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ByJoshBoak TheAssociatedPress WASHINGTON It'sthenew career trade-off: Around the country, ar- eas with the strongest job markets increasingly have some of the costliest homes. And areas with the most af- fordable homes lack a solid base of middle class jobs that attract workers. College graduates and younger families have been clustering in coastal cities such as New York, San Fran- cisco and Seattle, where in- comes are generally am- ple and solid middle-class jobs plentiful. Yet studies and government data show that homes in these areas have become prohibitively expensive. The result is that the dream of home ownership for many is proving frus- trating, being deferred or abandoned, even for people with comfortable incomes. "This great mismatch is hurting middle class people who would like to be home- owners," said Nela Richard- son, chief economist at the real estate brokerage Red- fin. Roughly 40 percent of households in New York, San Francisco, Seattle, parts of Connecticut and Colorado, and Washing- ton, D.C., earn more than $100,000 annually, com- pared with just 22 percent nationwide, according to the Census Bureau. Areas that do offer inex- pensive housing across the Midwest's industrial corri- dor — Akron, Ohio, say, or Fort Wayne, Indiana — lack the same breadth of career possibilities. This trend has likely helped hold back U.S. eco- nomic growth. Cities with the strongest job markets would grow even faster if more people could afford to live there, noted Jed Kolko, chief economist at the on- line real estate firm Trulia. The additional population would help spur further job growth, which, in turn, would strengthen the local economy and foster more middle-class jobs. Two factors are getting in the way. Tighter credit has made it harder to buy a home in the costliest areas with a down payment of under 10 percent. Leading up to the re- cession, mortgages with no or low down payments reached destructive ex- cesses. Yet first-time buy- ers who have stable in- comes are struggling to af- ford homes without these options, noted Nela Rich- ardson, chief economist at the real estate brokerage Redfin. Second, construction is running well below its pace from a decade ago. The gov- ernment reports that build- ers are on pace to construct 1.02 million homes this year — about half the pace that prevailed in the early 1970s, when the oldest baby boom- ers were beginning careers. Young adults continue to stream into many of the top job-generating areas de- spite the daunting housing costs. Nearly 52 percent of people who moved to the Bay Area over the past 12 months were millennials, according to Zillow. Simi- larly high percentages ex- ist in New York City, Seattle, Denver and Washington. Nationally, home prices are generally three times the size of annual incomes. Yet that ratio ranges from 3.5-to-1 in Washington to 7.1-to-1 in San Francisco. The challenge of shifting from rentals to ownership has become more problem- atic, particularly as younger workers look to marry and raise children. Affordable housing still exists, of course, in many areas. Millennials have the money to buy nearly 80 percent of homes available in Akron, Ohio, and Roch- ester, New York, according to Trulia. Several Texas cit- ies, buoyed by the energy boom, offer both decent salaries and home owner- ship. But most affordable areas lack substantial job opportunities. Based on income, a typ- ical family buying in Fort Wayne, Indiana, can spend less than 10 percent of their income on monthly mort- gage payments. But at the same time, gov- ernment figures show that Fort Wayne has roughly the same number of jobs now as before the recession began in 2007, meaning that bargain- priced homes haven't fueled a surge of job-seekers. In the hottest job mar- kets, buyers typically brace for bidding wars and settle for less than they hoped. When Jen Ewing left New York City two years ago, she figured housing would be reasonable in Se- attle, where her husband had taken a job as a man- ager with Expedia. "We thought we could get a beautiful four-bed- room house with a view," said Ewing, 38. "Then we got here, and that wasn't realistic at all." They found a cute house on a quiet street and of- fered 10 percent above the asking price, only to learn that theirs was the lowest of six bids. For just under $500,000, they re- cently closed on a three- bedroom house a couple of blocks from a school for their two sons. Unaffordable cities could relieve the price pressures by building more homes. A greater supply would cause prices to fall. But there are restrictions on construc- tion. Some are geographic: Manhattan is a slender is- land. Seattle borders Puget Sound. Others are regu- latory: Boulder adopted a slow-growth policy in the 1970s. San Francisco has refrained from building upward in ways that could block views of the bay. Seattle real estate broker Tyler McKenzie expects the squeeze to tighten as com- panies in high-priced mar- kets add jobs, saying Am- azon's expansion is adding thousands of jobs to the city. "We have as little (home) inventory as I've seen in my lifetime — and I'm over 50," McKenzie said. DREAM OF OWNERSHIP Ar ea s wi th g oo d jo bs h av e co st li es t ho me s ELAINETHOMPSON—THEASSOCIATEDPRESS Jennifer Ewing, second right, and her husband Florian Thiel pose with their children Max, le , 3, and Felix, 8-months, outside their new home in Seattle's Ballard neighborhood. The couple recently closed on the three-bedroom house , which cost slightly less than $500,000. They moved to Seattle from New York, another city that matches the pattern of high-income jobs and even more expensive housing. By Stephen Ohlemacher The Associated Press WASHINGTON The IRS paid at least $6 billion in child tax credits in 2013 to people who weren't eligi- ble to receive them, a gov- ernment investigator said Tuesday. Payments went to fam- ilies that mistakenly claimed the tax credit or claimed the wrong amount, as well as taxpay- ers who committed fraud, according to an audit by J. Russell George, the Trea- sury inspector general for tax administration. The audit highlights problems with a tax credit that President Barack Obama has championed as a way to help low-income working families. Obama's 2009 economic stimulus package tempo- rarily expanded the credit to more families that don't make enough money to pay federal income tax. The ex- panded credit expires at the end of 2017. These families receive the $1,000-per-child credit in the form of a tax refund. The report released Tues- day focused on payments to these families. For years the IRS has said the risk is low for im- proper payments related to the child tax credit. The re- port says that assessment is incorrect. "It is imperative that the IRS take action to identify and address all of its pro- grams that are at high risk for improper payments," George said in a statement. In a statement, the IRS aid it "continues to aggres- sively explore new ways to detect and stop potentially fraudulent claims while maximizing the use of lim- ited compliance resources." However, the agency said budget cuts are hurt- ing compliance efforts. "IRS funding limitations severely hamper our efforts on these and other compli- ance areas," the agency statement said. "Since 2010, the IRS budget has been reduced by $850 mil- lion and we have 13,000 fewer employees." Earlier this year, the IRS said fewer agents are au- diting tax returns than at any time since at least the 1980s. More than 36 million families claimed about $57 billion in child tax credits in 2013, according to the nonpartisan Joint Com- mittee on Taxation. The inspector general's report estimates that tax- payers improperly claimed between $5.9 billion and $7.1 billion in child tax credits that year. The re- port, however, does distin- guish between fraud and credits that were claimed by mistake. 2009 STIMULUS PACKAGE IG: IRS paid $6 billion in bogus child tax credits "It is imperative that the IRS take action to identify and address all of its programs that are at high risk for improper payments." — J. Russell George, Treasury inspector general By Jeff Barnard The Associated Press GRANTS PASS, ORE. Ernest Brace, a civilian who was captured during the Viet- nam War while flying sup- plies for the CIA and who later tapped code through a wall to fellow prisoner John McCain, has died. He was 83. Brace died of a pulmo- nary embolism on Friday in Klamath Falls, Oregon, where he retired in 1989, his family said. "He never wanted to leave a door unopened," his son, Michael Brace, said. "He just loved adventure." McCain, a Republican U.S. senator representing Arizona, said he was deeply saddened by the death of his friend and fellow POW. "As the longest-held American civilian pris- oner detained for nearly eight years in Vietnam, Er- nie endured more cruelty and severe torture than any other captive during the Vietnam War," McCain said in a statement. "We de- veloped a special bond that strengthened us both at a difficult time, helping us to survive together." Born in Detroit, Brace joined the Marine Corps at age 16. After three years, he had learned to fly and made 2nd lieutenant. He won a Distinguished Flying Cross after being shot down dur- ing a bombing raid in the Korean War. In 1961, Brace was court martialed for leaving the scene of a training flight crash. He went on to fly helicopters for Bird & Son, a private company under contract to the Central In- telligence Agency, carrying personnel and supplies into Laos. He was captured in 1965 after landing his helicop- ter on a dry rice paddy in northern Laos. "I saw a guy standing out there with a big automatic rifle with a bipod at one end," Brace told The Associ- ated Press in 2000. "He had his fist up in the air. I smiled at him and shut down." For the next 3 years, North Vietnamese regulars held Brace in a bamboo cage outside Dien Bien Phu — his hands tied, neck in a noose and feet in stocks. After an escape attempt, he was buried up to his neck for a week. In October 1968, his cap- tors drove Brace to a prison outside Hanoi known as The Plantation. On the sec- ond morning, he heard a tapping on the wall, the rhythm to "shave and a haircut." Brace replied with two taps for "two bits." Brace scooted away from the wall after hearing more tapping,thinkingguardshad set him up. Then a slow tap- pingbegan.Bracedeciphered a message to put his ear to the wall and for the first time heard the voice of McCain, a captured Navy pilot. Brace was released at the end of the war in 1973. He didn't actually meet Mc- Cain until a White House reception for POWs later that year. Brace later worked for Evergreen International Airlines in Saigon and Sikorsky Aircraft in China. In 2000, he volunteered for McCain's presidential cam- paign, though Brace's wife supported George W. Bush. ERNEST BRACE Civilian POW in Vietnam dies THE ASSOCIATED PRESS FILE Adm. Noel Gayler, right, welcomes Ernest G. Brave on his arrival in Tokyo from Hanoi. PineStreetPlaza 332 Pine Street, Suite G Red Bluff, CA (800) 843-4271 Every Wednesday December 17th Stacy Garcia, Hearing Aid Dispenser Lic. 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