Is Vermont on the verge of an economic and population boomlet?

(psst. But if so, don’t tell the Wall Street Journal, which apparently doesn’t understand what’s going on here at all. Otherwise, it might dispatch another confused reporter. Details below).

Don’t start counting the money yet. Don’t put up the barricades, either; multitudes are not about to mass on the state’s borders clamoring for entry. Then there’s this recession business, which may or may not be at the end of its beginning or the beginning of its end. Prosperity could be around the corner, but not necessarily the nearest corner.

Still, there does seem to be a concatenation of demographic, economic, and social developments that just might create an era of affluence and energy in the state.

With needless to say, some potential costs, both financial and cultural.

The evidence is found in a new report from the U.S. Department of Agriculture. It’s called Baby Boom Migration and Its Impact on Rural America, and it’s by John Cromartie and Peter Nelson of USDA’s Economic Research Service.

What the analysts found is that those Baby Boomers, who have been dominating and bedeviling American life since they first emerged in 1946, are approaching retirement age. Over the next 20 years millions of them will stop working and many of those millions will move hither, thither, and (of course), yon.

Nothing new abut that. What does appear to be new is that for many of these aging Boomers, ‘yon’ is neither in the city nor in the suburbs. It’s in the country, or “non-metro counties,” as the demographers put it.

Demographic statistics can mislead. For years, many people were moving to “non-metro counties,” but they weren’t really moving to the country. They were moving to non-metro counties that were right next to metro counties. Adjacent metro counties, to the pros. They weren’t becoming rural; they were becoming exurban.

Not these folks.

“Measured in terms of relative change, populations in more remote (nonadjacent) nonmetro counties will experience the most dramatic changes from Baby Boomer migration,” the report says.” The effect of remoteness, or nonadjacency, becomes slightly positive for migrants in their sixties.”

That’s because the Baby Boomers (the oldest are now 63) nearing retirement don’t want city conveniences as much as they want “desirable physical attributes—pleasant climates, mountains, beaches, lakes.” These counties, says the report, are likely to increase their already high share of Baby Boomer migration.”

Remoteness, pleasant climates, mountains, beaches, lakes? That’s Vermont, right?

Well, four out of five ain’t bad.

In fact, the report makes it clear that one advantage Vermont does not have when it comes to attracting Baby Boomer retirees is location.

“For virtually every age group…the effect of southern destinations is positive, “ the report says. “In addition, the particularly strong pull of Florida and other States in the South Atlantic region reflects a long association with older age migration.

But the retirees-to-be who are not sun worshipers might find Vermont an attractive destination, and it could behoove state policymakers to take advantage of this potential source of people and money. In general, people who move after retirement have a bit of money, and they use it to buy goods and services where they relocate.

“New Baby Boom residents are likely to have a positive

impact on income and employment levels in migration destinations.,” the report say.

And while they’d cost some money, largely for health care services, they don’t add to school populations.

In fact, they wouldn’t add all that much to the total population. We’re not talking hordes here. The report projects that some 400,000 Boomer retirees will move to remote non-metro counties throughout the Northeast during the decade starting next year.

There’s an awful lot of Northeast, and most of it is warmer than Vermont, so the state could expect only several thousand of these Baby Boomer retirees to move in—enough to make an economic impact, not enough to clog up the place.

Which is probably a relief to the folks who live here now, first because at some point population growth endangers nature’s integrity, and second because old people tend to be grouchy.

Another reason Vermont can expect to attract some of these retirees is that many of them are already here part-time. They own Vermont vacation homes or visit every year. According to the report, it’s common for people to move to an area where they had been vacationing.

The report describes. It does not recommend. But it’s clear from its contents what Vermont has to do if it wants to attract some of these retiring Boomers: Maintain the integrity of those “amenities,” make sure high-speed Internet service is available everywhere, encourage the growth of adult education and cultural institutions.

There is, according to the report, one other vital factors when it comes to attracting Boomer retirees—real estate prices. People in their 50s and 60s, the report says, “are moving away from areas with higher median home prices.”

Wait a minute. Doesn’t that put the kibosh on Vermont, where from both left and right come complaints that housing prices are too high and that the state is not “affordable”?

Apparently not., at least not according to the calculations of Razib Kahn, a scientist who blogs for Gene Expression and who (apparently) likes to play with social/economic statistics. Using U.S. Census Bureau figures, he calculated the relationship between income and housing costs for every county in the country.

And how did Vermont come out? Housing was slightly on the inexpensive side compared with income. People get less house for their money on the West Coast and even in the rural South (probably because income there is so low).

Relative to the rest of the country, though, Vermont seems downright affordable, at least when it comes to housing.

Downright safe when it comes to housing, too, which is why the state has the lowest foreclosure rate in the country.

A fact acknowledged by Gary Fields of the Wall Street Journal, who also noted that “Vermont’s strict mortgage-lending laws largely prevented the state’s residents from signing the types of dubious home loans written in other markets across the country.”

By and large, though, the story in Tuesday’s paper concentrated on all that Vermont has suffered, its policies keeping it “on the sidelines of the housing boom and the economic bonanza that came with it. Vermont’s 10-year growth trails the national average.”

By all of three percentage points.

Worse, “Vermonters didn’t see the same sharp rise in home ownership that swept much of America in recent decades.” Nationally, the story said, the percentage of owner-occupied houses rose by 4.2 percent, all the way up to 68.1 percent. Poor Vermont. Its rate rose by a mere 1.1 percentage points .

Yes, to 73.7 percent.

Did anybody ever tell these guys that at a higher level percentage gains are almost always going to be lower?

Still, the point has been made and perhaps Vermont should be ashamed of itself, with all those laws that make it hard for banks to lend money to people who probably can’t….you know…pay it back.

How passé.

Right, it’s only Thursday, but for reasons too complicated (and unimportant) to deal with in any detail, today’s post will perform the tying-up-of-loose ends and other site-related matters usually handled on Friday.

STARTING WITH THIS MAJOR ANNOUNCEMENT: THE NEWS GUY WILL TAKE NEXT WEEK OFF.

Yup, you heard that right. The whole week.

Bad timing because the Legislature will probably finish over the weekend, leaving much to be disclosed and analyzed. But that’s the way the cookie crumbled. Some things have to be done when they have to be done. Next week is when this trip has to be done. The News Guy will not even be back in Vermont until late in the week. As the TV network anchors say, “we’ll see you again…” (this is false, of course; they won’t see you at all) on Monday, May 18.

(But the site will not be totally abandoned; comments will be accepted).

Now to update the fate of some of the legislation discussed earlier:

–As predicted, H. 176, the bill that would effectively register all young men for the draft when they got their drivers licenses was defeated;

–As predicted, HR 446, guaranteeing higher prices to producers of electric power made from renewable energy, passed the Senate. But the 16-to-10 vote was closer than expected, and perhaps not enough to override Gov. Jim Douglas’s likely veto.

If all four senators who weren’t there – Democrats Claire Ayer of Weybridge and Susan Bartlett of Hyde Park; Republicans Vince Illuzzi of Derby and Diane Snelling of Hinesburg – voted for the override it would pass. And perhaps two of the four Democrats who voted no – Richard Mazza of Colchester and Richard Sears of North Bennington – could be persuaded to switch on the basis of partisan loyalty, which in this context is a euphemism for ‘the chance to stick it to Douglas.’

But the other two Democrats – Matt Choate of St. Johnsbury and Robert Starr of North Troy – are probably firmly against the bill. They’re from the Northeast Kingdom, where one wind power project has already been approved in Sheffield and another in Lowell is in the works.

Interesting. The conventional wisdom holds that most people favor wind power projects, and most of the poll results seem to support that conclusion. But smart local politicians – and both these follows would seem to qualify – know their territories.

Worth looking into in greater detail.

If wind power is less popular in the Northeast Kingdom, perhaps part of the explanation lies with the behavior of the wind power companies. Reading over his posts of Monday and Tuesday (Sun, Wind and Noise) the News Guy feared that perhaps some readers thought he concurred with the renewable energy community’s view of itself as local, environmentally responsible, and generally admirable, as opposed to those impersonal corporations such as Entergy, which owns Vermont Yankee.

No doubt some are. But not all the solar/wind developers are Vermonters, or even Americans. And when it comes to arrogance, high-handedness, and…well, let’s just say a disinclination to be candid, Massachusetts-based First Wind, which is about to put wind towers on a mountaintop in Sheffield, is right up (down?) in Vermont Yankee’s league

Since last Thursday’s post (Vermont is Homeless) the News Guy has been excoriated in comments, by e-mail, by phone, and once (though most courteously) even in person, for suggesting that two studies about housing in Vermont over-stated the extent of the state’s housing affordability problem.

One criticism was right on the money. The post stated that “Clearly… the authors of  “Between a Rock and a Hard Place,” (did not know) this little fact: At least 71 percent of the people of Vermont — more than in most other states — live in owner-occupied houses.”

Tough talk, huh? Too bad it was wrong. Right there on its very first page the report says, “Vermont can boast a robust homeownership rate, 72.8 percent in 2008.”

How could anyone miss that? Possibly (this is explanation, not excuse, there being no excuse) the result of reading on the screen instead of on paper. Whatever the reason, apologies to John Fairbanks who wrote the report for the Vermont Housing Awareness Campaign.

And the criticism (bless it) keeps coming. Yesterday’s argument was that if anything the studies understate the difficulty Vermonters have in buying or renting decent digs because they assume that it’s OK for folks to pay 30 percent of their income for housing and utilities, and 30 percent is too much.

It is. The News Guy is old enough to remember the slogan, “a month’s rent should be no bigger than a week’s pay.”  One’s rent or mortgage payment should be closer to 25 percent of one’s income. Otherwise, people are paying too much for shelter, and don’t have enough left over for food, clothing, transportation, and fun. Fun is important.

But the News Guy is not about to withdraw his conclusion that in some ways the studies painted a bleaker picture than is warranted. What they did not include was any correlation between income and age.

There is such a correlation. By and large, younger working people earn less than older working people. They are also more likely to be single or childless, and therefore not to need the two-bedroom apartment that the studies (quite reasonably) used as their yardstick. If a 25-year-old single person, or a 25-year-old childless couple, can’t afford that $914-a-month two-bedroom apartment, who cares? They’re just fine in a one-bedroom or a studio apartment, which perhaps they can afford.

What the studies failed to demonstrate was that there are a large number of people who need a two-bedroom apartment who can’t afford one. It’s possible that those figures are unattainable right now, just one year before the next Census gathers the latest data. But in that case the reports should have noted the absence of the information.

Two more quick points: Nationally, there is a housing glut, with declining prices. Now these reports tell us there are not enough houses in Vermont, and they’re too expensive. That’s not entirely inconsistent; Vermont had the smallest housing “bubble,” with less overbuilding. Also, as “Between a Rock and  Hard Place” did point out, most of the decline in housing prices is in the more expensive houses, little help for the middle-income family that wants to buy a house.

And what about discussing the likelihood that houses are too expensive because they’re too big? All over the country,  yes, even in Vermont, contractors are building huge houses; bigger profits that way. Obviously, the builders are meeting the demands of their customers. But in this country, demand for almost everything – cars, clothes, houses – is to some extent created by the producers, the advertisers, and the culture. Together, they have succeeded in convincing some people that they “need” a semi-mansion for the benefit of…what?  Their standing in the community? Their self-esteem?

Either way, these houses are expensive to build, buy, heat, and light. Not to mention that they are UGGG-LEE (the picture above is from Florida; but you get the idea). They look like they were designed by a computer program; perhaps because they were. Somebody should write a report about how, along with the shopping mall, the office park, the Urban Renewal-created chain hotel/civil center/parking garage complex that has ruined scores of American cities, the luxury residential subdivision is transforming America the Beautiful until one of the ugliest countries in the world.

Oh, the poor, pitiful people of Vermont.

They wander the streets, bearing on their aching backs their worldly possessions, perhaps in a knapsack, perhaps in a bindle. As darkness nears, they seek shelter. Under bridges and overpasses, in a nearby barn, perhaps on the porch of a general store or the doorway of a church. They are , by the tens if not the hundreds of thousands, homeless.

They must be. The headline of the lead story in yesterday’s Burlington Free-Press proclaimed that “Most in Vt. still cannot buy a home.” That’s what the story said: “Most Vermonters can’t afford to buy a home.”

A calamity, especially because just 15 days earlier came word that Vermonters were having an awfully hard time renting a home, too.

“For Vermont’s renters, the news isn’t good,” noted a report from the Vermont Affordable Housing Coalition. The study it released that day concluded that to afford a decent two-bedroom apartment, one full-time earner would have to work 87 hours a week. Clearly, nobody can work 87 hours a week.

Most Vermonters, it seems, are unable to buy a home and can not afford to rent one. Ergo, they must homeless.

Ergo fly a kite.

Clearly, neither an editor at the Free Press nor any of the authors of  ”Between a Rock and a Hard Place,” the study on which the story was based, knew this little fact: At least 71 percent of the people of Vermont — more than in most other states — live in owner-occupied houses. Almost every one of the other 29 percent somehow rent houses or apartments even though the Vermont Affordable Housing Coalition would have you believe that they can not afford to pay the rent.

Either this state has a lot of very forgiving landlords or there’s something fishy about that report.

Probably there’s something fishy about both those reports, and about the near-universal acceptance of them as objective, reliable, sources of information. It isn’t that they are put out by people who don’t mean well and don’t do some good. The Affordable Housing Coalition doesn’t just put out reports. It helps low income people find places to rent and works with both public officials and the private sector to encourage the construction of moderately-priced dwellings.

And it isn’t that these two reports are wrong exactly. Lots of people in this state have trouble finding decent housing at an affordable price. There’s no point going through all the figures in this exercise. If you want the details, read the originals about rentals here and home-ownership here.

But remember, these studies are by advocates, not objective observers. They are honorable advocates trying to find solutions to genuine problems. But like all advocates, they tend to get parochial. Their cause is housing. So they see the problem – that a lot of people can’t afford to buy or rent adequate housing – as a housing problem.

Isn’t it? Well, yes. Or then again, no. It’s a relationship problem – the relationship of income to housing costs. True, housing costs have gone up over the years. But just as important is that income – especially income for the not-so-wealthy – has not.

As it happens, the issuance of both reports coincides roughly with the granting of the John Bates Clark award (for the best American economist under the age of 40) to Emmanuel Saez. Among Saez’s recent discoveries is that, as White House Office of Management and Budget chief Peter Orzag put it, “the very highest earners…(captured)  almost three-quarters of total income growth in the economic expansion of 2002 to 2006, while the remaining 99 percent of the U.S. population split among themselves the final 25 percent of the increase.”

And the farther down you go among that 99 percent, the smaller the share of the pie. No wonder lower income people find it hard to rent a decent home.

But because these two studies have been undertaken by organizations devoted to housing, they assume that  the problem is essentially a housing problem with a housing solution. But maybe it’s at least as much a wage problem with a wage solution. Does Vermont need more dwelling units or stronger labor unions?

Almost without exception, advocacy group studies accent the negative. It’s only natural. If the situation weren’t so dire, why…why, you might not even need the advocacy groups.

OK, that’s a little unfair. Housing affordability is a real problem for some people, and good for the advocates for their reminders. But both of them tilt the evidence to make the situation look worse than it really might be. Read the rental report carefully, for instance, and you discover that the typical two-earner family actually can afford a decent two-bedroom apartment. As it turns out, a typical two-earner family can even afford to buy a house.

Yes, there are a lot of one-earner households, especially among renters. But some of them are one and two-person households who don’t need a two-bedroom apartment.

“Between a Rock and a Hard Place” by the Housing Council and the Vermont Housing Awareness Campaign concludes by saying, “The perennial answer to Vermont’s housing shortage is more housing, particularly more housing affordable to Vermonters of low and moderate incomes.” But it never really established that there is a housing shortage as opposed to a disconnect between incomes and rentals.

Both studies also suggest (though, in fairness, they never actually state) that these housing problems are peculiar to Vermont, and therefore somehow can be eased if only Vermont changed one policy or other. But nothing in the “Rock and Hard Place” study supports any such conclusion.

The rental study, “Out of Reach,” does point out that Vermont is “the 15^th most expensive state in the nation for renters,” which seems to mean that the gap between the median wage and the median rental is 15^th largest in the country. No surprise. Vermont is in the expensive Northeast.

The “Rock and Hard Place” study also assumes (though, again, it never overtly states) the superiority of home-ownership over renting. A questionable assumption. For many people, especially those who have modest incomes and not much of a nest-egg in the bank for a down payment, renting might make sense. Spending money and creating programs to help lower-income earners buy their own homes could be a waste of time and money, and perhaps a disservice to the supposed beneficiaries. The current economic mess stems in part from too many people buying houses they couldn’t really afford. Policy-makers might want to reconsider the wisdom of encouraging such purchases.

Yup, there’s a housing problem in Vermont. Maybe an exaggeration problem, too.