Monday, January 11, 2010

Money Talks

You know that old saying that money talks? Well, today money is not just talking, it's shouting, and a whole lot of people aren't listening to what it says.

Fact: some frum communities take a lot of money to live in. Housing costs may be expensive, relative to other communities, taxes of all types may be high, basic services may cost more than they do in other places, and the costs of being frum--shuls and schools--may be expensive relative to other places. Add up all these costs and then look at after tax income and an incontrovertible fact may become clear: there are people who cannot afford to live in these communities. Yeah, so? The unfortunate fact is that there are people who ARE living in these communities who don't have the money to do so. And because they do, they become a drain on the resources of the community. And the more of these people who there are in a community, the harder it becomes for even those who do have the money but are finding it being drained away.

Yes, thanks to the economic downturn, there are people who are finding themselves in financial difficulties who normally would have little problem in affording these more expensive communities. They are hopeful--and so are their communities--that their financial woes will be of a temporary nature. But there are also a whole lot of people who never should have chosen the communities they did because they are never going to have the money needed to just survive there, never mind thrive. Whatever their reasons for choosing these communities, what they did not do was look at the money they had versus the money they would need.

Granted, there are some communities--not exactly cheap to live in but not requiring megabucks either--that have become gentrified. Real estate prices and the concurrent costs of taxes and services have risen so steeply that what was an affordable neighborhood, relatively speaking, no longer is one. There are a few people who suddenly find themselves living in areas that they once could afford but no longer can. But there are also plenty of people choosing these neighborhoods not based on what it costs to live there but based on the frum character of the neighborhood. They are in trouble before the moving truck pulls up to their new living quarters.

There is also this: parents would love for their children to live in the same neighborhood that they do. They'll get to be a part of their grandchildren's lives and see them often. They don't want their kids living in Yuchipitzville somewhere. And yes, there is the non-familial aspect as well: schools in the neighborhood will continue in existence because there will be a steady flow of students coming in, shuls will remain healthy. But established neighborhoods whose pricing is on the high end are the worst places for these young couples to be living. If parents X are in the $250-300K range in earnings and their children are in the $50-100K range at that point in their lives, then how are they living in the same neighborhood?!

There are some established frum communities with a real mix of housing opportunities and schooling opportunities. There are areas of these communities with inexpensive (relatively speaking) housing so young couples first starting out can, with care, afford to live. There are yeshivas in these communities who understand that they have a mixed crowd money wise and are not priced on the highest end. Such communities will have a fairly steady existence pattern--older couples may move out as they retire, couples in the mid-range move up but not out and young couples move in. With care, those on the lowest end of earning capacity can exist in these communities.

What this all boils down to is that THE factor that must be looked at before choosing a community to live in is not the frum character of the neighborhood nor the types of yeshivas available. The first thing must be earning power. If you are in a profession whose earning potential is X then you can't be looking to move to a community where the costs to live are 3 times X. And such communities need to be open and forthright when they look to attract newcomers to move in. They need to say the words "It takes X to live here. If you don't have X this is not the place for you."

These communities also need to open their eyes and face some hard facts: they may not be growing all that fast in the future. They may not be able to expand. Their yeshivas may not have a large influx of students coming in to replace those graduating, just a trickle. In point of fact, some years down the road they may just be a footnote in history: a community that was but whose time ended. Perhaps some of those communities will be able to stem the tide and remain in existence; some will not be able to do so.

But for all of us, we need to remember that money talks, and we need to listen and listen carefully to what it is saying.


Ilana said...

Some costs of a neighborhood you can't do anything about, like taxes or house costs. But there are some things that a neighborhood can do to make itself more affordable and to continue growing. Yeshiva tuitions in communities with higher house costs and taxes seem to charge tuitions that are very much on the high end. Those communities also get a lot of competing yeshivas that are really duplicates of each other. This competition drives up tuition costs instead of lowering them. If these communities want to stay alive and healthy and grow they need to first take care of the insane tuitions.

Mystery Woman said...

For me, the first question to ask when choosing a community to live in is, is this where I want to raise children. Which means..the types of yeshivas available IS important, as well as the frum character of the community. That comes first. Then I figure out how to make that work financially.

Tuvi said...

And then what happens Mystery Woman if you've chosen the frum character of the community and the type of yeshiva and you CAN'T make it happen financially? What if that yeshiva has tuitions for 4 kids in the 60-80K range and you "only" make $100-120K in gross earnings? Does make it work financially mean that you'll move there anyway and count on getting tuition scholarships and/or other help from the community? Or does make it work mean that you'll live on what you earn and have to choose another community to live in?

Sure the yeshivas and the type of community are important when you qre thinking of where to live but the bottom line is still the bottom line and if the money is not there all the wanting in the world won't make things happen.

Miami Al said...

Right, to make this work, the Scholarship system needs to be scrapped and instead replaced with charitable scholarship money for people down on their luck, with a cap of 2-3 years on it. If you lose your job, the community can help you hang on, but if you can't find a new one, we can help you move to a cheaper area that you can afford, not keep pretending that you have money.

What isn't right is people with middle class incomes moving into upper middle class communities because "they want that for their children" and then expecting their neighbors to pay for it.

However, as long as the neighbors ARE paying for it, I can't fault people for moving in and taking advantage.

Karen said...

Seems to me that what you discuss here is more of an MO problem. Look at the MO communities that people want to move into because they have good yeshivas and are thriving communities and you see high price tags for everything. The houses and taxes are high, the tuition is high--everything seems to be high. Doesn't leave those of us not earning in the top 5% of earners in the country much of a choice.

efrex said...

The need for people to be realistic about their financial situation cannot be overstressed; however, I'm somewhat dismayed by the cavalier attitude towards the less well-off. There are no shortage of reasons why someone might want or need to stay in a particular community, and telling families in this economy to pack up and move is not really helping them.

Besides, are there really affordable working-to-middle-class frum communities in this country nowadays? Let's say you're a family of five with a gross household income of $100,000. Where exactly in this country is there a community with a religious school sytem that such a family could be reasonably comfortable in? Let's define "reasonably comfortable" as
* living in a 3-bedroom home or apartment
* paying all reasonable yeshiva expenses
* being frugal in buying food & clothes (no fancy hats or sheitels)
* no more than one car
* saving something for retirement (e.g. maximizing employee match of 401k-type plan)

Does this community exist? If so, are there jobs within commuting distance of said community? Now, try the same exercise with five children and lower household income: anyone? Anyone? Beuller?

As far as I can see, this is the reality for working-to-middle-class frum families. If you want to be frum and fiscally responsible, you need to do one or more of the following:

* limit your family size
* send your children to public school
* forget about entertainment expenses of any kind
* have a smaller home and/or one in the "bad" side of town

Now, I personally see zero tragedy in any of this. My parents essentially did steps 1,3,and 4 so that their children could go to yeshivot, and for as long as I'm in this country, I see myself doing the same thing.

Anonymous said...


Well, you asked me to name only one, so I will--Las Vegas. No state or city tax, reasonable charges for the yeshivas that exist there, rental and purchase prices for housing that are far below anything in the East both in the less expensive and more expensive (relatively) communities, yes, jobs available in "reasonable" commuting distance (and like anywhere else, and particularly during this economic downturn, "available jobs" does not mean that anything that anyone does is available in abundance). The city has multiple mikvaot, plenty of restaurants and plenty of kosher shopping. It's also not a place where the various communities play "Keeping up with Joneses" as their main activity. What doesn't it have? One million frum Jews.

ProfK said...

Sorry, that was me Efrex in the last comment.

efrex said...

Glad to hear it.

I knew that there was a significant Chabad presence in Vegas, but did not know that there was more (not, ch"v, that I have anything against Chabad, but I occasionally like davening shacharit before lunchtime).

I know of friends and colleagues who plan to retire out there thanks to the tax and housing benefits you described, but I was under the impression that the job market had tanked severely there (one of my colleagues has a son who works as a teacher there, and apparently most of his associates have gotten out of town). I also wasn't aware of significant job opportunities there outside of the entertainment/casino industry, which is generally much in need of chemists :)

If this is so, however, then it certainly deserves to be touted as an appropriate destination (possibly the first time that the words "appropriate" and "Vegas" have been used in conjunction :) ).

Also, how is it possible that not one of the synagogues there calls themselves the Sin City Synagogue? (k'hal ir hanidachat?)

ProfK said...


LV has had a population explosion over the last few decades--around two million people now. Yes, tourism and the convention industry are the top employers, but that's a very wide field there. Accountants, finance and management people can still find jobs. PR and Marketing people can still find jobs. Lawyers can still find jobs. If you are in the health care field they are looking for you desperately. Engineers can find work. And LV has its own IT and computer explosion going on--jobs available. Just keep in mind that it's hard to find jobs everywhere if you are looking for THE job rather than A job.

Re the teaching, I'm surprised. Public school teachers are surely needed. If it's the yeshivas, well, they don't tend to pack in with lots of superfluous staff just to make work for someone.

Re the chemists, I spotted 49 job ads for positions that require some type of chemist training just in this week's LV paper. Don't know your specific job so I can't say it's available or not, but I can't say it isn't either.

ProfK said...

Ooops, and re the Sin City Synagogue, not going to happen because that would be "out there" and everyone knows that what happens in Vegas stays in Vegas.

Just an interesting historical footnote, but when Chabad first came into LV it held its first Rosh Hashanah and Yom Kippur services in the ballroom of one of the casino hotels. Would have loved to see the reactions of those on the casino floor as a Chabad rabbi walked by in full regalia on his way to shul. Wonder what they made of the sound of the shofar wafting out from the second floor.

Also, the Siyum HaShas that is held every few years is televised around the world. Where is viewing in LV? Yup, in the ballroom of a hotel casino.

efrex said...

I should have been more careful with my sentence structure. My colleague's son's associates who left Vegas for lack of work were non-teachers; indeed, he felt a bit superior holding on to his job while his friends who were making more money had to leave. As I've mentioned, I'm quite happy to have the life I currently have where I am until I can get the Aliyah act together, but I wish the LV community much hatzlacha.

Trudy said...

Obviously religious factors influence how you are going to choose a community. But I agree that the money factors have to decide by getting the final vote. What good is an ideal community that you have chosen strictly on the religious factors if you are going to be in massive debt to stay there? Or have to throw yourself on the mercy of the community in a short time?

For those who watch their money and have been able to live in their communities without having to ask the community for funds to live until this turndown, well you didn't set up for us to be your payers and we'll help what we can for a while. We'll feed your families and pay your tuition for a while. But no, I don't want to see couples set out to model their entire lives on the idea that a community owes them to make up the difference between what they can earn and what that community costs. Living in certain communities is not an entitlement.

Miami Al said...

Re: 100k incomes... I understand that several areas of Brooklyn have stuff like that. 100k and a house in the suburbs with kids in private school... MAYBE Detroit (the crazy news articles of foreclosures selling for like $100 are all there)?!?!? Not really sure.

But yes, there is a BIG problem in the MO world, in part because the successful Baby Boomer generation were able to put all their kids into a Jewish school system that clearly didn't prepare their kids for college or thereafter...

Mystery Woman said...

Tuvi, I'm not necessarily talking about those high price tag communities. I'm talking about "in-town" communities with a range of yeshivas and schools.
And if I can't make it financially, I'll cut other things out of my budget before I move my kids to a community that I feel is not the place I want to raise them.