People Living in Cars in Santa Barbara, CA

by Kevin on May 29, 2008

At the risk of sounding heartless, I’ve got to vent about this article at CNN titled “Mom forced to live in car with dogs“.

An excerpt (emphasis mine):

A former loan processor, the 67-year-old mother of three grown children said she never thought she’d spend her golden years sleeping in her car in a parking lot.

“This is my bed, my dogs,” she said. “This is my life in this car right now.”

Harvey was forced into homelessness earlier this year after being laid off. She said that three-quarters of her income went to paying rent in Santa Barbara, where the median house in the scenic, oceanfront city costs more than $1 million. She lost her condo two months ago and had little savings as backup.

“It went to hell in a handbasket,” she said. “I didn’t think this would happen to me. It’s just something that I don’t think that people think is going to happen to them is what it amounts to. It happens very quickly, too.”

Okay. This housing bust has definitely been rough. I agree. It’s even hit the middle class that has been overextending itself (hooray negative savings rate).

But this story is purely devoted to pulling on your heartstrings for a woman who doesn’t really deserve it. That may be a bit harsh, I’ll admit that. I don’t know all of her circumstances and I do feel bad for her.

Again, she said 75% of her income went to paying rent. What? Seriously? That is more than 100% greater than what is recommended as the maximum (generally 30-36% is considered the maximum % of income to go to housing).

The story goes on to tell that she had no savings to help her when she lost her job. Well, duh! If 75% of your income is going to rent, how could you even afford gas, car insurance, or food?

CNN Money has been doing a lot of articles about the recession, slumping economy, and credit/housing crisis and how it is affecting average Americans. A lot of them are extremely overextended and used home equity to buy big toys or send their kids to college. The chickens have come home to roost.

Everyone out there should take the lessons being learned by these poor folks to heart. Don’t buy a home with 105% financing. Don’t pay for your kids’ education with a home equity loan. Don’t buy a house as an investment — buy it as a place to live. Spend less than you earn… don’t spend 75% of your income on housing. The list could go on and on.

I’m not trying to be harsh, but when you sign that 3-in-1 ARM that resets to 9% at the end of your loan, you can blame no one but yourself. You should understand what you are signing when you sign your life away.

{ 9 comments }

Mom @ Wide Open Wallet May 29, 2008 at 10:06 am

My husband and I were talking about this same story. A few of those women should get together and be roommates. And maybe if you’re living in your car you should get a full time job, or two or three part time jobs.

Kevin May 29, 2008 at 11:10 am

@Mom: What puzzled me is the lady profiled in that story has a 19 year old daughter that is living with friends. What, Mom couldn’t join her? Odd.

Stephanie PTY May 29, 2008 at 11:24 am

I have to agree. People need to learn that “I’m paying for something I can’t really afford” means “I run the risk of losing it, and everything else, too.”

Future Millionaire May 29, 2008 at 12:03 pm

Since she’s only working part time and its not like there’s a lot holding her to Santa Barbara why not leave and go to a lower cost of living area where she can find a full time job and reasonably priced housing. I can understand wanting to live in a certain area, but when it comes to being forced to live in your car I think its time for plan B.

Sara May 29, 2008 at 10:13 pm

Santa Barbara is seriously expensive. I can understand how 75% of here salary was devoted to rent. It’s kind of a fact of living there. Still, there’s room for common sense in this situation. If you can’t afford housing, you probably shouldn’t live in that city.

BMA November 4, 2008 at 11:05 am

I just found this because someone was talking about how there should be taxes to help people like this. Taxes my butt!

Santa Barbara is expensive. Only people who can afford to live there should. If she can’t afford to stay, and there is no reason to stay (no dependants), then she needs to move out into the center of the country, where things are cheaper.

She 67 – supposed to be wise and worldly and all that crap. Well, this 20 year old is saying get off your butt and make an effort to better your life or live in your car without complaint because you made stupid choices and only you can correct them.

Like I’m working to pay for her to live somewhere she can’t afford. I’d love to live in LA, someone want to pay taxes to make up the salary I don’t so I can move there?

A.B. November 21, 2008 at 6:19 am

I sure hope none of you are ever down on your luck because with your attitudes, no one is going to give you a helping hand. What a bunch of nasty, judgmental people you are.

Kevin November 21, 2008 at 9:39 am

@A.B. – I really think think there is a difference in being “down on your luck” and “making really terrible, stupid decisions”. I feel for her… but honestly, let’s say she made $2,500 after tax with her job. So she’s spending 75% of that on her condo — $1,875. Leaving her $625 for ALL of her other expenses for the entire month. Food, utilities, gas, car maintenance…

That’s not being down on your luck. That’s called “hoping the housing market continues to go up so I can get rich”. Remember, the typical high end of the mortgage to income ratio is like 35-36%. So she is more than double that.

Don’t defend dumb decisions like she’s this innocent bystander. She signed the papers. She knew what she was getting into — heck, she worked in the industry!

brock macon December 3, 2009 at 7:22 pm

I live in Santa Barbara for free. I’ve had to overcome my conditioning that says you have to pay for everything you get, and submit my EGO, to recieve all that’s there to be given. There is an abundance here and I’m glad to live here!!!!!!

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