“As a 30-year-old millennial, I did not think that I would still be living with my mom – with my brother, my wife, and her, you know?” Spencer Sutton told NPR in an interview where he and other millennials opened up about the true price of inflation.
Reporter Scott Horsley, who had spent time discussing the subject with families adversely affected, expounded on the places most families were cutting corners, such as groceries, utilities, and other items we’ve always viewed as necessities. Newsweek reports that in the wake of the astonishing 9.1% inflation increase, which is, incidentally, the highest increase to hit the Consumer Price Index in 40 years, the poorest families are already suffering an unfathomable burden. They must choose between one necessity and another, week after week, month after month.
Wealthier people might find some relief in conserving energy or switching to lower-priced food and clothing brands. However, poverty-stricken Americans hit by inflation are already stretched extremely thin. They have effectively been cut right into a corner they cannot get back out of. Now they scramble in an unfair game of housing musical chairs where even the winner must pay the price of extreme rent burden.
What Is the Inflation Reduction Act of 2022?
In mid-August of this year, President Biden signed and sealed a bill entitled the Inflation Reduction Act. In brief, this legislation includes approximately $369 billion in funding toward important causes such as climate change and healthcare. Some of the key components in the bill include:
- Climate reduction
- Drought resiliency
- Closing corporate tax loopholes
- Lowering healthcare costs and the price of some prescription drugs
- Making energy more effective and affordable
Hailed as the single most impactful piece of legislation dedicated to climate and clean energy, critics of the bill claim the one thing it doesn’t truly address is in its title – inflation reduction.
The Inflation Reduction Act Fails to Address the Key Component of Inflation, which is Housing Prices
By all accounts, the oddly-titled Inflation Reduction Act completely skips over housing, the key driver of inflation.
Reporter Kathryn Watson for CBS News said:
“Despite its name, the extent to which the bill will help lower inflation remains to be seen.”
Several other experts, including Diane Yentel of the National Low Income Housing Coalition, echo this sentiment. Yentel explained that unlike the Build Back Better Act, which was the driving force behind the early Biden campaign, this new act fails to address any of the burdensome housing issues pressing the country. These include:
- Double-digit rent hikes exceeding historical 25% rates
- A shortage of more than 7 million affordable homes
- An astronomical 55% increase in housing prices nationwide in 2021 alone
- Wages failing to keep pace with housing and rental price increases
The White House acknowledged that housing accounts for one-third of the basket encompassing CPI inflation. It cites shelter as “40 percent of the basket for core CPI that excludes the volatile food and energy components.”
Given these facts, it’s safe to say you can’t truly reduce inflation without addressing the nationwide housing crisis. To do so is akin to scheduling scenic sailboat tours of the Death Valley desert.
At first glance, it might seem silly that a bill could be titled “Inflation Reduction” without even addressing the chief component of inflation. But under the surface, this raises serious questions about the legality of deceptively titled legislation.
There are other glaring examples of this deception within the homeless sector. Just this past April, Georgia presented the “Reducing Street Homelessness Act,” which was not drafted to reduce homelessness but to include police officers in clearing homeless encampments, effectively adding an element of criminalization to this already marginalized community.
Housing Isn’t Something We Can Afford to Scale Back On
The premise of being forced to choose between meat and ramen or even toilet paper and electricity still isn’t nearly as bad as having to scale back on housing. This is a sector with no corners left to cut in a country where supply is not meeting the demand.
While politicians proclaim that the bill will reduce inflation by driving down the deficit, the National Association of Home Builders posits that the newly presented codes and restrictions will likely make housing even less affordable. The National Low Income Housing Coalition also points out that public housing units are excluded from the energy upgrades built into the bill, yet another shot in the dark at the poorest people among us.
Talk to Your Local Policymakers About the Link Between Inflation and Housing
We have reached a historical marker where full-time, minimum wage workers cannot afford to rent a one-bedroom apartment anywhere in the country. The dream of homeownership has morphed into a distant fantasy reserved for only the most powerful and elite.
We are already at a deficit in compassion. As time wears on and housing construction stalls ever still, the perilous future looms before us. It is one of unending, unsolvable homelessness.
It’s important to note that while other factors that affect inflation fluctuate, such as the unpredictable gas prices that constantly move up and down, housing is a steady, nearly unbendable force plowing through the economic wreckage at full speed. As housing prices approach the median sale point of half a million dollars, home ownership has dropped yet again. Upward financial mobility is a dying concept, one we unwittingly buried with previous generations.
