My “What Would You Pay?” essay was picked up at the Strong Towns website. The comments on that piece along with my conversations with my co-worker about the content thereof have broadened the scope of the topic quite a bit. My initial desire was only to remark on the enormous difference in price given the typological similarities between the centers, at least, of the two communities. As it often does at Strong Towns, that conversation turned to resilience and long term consequences.
On the topic of resilience, and it’s imperative that I remind you that this colleague of mine is a profound thinker in my experience, it became horribly clear that his initial plan to buy in West Hartford was anything but resilient! He and his wife bid on a $500,000 home having calculated that they could make ends meet even with the mortgage, insurance, and property tax payments that would require. He felt lucky that their bid was rejected because an increase of $1,500 in property taxes was announced shortly thereafter which would have tipped the balance in favor of insolvency. $1,500. $125 a month. For two people earning a combined six figures without a doubt. And that would make the whole plan crash and burn.
It turns out that they would both need to commute by car. In opposite directions; two cars, two car payments(?), insurance, maintenance, gas. Children are planned. What happens with maternity leave, the expense of child care, clothes for the kids, toys, and the like? None of this calculates in the expense of eventual roof repair, boiler replacement, painting or repointing…and the ever looming Black Swan.
My wife and I have had the financial “year from hell”: funeral expenses, estate expenses, unforeseen home expenses (see above!) and more. Our taxes actually DID go up. After a year, though, we’re right back where we were in terms of savings and liquidity. We weren’t able to do some of the things we had planned to do, so apart from not being in what we had hoped would be a better financial position, we’re not in a worse one.
More broadly, I could lose my job and we could still afford to live here. My wife could lose her business and I could be cut back to 3/5 at my job and we could still afford to live here. If things ever did get worse than those two scenarios, we could rent out the basement or, if things were even worse, we could live downstairs and rent the upstairs as either a residence, office space, or a combination of the two. I don’t mean this as gloating, I mean it as a statement the level of security living in a less desired, but not less desirable, neighborhood can be.
If you’re familiar with the Crosby, Stills, and Nash lyric: “If you can’t be with the one you love, honey, love the one your with.” (Is it “doo doo, doot doot doot doot dedoot doo doo doot doot doot doot dedoot, doodoodoot”?) think of it this way; if you can’t do (doot) all the things you want to do in your immensely less expensive neighborhood, learn to want to do the things you can do in your community. I might not be the world’s biggest hockey fan, but pro hockey is what we have here so: “Go, Thunderbirds!”
Have you ever noticed that people who chide those of us who pay close attention to our finances for “only caring about money” are doing so because we are either denying them money or demanding it be repaid? Perhaps it’s just me. I love the freedom that having financial flexibility offers. I’m no Mr Money Moustache, but I am a much lazier much less focused facsimile. I should do more, but I balance my investing in reducing future expenses with enjoyable pastimes such as dining out and attending concerts. Dmitry Orlov suggests dining in with friends instead of dining out; but what if the local restauranteurs are your friends? And I like to balance humble pleasures with not so humble ones: the Springfield Symphony, the museums of Fine Arts and the George Walter Vincent Smith. We could gain entrance to the Quadrangle Museums (including the soon-to-be-open Amazing World of Dr Seuss) at no charge as Springfield residents, but we pay for membership anyway; seems like the right thing to do.
I realize that some people will never be convinced and I don’t have a problem with that. It’s easy to view living where I do as an adventurous choice, and there are elements of adventure connected to it at times, for me, however, it seems much less risky than living at the exact level of my means. In life the unexpected will emerge, being able to put the financial side of those emergencies at a lower level of priority can make for some much more peaceful Saturday mornings.
I’m in a slightly different position, but regularly mull my options. I live in a one bedroom apartment in San Francisco that I bought a looooooong time ago. The mortgage was small to begin with and is nearly paid off. I have a modest little country house fifty miles away in Sonoma which I bought during the post 2008 crash at a greatly reduced price. It’s rented to a wonderful family so there’s a little passive income – and no mortgage. On paper it’s a pretty financially secure arrangement. Except… Earthquakes. Massive forest fires. At any moment it could all go away. Insurance will only go so far since there are hard limits written in to even the best policies. There are no guaranties in life.
FYI, Springfield, MA is 56 miles downriver from the defunct Vermont Yankee nuclear power station. The plant was decommissioned in 2014, but all its spent fuel rods are still sitting in a swimming pool on sight. 73 miles to Springfield’s south in Waterford, CT and the aging and not-so-well maintained Millstone nuclear plant with three reactors. I’ve been to Pripyat and Chernobyl and the Exclusion Zone stretches for 271 miles in a gloppy patchwork depending on where the heavy particles landed after the explosion. I’m neither for nor against nuclear power. But those plants exist and they do come with risks.
Las manos de dios…