Apr 11, 2013

Low Income = 2,000 Square Foot House?

Occasionally, a clip plays on the nightly news that sets me on edge and triggers dilation-10 breathing patterns.  Here's one, Des Moines is building a 26-unit low income greystone project to the tune of $6 million.  That works out to $230,000 per, tenants will be on a rent-to-own plan, at $675 a month.

Each home will be 2,000 square feet. 

That is huge.

Am I a just a crotchety old man with his underpants pulled too high or is it overkill to build homes that size for families making $25,000 a year?  More space eats cash with higher:

  -  Purchase price
  -  Property tax
  -  Heating and cooling
  -  Furnishing
  -  Maintenance   

I've been working hard and putting the hours in on the job for over a decade to pay off my modest 1,000 foot ranch.  
  
Wouldn't it be better to instead offer 52 units at 1,000 square feet each so twice the number of poor people have a roof?  

What do you think?  

-Beard

57 comments:

  1. I work A LOT of hours every week and live in a tiny apartment. Something isn't adding up here...

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    1. I lived in a gross 600 square ft. apartment at $650/mo. after college, because that is what I could afford. Apparently, that same cash outlay now brings 2,000 sq. ft. for low income families. Smells fishy.

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  2. Anonymous4/12/2013

    This infuriates me as well. And you are correct. It would make much more sense to provide more homes of a more reasonable size, even a mix, some smaller homes with 2 bed/1 bath and some larger with 3-4 bed/2 bath for larger families.

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    1. Agree, it seems like a no duh thing.

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  3. Um, that is INSANE. Although I'm not in favor of how the low income housing is set in Spain (they don't check if you're still low income once you've bought the house so, for example, it could happen that you win the lottery the day after you buy a low income house and you get to keep it. AND you get to sell it at market price 20 years later) at least they don't have houses that big! More like 500sq feet for 1 bed, 700sq feet for 2 bed, 900 sq feet 3 bed etc. If you're a couple with no kids, you don't qualify for the 3 bedroom one, but whenever you have kids you can ask to be switched houses.
    I believe low income housing should all be for rent – not for buying. I have no idea how it's in the States but in Spain most low income housing is for sale. And the upper limit on income is extremely high right now. As in, my husband and I qualify for them, though we're not living in one. Paying for our non-low income housing is hard, but we can do it with some sacrifices, so I really believe they should lower the limit/change the conditions.
    Also, since builders are force to have something like 20% of all their new construction buildings be low-income, they increase the price of the other houses to make up for the loss on those units, thus driving real estate market prices upward. aaaand that's why Spain is in *such* a terrible place rate now. That and political corruption of course but that's a subject for another day...
    This subject obviously puts me on the edge... I'm shutting up now.

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    1. Ha, your comment does a tidy job of summarizing some of the triggers for the financial squeeze that's been going down in Spain. America is on that same path, people just don't seem to notice or give a rip.

      People in Europe, Asia and nearly every part of the world will do a facepalm at the thought of a large 2,000 sq. ft. home for low income families. I've been to India and seen true poverty, I watched as a man was dying in the street from hunger, pretty sure he wasn't faking it. Folks here in the states that are on the poverty line living in 2,000 sq. ft. houses with cable TV and other luxuries that many middle class families don't have is not cool.

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  4. That is completely unnecessary! Our house is 1300 sq ft and it's plenty big for our family of 4. Plus our mortgage is way less than 230,000 and we pay 2 times their $675/month...how would they ever pay it off at that rate? Well, I suppose help from the government of course!

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    1. Correct, my tax money is covering the gap for what that $675 payment is lacking.

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  5. Melissa C.4/12/2013

    2000 sf?!?!?! That's obscene. We are a family of four (plus two indoor cats). When we started, it was just the two of us and one cat in a 960 sf ranch (3 bedrooms, 1 bath, kitchen, living room...and a one car garage underneath thanks to a walkout basement). Clearly our family has grown and we've undertaken the construction of an addition/renovation (adding 12'x20' to create a second bay to the garage with a master bed/bath above; reconfiguring the back half of the original house so that it will be a 3 bedroom/2 bath). We started the project almost four years ago and since we're on the pay-as-you-go plan (no loans) and doing the work ourselves, we're still plugging away.

    I'm all for lending a helping hand, but this is unrealistic (and insulting to people who work hard to make the most of what they have and live within their means). I'd rather have our "measly" (and sufficient) 1200 sf that we EARNED than 2000 sf on the backs of others.

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    1. Melissa C.4/12/2013

      Oh...and to satisfy my own curiosity, I Googled "average US home sizes" and came across a table listing median and average square feet of floor area in new single-family homes by location (region of the continental US) between 1973 and 2010. I live in the northeast. My house was built in 1976. Median US was 1,590 sf and median Northeast was 1,505 sf (averages were 1,700 and 1,630, respectively). Fast forward to 2010 and the median US was 2,169 sf and median Northeast was 2,336 sf (averages were 2,392 and 2,613, respectively).

      Everything in this country needs to go on a diet, especially "our" inflated sense of entitlement.

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    2. Yes, all that.

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  6. This just ruined my day. Are you kidding me?? I am by no means complaining about my life, because my husband and I are very fortunate, but we both work two jobs (granted, we like to have some "fun" money), and work 50+ hour weeks to pay off our very modest home quickly and efficienty.
    This is a joke. Everything in our country is just getting to be out of control. Why work? Seriously?

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    1. Most duel income families making $100,000 a year in Des Moines live in homes less than 2,000 sq. feet. Doesn't make sense for someone making 1/4 that mount to be in a house twice as large. Especially when tax payers (you and me) are covering the gap between what these multimillion $ projects cost vs. what the low income tenants pay.

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  7. i couldn't agree more. i can't wait to have a small house. my boyfriend and i have been renting for five years because we simply cannot afford a home in our area, with 95% of the homes in our area for sale being over $200,000. that is so damn much money. i've learned a lot of money lessons in my 20's that make me want to simplify everything - smaller can be better!

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    1. Good for you, slow and steady, save up a fat down payment before pulling the trigger on a home. Despite what others say, I don't believe that renting is throwing money away. Rent makes perfect sense for many people.

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  8. I am concerned that people making that amount couldn't afford the upkeep. The maintenance on 2,000 square feet is going to be a lot more expensive then a smaller place!
    IN Cedar Falls, I received a $150,000 house where the city paid a 25% down payment (it is a plan to add more middle class houses to the area). I barely made the cut off for financial approval (had I made $200 more the previous year, I would not have qualified). Since then, they lowered the income requirements. I have absolutely no clue how someone making less then what I do could afford it...I see the same situation happening with the housing in des moines!

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    1. Exactly, people making $25K a year will have a VERY difficult time trying to maintain a beastly 2K feet. A house is much more than the purchase price, yearly property taxes in this town are painful.

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  9. HA! That's only a little bit pricier than we're renting our 670 square foot apartment for. Not complaining, because right now our tiny apartment works well for us, but this is crazy.

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    1. Right, I paid $650 back in the late 90s to rent a crusty 600 sq. foot apartment.

      I estimate the $675 rent the tenants are paying for 2,000 sq. feet is only covering 1/3 of the actual mortgage bill. Guess who is making up the difference?

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  10. Live for today! Who cares who pays tomorrow...if it is free or easy, why not stake your claim before somebody else does?

    Sick. Wrong. Helping nobody! Hurting ourselves and future generations. Going to Hell in a hand basket!

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    1. People in some states make $60,000 a year on unemployment if the husband and wife are without a job. I'm not sure folks have much motivation to look for a job if they get paid $60K to NOT work.

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  11. Um, yeah, that's just ridiculous. We're a family of five in just over 1000 square feet. Something doesn't sound right about the planning here. Insanity.

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    1. Our family if 5 grew up in 800 sq. feet, and we turned out halfway decent.

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  12. Oh boy, what a tricky subject. I try really, really hard to not pass judgement on what other people "need" or "should have." It's just not my call. With that being said, in general, an ALL low income project is a bad idea as far as city planning is concerned. Also, the idea of having some smaller units so that more families could be helped makes a lot of sense. And lastly I'm always a proponent of quality over quantity - projects like this tend to be done quickly and cheaply with the idea of bigger is better. Ugh, it's just so contrary to my thought process.

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    1. Very well said. Agreed.

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    2. Daughter and I help cook meals for the poor at St. Joe's emergency shelter. We are allotted a limited amount of money to purchase ingredients to cook enough food to feed 30 people.

      We could either pick up a handful of steaks and have enough money to feed a dozen mouths or we could do pasta on the cheap and feed all 30.

      The problem with these large 2,000 sq. foot houses for the poor is we are feeding steak to a handful of people rather than spaghetti to MANY MORE families in need.

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    3. It's possible that "quality over quantity" didn't come across the way I intended - I was talking about the quality of the homes themselves vs the quantity of space. I agreed with your idea of making smaller units in order to help more people! We live in less than 900sf and it works for us, but it wouldn't work for everyone.

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    4. These greystones are actually pretty nice and built to a high standard. Polished concrete ceilings and stone or brick on the outside.

      Double helpings of marbled steak to a few low income families here...large portions and a high grade of finish. It's an effective recipe for helping as few of people as possible for $6,000,000. That's a fail in my book, and not showing good stewardship of my tax money.

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  13. Anonymous4/12/2013

    Good Gawd. I live in a 1,000 s.f. *raunch* and if it's good enuf for me . . . I know people who have McMansions but can't afford to put any furniture or decor in the cavern. I'm with you, Beard. Uhhh, I couldn't comment on the placement of yer undies, though.
    Joanie

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    1. Raunch, I laughed. Which is also a good description for my undies.

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  14. I think that the planners of this development are elitist - and this isn't so unusual. I saw a morning news show a few years ago that was going to show you how you could afford to buy a first time home. They had a real couple and an "expert" helping them. The "expert" decided that this couple could never afford a "starter" home - on live TV. Of course, the "starter home" in question was 2,500 sq ft and cost $250,000. Most of us will NEVER buy a house for that much money, even though we're educated, gainfully employed (and above the average), and feel fairly well off. The "expert" never considered the idea that you start with a tiny house and move up, or that you may buy a grungy house that's underpriced and fix it up. Our first home was 800 sq feet and in the ghetto (literally). It helped up get a foot in on the upward spiral housing took in California in the 70's. Lots of us WANT a more modest home. As to this development - of they are paying only $675/month on a rent to own $230,000 nut to crack - they will never have any ownership or equity. The numbers don't add up.

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    1. What's silly in all this is that second article I linked to above mentions $50 of each monthly payment is set aside in escrow to be paid as a downpayment if the tenant decides to purchase the 2,000 sq. ft. mansion. $50 a month, c'mon, that won't do jack squat for a downpayment on that size of house, even if paying into it for 10 years.

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  15. Anonymous4/12/2013

    Okay I have to agree that 2000 SF is huge for low income housing but I can see possibly why. From reading the 2nd article it’s obvious they bought numerous parcels of land and the zoning will only allow so many units per parcel which limits the amount they can build to the 26 I am guessing. As there also hoping to get various tax credits etc., they may also have to build the houses to a certain size and/or the zoning may require a certain size.

    I have volunteered on several Habitat for Humanity builds and several were close to 2000 sf or more. Most of the time Habitat has all the supplies and volunteers etc that they could build huge houses if they want but are limited by the cost of buying the land to build them on.

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    1. I suspect the developer is in it to maximize profit, rather than to help the poor. If he gets a higher payout for raw square footage for the entire project vs. number of units, it's much cheaper to build 26 large units rather than 60 smaller homes.

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    2. Melissa C.4/17/2013

      I don't know the rules in the state where this is proposed, but my state (MA) has a program called Chapter 40B. Chapter 40B is a state statute, which enables local Zoning Boards of Appeals to approve affordable housing developments under flexible rules if at least 20-25% of the units have long-term affordability restrictions. So basically, developers of "affordable housing" projects can increase the density of the units beyond what zoning allows if they meet the requirements of Chapter 40B. This program has its benefits and drawbacks, and is often met with a great deal of local opposition.

      Not sure where I'm going with this, other than to say that there may be a regulatory vehicle that allows for a more practical housing solution than 26 2000 sf units.

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  16. Anonymous4/12/2013

    well, thanks for the heart palpatations. that is rediculous! might need more than 10 breaths! one of the reasons i dont watch local news, just gets me all hot and bothered.

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    1. Deep breaths, find a paper bag if you want.

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    2. Melissa4/17/2013

      Then pop the paper bag. Repeat as necessary. Maybe it will help...

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  17. I agree!
    I'm in 1600 square feet, double income (one freelance) and we struggle.

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  18. WOW! We have 1,100 Sq ft (full basement that's man cave style 'finished' as well) but it's plenty of room! Will have it paid off in 9 yrs (only lived there two). Did you ever make the big decision about paying yours off this year?

    I believe this mindset is the same we're seeing at the college level from students who feel entitled to super nice dorm rooms...another rant for another time though.

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    1. I'm aggressive on the monthly house payments, but probably will not accelerate them to the point of burning the mortgage in a year. I decided draining stocks to pay off the house is moving too many eggs into real estate. Probably prudent to keep things diversified in case home prices tank again.

      I talk with people who interview college grads trying to get a job, there is definitely an entitlement mentality for many of them. Expecting to make a high $x per year with no experience, good luck with that one.

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  19. I agree with the poster above who felt uncomfortable deciding what other people need; whether or not families need 2000SQ is not really relevant. Anyone with a computer that has been purchased for personal use is utilizing electricity unnecessarily - it's a luxury, not a necessity. All any of us need is a roof over our heads and three squares - that could be accomplished with far less than 800 square feet for two people (in your case) and chicken necks, a vegetable and a piece of wheat bread for dinner every night.

    We all indulge in luxuries, and I'm not sure I agree that I get to decide how a low income family should live.

    That being said, I too worry about the upkeep and hope this situation doesn't cause an "Extreme Home Makeover" situation where people are in worse financial shape after moving in than before. Other than that, I don't know the circumstances of these low income people and would want access to that information before allowing myself to get upset (if at all). MANY of our military families, who are making the ultimate sacrifice, are low income families. There are certainly bad apples, but let's not them to judge the entire bunch.

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    1. If we truly want to help the poor, isn't is more logical to build double the number of units at half the size so twice the number of people have a roof?

      The new low income units are for people making $25,000 a year (varies slightly based on number of children), living in 2,000 sq. ft. homes worth $230,000, for $675 a month. The numbers don't add up, so my tax money is covering the gap of what's not being paid for in rent by the tenants. That's the rub.

      I fault the developers (fewer large homes rather than more smaller homes) and the way the government lines up the tax kickback on this type of project more than the tenants.

      Owning a large house is not a right, rent of a modest sized abode is perfectly fine for millions of people.

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    2. There's a fine line between judging and just plain telling the truth. I try very hard to understand how people came to such hardship. Some stories are unbelievably sad and you can sense that it will be very difficult, if ever possible, to reverse the situation. But a large number of folks are simply "milkin' it". They're capable, just not willing and nobody is calling them out on it.

      Oh, and Annapolady, I agree that military families are an exception, more often than not. They simply don't get thanked enough.

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  20. I know of a homeschooling family in our area that lives in a 1300 square foot single wide mobile home on 13 acres. The land and the mobile home are paid for. The family consists of the two parents plus TEN children. Living in a 1300 square foot home. I don't understand why they won't build something bigger, but I guess my point in recounting their story is that a smaller family certainly does not need 2,000 square feet if this huge family can get by with 1300.

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    1. Imagine the morning time bathroom brawls that go down in that household.

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  21. Anonymous4/14/2013

    This made me throw up a little.

    My Fiancee's ex survives on the child support he send each month for his two children, plus the 1,000 per child tax credit she gets each year (she has had FOUR more since they divorced), and additional government support. Her husband? The one with whom she had the next four children? Hasn't worked in the seven years I've known them. He's holding out for management position. They go on vacations, have luxuries that I can't even imagine. Every few months she sends requests from the state asking US (Yes, she wants a portion of MY income, too.) for more money. We don't have kids because we can't afford it, but they all just bought iphones, kids included.

    I heard that food stamps were now being accepted at some fast food places. The argument? Because people on food stamps need a treat or quick snack every now and then, too. No. No you don't. Eating crapping food is, first of all, not a treat. And secondly, if you do eat it, you should be able to afford it. Go to the grocery store. It's much cheaper to get fruits and veggies and some beans & rice than a meal at a restaurant. Oh, and my food co-op? They aren't legally allowed to accept food stamps. So, so, so enabling. Fast food okay, food co-op, no.

    What the hell is wrong with this country? How can anyone feel comfortable just taking and taking? I get that some people are legitimately in need of help, but COME ON. If you can't afford it, you don't get it.

    Rant over.

    ~Emily

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    1. Great, I barfed reading your comment, since the thought of another person throwing up makes me yak.

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    2. Anonymous4/16/2013

      I totally agree Emily! Recently I was at Walmart waiting in line behind a young couple with their 2 young children. They had two entire grocery carts full including toys and DVD's for the kids. As they used their food stamps and WIC to pay for groceries I noticed that one of their grocery carts was entirely full of junk food. I'm talking 6 cases of pop and 4 bags of chips!!! Now I don't know if the food stamps covered that or not. Even if they didn't cover the junk food if this couple could afford to buy all that then what are they doing on food stamps? So much of our government doesn't make sense. I'm all for helping people who need it but there is definitely a lot of waste as far as I can see!

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    3. Anonymous4/16/2013

      Agree, agree. That's the rub! I don't mind helping people, but for goodness' sake help yourselves first. I recall a friend telling me that she volunteered to donate and deliver a Thanksgiving turkey dinner to a needy family. A group of them arrived and felt as though the family lived better than they all did - satellite TV, nice furniture, etc. Now I don't expect folks to live in squander, but when you arrive on that kind of scene, you can't help but question if you're investing in the right kind of help.

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  22. Mellie4/15/2013

    While i get what you're saying, I guess I'm in the minority that doesn't think a 2,000 sq ft house is that large. The first home I bought on my own at 22 yrs old own was a brand new 2,200 sq ft split level with 3 bedrooms and 2 baths. It was tiny. As a single person, I outgrew it within a year. Add another person (plus a kid) and it was way too small. Since then my husband and I have aquired four homes (three vacation, one permanent residence) all 3,500 - 8,000 sq ft and we are constantly building more out buildings and buying ajoining acreage for all of them. I couldn't imagine going back to that dinky 2,200 sq ft home. My niece had three children (I say "had" because she was murdered in 2009 and her children now live with their fathers) and housing assistance paid for part of her rental home which was well over 2,000 sq ft in a state that has only two seasons. Her two youngest shared a bedroom but they had a nice sized, enclosed backyard to play. If they had been in a smaller home or apartment, those kids wouldve been on top of each other with no spare space for their toys or the nook she made for them to home school.

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    1. Anonymous4/16/2013

      Wow! Please do explain how you outgrew a 2200 sq ft house by yourself??? Our house is 1024 sq ft, 3 bed 2 bath (partially finished basement) and there's 3 of us, my husband, 3 year old and myself. Many days I feel spoiled with that! We have plenty of room now and plan on having more kids in our current house. I hope that we can move into a larger home on an acreage some day but by no means do I consider that "necessary" but rather a privilege! Let me assure you that there is plenty of room for toys and play room even when we have friends over. It sounds to me like it would do you good to step back and assess your life. You seem to be clouding the line between want and need. If you can afford 3500-8000 sq ft homes then you've probably worked hard for it (I sure hope so anyway!) so that's your right to buy what you can afford but don't mistake that for need. Surely your family could live with less if you had to and still be happy as more space and more toys is NOT what makes for happier kids in my experience! There is definitely a problem with our generation in believing that we deserve everything and we deserve to have it right now! The minute we're an adult we expect to have everything that our parents have worked hard to obtain for 30+ years because we're not willing to lower our standard of living from all the privileges we had growing up. Stepping off of my soap box now, thanks for listening!

      - Sarah

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    2. With you on that one, Sarah.

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  23. Super size me.

    How does one person outgrow a 3 bedroom 2,200 sq. ft. home? Hoarder tendencies?

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  24. Anonymous4/16/2013

    Most people have lost all sense of want vs. need. It's disappointing, embarrassing and just plain sad when you think about it. Have we really grown so "full of it" that we feel entitled to any and every thing? I'm all about helping the POOR, not those who masquerade as such.

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  25. Family of five in a 1600 sf ranch, 3 bedrooms, 1 1/2 baths. It is plenty of room...anyone who thinks otherwise has a lot of stuff. A lot of stuff costs a lot of money and you will never be debt free, house and all and thus always more vulnerable. We torched the mortgage on this house, our second, in six years. It was very hard and we had tiny kids so it was the best time to do it. A baby doesn't care where their clothes come from or how much is under the tree on the 25th. Sacrifices aplenty means security now. Worth it. We save aggressively and I can't imagine someone affording the bills on a bigger house than this at a third of our income. Impossible.

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Thanks for the note, check back for my response!