The unimaginable dystopias we live in

I’m not sure if it was planned but there was a distinctly dystopian tinge to the magazine section of the Sunday Star-Times yesterday.

The Editor’s Note dealt with the pervasiveness of dystopian themes in the modern books being read by children and “young adults”.    There have been plenty of these in and through our household –  the Wellington libraries seem abundantly stocked with them.  I’ve even read a couple –  the kids seem to like the idea (nay, strongly urge) that Dad occasionally reads one of their books.  I haven’t yet succeeded in getting my youngest to read 1984,  Brave New World, or Children of Men, although she and I both recently read The Handmaid’s Tale and The Testaments –  and I couldn’t really disagree with her, not wholly favourable, assessment of the latter as “like a young adult dystopian book”.  I guess there are all sorts of reasons for liking these dystopian books, some of which are probably less than entirely healthy, but it is interesting to ponder the alternative societies, rules, norms (and lack of them) depicted by the authors.

A bit later in the same magazine section there was just such a portrait, “Dark Days in Dystopia”, but this time about a real place, the state of California.  The column first ran in The Times (UK) and is by Gerard Baker the (British) former editor-in-chief of the Wall St Journal.   It is online only behind the paywall of The Times but the gist is in the lead blurb

“California used to represent a fantasy of Hollywood glamour and wholesome hippie-ness combined.  But now, with blackouts, crippling taxation and unaffordable housing, the Golden State is a feudal society of super-rich and serfs”

Not being that into eiher Hollywood or hippies, I guess my impression of California decades gone by was a bit different, with an emphasis on mild weather, sunny optimism, and widely-spread prosperity.  In childhood TV terms, The Brady Bunch.  In US political terms, it isn’t that long since California was a Republican state – middle (suburban) America.

Baker’s article touches on various aspects of how California has gone bad.  But the revealed preferences of individuals are often as telling as anything and –  as he notes – Americans (net) have been leaving California for years (in the ten years to 2016, a net 1 million left).

Baker makes quite a bit of the breathtakingly high tax rates in California, but his main focus is on housing, “almost unimaginably unaffordable for most Californians” which is, of course “an entirely human-made debacle”.  He quotes a (Democrat-sympathising) academic, Joel Kotkin, who “describes California as a reimagining of medieval feudalism” in which underneath the “wealthy elites” who promote and champion the panoply of problematic policies

are the modern serfs, who can barely afford the land they must rent from their masters. They have no assets, no stake in their economy and, thanks to prohibitive housing costs, have limited mobility.

The column ends

California has always been eyed as a signpost to the future.  The dystopia there might be a warning to voters everywhere.

The column might seem a touch over-written to you (it probably does to me as well) but it was some of the concrete details in the midst of the rhetoric that I latched onto.

The median home price in California is $614000 (NZ$959000), almost three times the national average. The California Association of Realtors’ housing affordability index estimates the percentage of households that can afford to purchase the median-priced home.  For California, that number was 31 per cent….for the US as a whole it was 56 per cent.

But what about New Zealand?

The median house price here is now $607500 (in October, according to REINZ).  That is a lot cheaper than California, of course.  But we, on average, are a lot poorer than Californians.

Average GDP per capita in California is about US$66000.  Here, it about NZ$62000.

In other words, the ratio of house prices to income (this time proxied by GDP per capita) is much the same here –  just a bit worse –  than in California.   I’m a bit wary of median household income figures –  just because I know the data less well – which are more often used for house price comparisons, but it doesn’t look as if the comparisons would be much different in one used that data.   We have our own human-made housing dystopia, without even the consolation of those hugely successful tech companies that also still characterise California.  We have an ongoing productivity failure.   And with few/no offsetting compensations –  between volcanoes and earthquakes, probably much the same sort of natural disaster risk, and –  for those in Auckland in particular –  congestion that seems to rank high (badly) by advanced world standards.   Who’d have imagined just a few decades ago the local dystopia we’ve let our “leaders” create?

And what of the prospects of the next generation?  One of the downsides of living with me, is that my kids get to hear my fulminations about the disgraceful government failure that is our housing market, which in turns engenders occasional, slightly despairing, comments from them about the unlikelihood of ever being able to afford a house in New Zealand.

I was having one of these conversations with one of my daughters the other day.  She was asking how much I’d paid for my first house, which is just down the street and which we walk past quite frequently.  I told her I’d paid $155000, which brought gasps of astonishment. I did hasten to point out that there was this thing called inflation and in today’s dollars that was something like $290000, but it didn’t really change the point (in our unprepossessing but pleasant suburb the median house price now appears to have passed $900000).

When we have these conversations I periodically point out that real mortgage interest rates in 1989 were a lot higher than they are now, that first home buyers probably shouldn’t be expected to buy a median house, and that there are cheaper parts of cheaper suburbs (without, say, having to fall back on the desperate expedient of relocating to my childhood home of Kawerau, where median prices have recently rocketed back up to…about $290000).  I think the kids are right to be uneasy, but smart hardworking well-educated people who marry sensibly will probably eventually be more or less okay.

But in the course of our conversation I got to think about my parents.  They bought a first house (new) in Christchurch in 1962, just before I was born.  It wasn’t a particularly big house, but it was an 809 square metre section –  bigger than most Island Bay sections. My father was 27.  Dad had gone to work at 16 –  as probably most people did in 1950 – working as a clerk at the BNZ and by this time he had his own small newsagent’s shop in Riccarton, but was just about to move back to a salaried position.  Mum didn’t work after I was born –  as probably most mothers didn’t in those days.   There wasn’t –  at least that I’m aware –  family money behind them.    But at 27, on a single income (not supported by tertiary qualifications or lots of overtime), they had their own (new) house in one of our bigger cities.

I don’t suppose it seemed extraordinary then.  It was what young couples typically did.

I’m not suggesting it is impossible now: there are, from the time to time, those stories of extraordinary young people who through hard work, thrift and a focus on one goal have purchased a house very young. But it is extraordinarily difficult now for those who are poorer, less-skilled, less well-qualified, with children.   Almost inconceivable for young people earning average incomes for their age to even think of doing it on a single income in any of our bigger cities, at least without enormous sacrifices of material living standards.    Perhaps simply impossible in Auckland.  And if the groups most severely affected aren’t exclusively Maori and Pacific, they are disproportionately so.

It is a human-made dystopia.  And the humans who lead our governments (central and local) seem quite uninterested in doing anything serious to fix the problems.