America's Low-Cost Counties

What does the Federal Poverty Line represent, when the least expensive counties in the United States have a bare-bones cost of living that is well above that line?

This table lists the Self-Sufficiency Standard — that is, a barebones, no-frills, basic needs budget — for several configurations of family, for one to three low cost-of-living counties per state, from the Self Sufficiency Standard studies — and the Federal Poverty Rate. Here are a few observations:

• The lowest-cost place costs 26% more than the Federal Poverty Guideline for a single adult
• The SSS as a percent of the FPG rises as one moves from single adult to adult and one child, to adult and two children to two adults and two children, even in these low-cost places
• Most of the low-cost places are rural counties with low populations and low densities. The exceptions are the cities of St. Louis, New Orleans, Hartford, Worcester and Springfield.
• Many of these low-cost places have Federal Poverty Rates well above the national average, and yet the "SSS % FPG" calculations show that there is significant need over and above that acknowledged by the FPG in these low-cost places.

Here's something to think about. Suppose that some major portion of the retiring Baby Boom generation finds itself unable to afford to stay in the towns they are currently living and working in. Not only can they not afford to stay in the house whose home equity they have been borrowing against instead of paying off their mortgage in anticipation of retirement, but they cannot afford a more modest home nearby either, because most of the cost of a property there is in the land value rather than the house itself. And the apartment rents in those places tend to be higher too, so renting there may not be within their budget.

So they'll take their home equity, whatever is available after paying off their refinanced mortgages, and set off in search of less expensive places to live.

What will happen to America's rural areas when a few of them start to trickle into each of the less expensive counties? Who will benefit? Who will be hardpressed by their arrival?

The beneficiaries will be those with apartments and houses to rent and sell, or land on which housing can be built. Their patience and foresight will be rewarded, and whose children and grandchildren will be enriched by population growth. (See also : land speculation, speculators, all benefits...) As population rises, economic rent rises. But others who already are renters there will have competition for the available rentals. Young people just starting families will be competing for existing housing with these new arrivals.