop worrying.

Emily Cheung tells a story that resonates with millions of parents. A psychotherapist and longtime city dweller, Emily had rented an apartment in a working-class neighborhood. For years, she sang the praises of city living. But as her boys got older, her views began to change. “We were close to The Corner and I was scared for [my sons]. I didn’t want them to grow up there.” After a series of break-ins on her block, Emily started looking for a new place for her family to live. “I wasn’t looking to buy a house, but I wanted to rent something away from [this neighborhood] to get my boys out to better schools and a safer place.” It wasn’t as easy as she had hoped. Emily couldn’t find any apartments in the neighborhood she wanted to live in. When her real estate agent convinced her that she could qualify for a mortgage, she jumped at the chance to move to the suburbs.

Emily took a huge financial gamble buying a house that claimed nearly half of her monthly income, but she had made up her mind to do whatever she could to keep her boys safe.

Families like Emily’s have long acknowledged crime as an unfortunate fact of life, but the effect on parents has changed. A generation ago, there just wasn’t much that average parents could do to escape these hazards. A family could buy a guard dog or leave the lights on, but if the suburbs were about as troubled as the cities—or if crime wasn’t framed as a
city
problem—then the impetus to move wasn’t very compelling. Today, however, cities and suburbs seem to present two very distinct alternatives. When the car is stolen or the news features a frightening murder on a nearby street, families are more inclined
to believe that the suburbs will offer them a safer alternative. According to one study, more than one-third of families who had left central Baltimore and over half of families who had considered leaving “were moved to do so by their fear of crime.”
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