Quote:
Originally Posted by redpoint5
A local homeowner is locked into their mortgage, and it doesn't matter how expensive other homes around them become because their principal is already locked in.
The only way for locals to no longer afford their home would be if their budget was so thin they couldn't afford the increasing property tax, which is a relatively minor proportion of one's annual income.
Mortgage payments get easier over time because they are a fixed rate, and inflation tends to adjust incomes up over time. A $1,000 monthly mortgage payment 20 years from now should be a lot easier to pay. The increasing property taxes should somewhat be washed out by inflation.
It's a pretty good problem to have that one's home appreciates in value so drastically that it becomes burdensome to afford the property tax.
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A. Lots of people rent
B. It is a generational process when kids can no longer live in the neighborhood they grew up in.
C. There is more to cost of living than housing. Wealthy people have more expensive tastes in pretty much everything. More expensive stores and services also come with those wealthier customers. The local bar becomes a Taproom with $6 craft brews instead of $2 Bud Light. The barber shop becomes a salon. The grocery store starts carrying organic and gluten free everything. The local pizza place is bought out and replaced by one with $22 pizzas. $15 for a burger becomes the norm. Etc, etc.
(A basket of fries, 14 inch pizza, and two beers each is $60 with tip at our local brew pub.)