13 ms·

What is the alternative? These people aren't forced to live there. If there were a cheaper, better alternative available to them, they'd probably take it. Nobo

by darawk 11y ago

What is the alternative? These people aren't forced to live there. If there were a cheaper, better alternative available to them, they'd probably take it. Nobody is 'profiting from poverty' here. These landlords would make much more money if these people were wealthier! I'm sure they'd love to make nicer places and charge higher rents with higher margins, but they can't, because that's all these people can pay.

unclebucknasty 11y ago
>they'd love to make nicer places and charge higher rents with higher margins, but they can't, because that's all these people can pay Nicer places require larger capital outlays. The landlords chose their market, not the other way around.
- OJFord 11y ago
  > The landlords chose their market, not the other way > around. That goes against.. almost all economic thought. You don't choose to make umbrellas for the umbrella market, and just keep churning out umbrellas, perpetually disappointed by the fine weather. This market is profitable, but if it were wealthier, it would be more profitable. There's no incentive for a business-owner in such a place to somehow keep the locals in a state of poverty.
  - unclebucknasty 11y ago
    >You don't choose to make umbrellas for the umbrella market, and just keep churning out umbrellas, perpetually disappointed by the fine weather. You do if people keep buying them, irrespective of the weather. You've misread my comment. I'm not saying that the landlords create the market; simply that the landlords chose a market that requires less capital outlay, and also with full knowledge that the market is not typically upwardly mobile. In other words, it's fairly rare that landlords buy mobile parks with the intent of later upgrading their customers to upscale condominiums.
    - brightball 11y ago
      That is entirely the point though. If a landlord is about to chose a market that requires less capital outlay it's because there is an unfilled need in that market. Without the lower cost housing the tenants will only have fewer options, potentially more expensive ones at that. If all of the needs are filled and somebody else decides to target the market then they have to find a way to disrupt it, in this case that probably means figuring out how to reduce costs and charge less.
      - StanislavPetrov 11y ago
        Except your fantasy of a free real estate market doesn't exist. FED policies, by their own admission, serve to artificially drive up real estate prices, which punish the poorest, who don't own property and are forced to rent. This is a direct subsidy to property owners with the size of the subsidy equal to the amount of property owned. These FED efforts (MBS purchasing, ZIRP, suspension of MTM, QE1-3) to prop up housing also inflate equity and bond markets, further subsidizing the wealthy (while those in poverty who own no stocks or bonds fall further behind). So yes, people are profiting off of poverty.
        tamana 11y ago
        Fantasy or not, free to not, landlords don't control the Fed.
        collyw 11y ago
        Not sure about the Fed, but plenty of UK politicians own buy to let property, so hardly a free market when they have such vested interests in keeping prices high.
      - unclebucknasty 11y ago
        We've gotten off track. I'm not arguing whether the market exists or how basic economics in a perfect market work. If you look back at my original comment it's WRT the assertion that these landlords would love to upgrade their properties and charge higher rents. I was simply saying that's largely untrue. These landlords are aware of the market dynamics/demographic when choosing to invest and have little-to-no desire to "upgrade for higher margins".
  - massysett 11y ago
    If this market were wealthier it wouldn't exist. The tenants would be getting mortgages or renting nicer apartments, not living in trailer parks. And, because governments like to have higher income residents, they would have more choices of where to live, as trailer parks are exiled to the fringe. Some of these market dynamics exist precisely because these people are poor and the landlords have no incentive for their customers to be better off, just like Walmart would not be better off if its customers got more money and started going to Macys.
    - OJFord 11y ago
      > If this market were wealthier it wouldn't exist. The > tenants would be getting mortgages or renting nicer > apartments, not living in trailer parks. Which is what would make them more profitable.
      - pyrale 11y ago
        No, because the cost of building, maintaining and keep in a state of compliance a housing lot is superior to the increase in rent. Sleep dealing is a lucrative job. There are many factors explaining this : reduced access to law for the poorest, lack of alternatives, but also social perception of the tenants and of their worth, or the cognitive bias displayed by many about homo economicus.
toomuchtodo 11y ago
> What is the alternative? These people aren't forced to live there. If there were a cheaper, better alternative available to them, they'd probably take it. https://en.wikipedia.org/wiki/Housing_cooperative https://en.wikipedia.org/wiki/Housing_cooperative
- CydeWeys 11y ago
  You need money to buy into a housing cooperative, and even more to start one (i.e. build a whole new apartment building). The poor people who are renting the apartments in the linked article don't have it; they are living paycheck to paycheck, and frequently falling behind even on that. I'm not seeing a workable alternative beyond government-provided housing, but that doesn't have a good history of success in the US.
  - petra 11y ago
    Let's for a second assume that people stay in the same house for 30 years[1]. Why can't they just purchase the house cooperative slowly with each rent payment ? My grandma in Israel paid rent in a public housing that had exactly such an arrangement, and after becoming a pensioner, she was finally able to purchase her house. And i have no doubt such arrangements are one reason why Israel, a nation establshed from poor immigrants did quite well for both economically and socially for relatively long.
    - CydeWeys 11y ago
      The people in the linked article are frequently moving between housing, though. If they had thirty solid years of employment lined up they wouldn't be in their situation to begin with. What you're proposing is rent-to-own, which the vast majority of people would never make any headway on.
      - petra 11y ago
        What about adding something like transferable shares mechanism - so so you could use your ownership stake in another house if you want you need to move?
HillRat 11y ago
For some reason I'm reminded of the old joke: a Keynesian and a rat-ex theorist are walking down the street. "Look," says the Keynesian, "A twenty dollar bill!" "Can't be," says the other economist. "If it were there, someone would have picked it up already." Here's the thing: being a slumlord is profitable. Yes, your tenants don't pay much, but if you don't improve your property, ignore complaints, refuse basic maintenance and throw everyone on the street if they're a day late on the rent, your margins are excellent, far better than you'll make with decent apartments where people demand things like legally-conformant housing and nonabusive contracts. These are tenants who don't have recourse, or at least not easy recourse, to the legal system, so cold water flats, no A/C or furnaces, black mold, and rats and roaches are part and parcel of the slumlord experience. Of course, all this is illegal, but slumlords tend to have a lot of free cash to throw at local politicians and attorneys, and if they own a large number of single-family dwelling it's hard to track down and deal with every nonconformant property.
- tamana 11y ago
  You made a huge leap from "running a trailer park" to "being a slumlord", and you also implied but haven't answered the question of who is to pay for mold remediation etc when the tenants can't afford to make it profitable. Surely landlords can't be compelled into their own poverty , forced to rent units below cost. Such a price has to be paid by society/government overall, or not at all.
  - j1o1h1n 11y ago
    Forced to rent below cost, no, but if they can't make a profit out running a business that works within the law they shouldn't be engaging in the business.
  - HillRat 11y ago
    No one is forcing these property owners to "rent units below cost;" they set the rents on their houses and apartments. The issue is that many of these people buy properties that are out of code with no intent to improve them, and then rent them anyway. Yes, it's not economically-rational to rebuild them. No, it's not the government's fault that the slumlord's business model depends on flouting code and safety violations. The simple answer is that if I can't afford to maintain a minimal level of environmental and residential standards, I'm not allowed to rent out my property. Likewise, I can't buy an empty lot, fail to maintain it to code, and then offer a defense that it's too expensive to keep it up. Governmental police powers are quite adequate to compel compliance. All this is quite separate from the other point you bring up, which is that affordable and decent housing is going to require socializing costs. In fact, there's no reason government shouldn't engage in more public-private partnerships to help fund affordable housing as part of mixed-income residential planning. But I don't buy the argument that minimal living standards are an unwarranted intrusion on the liberty of rentiers -- and I dont think you do, either. If payday loans can be deemed predatory, can't "environmentally hazardous" rental units also be?
YeGoblynQueenne 11y ago
>> What is the alternative? These people aren't forced to live there. If there were a cheaper, better alternative available to them, they'd probably take it. What sort of lame excuse is that for exploitation? "These people could be much worse off if they were being exploited more"? Well, duh. The point is that they're in a dire situation in the first place because they're being exploited. Their landlord is not some benevolent benefactor, he or she is the purveyor of their misery, that's the only reason why he or she has a say in how deep that misery is. By analogy, imagine you grab someone off the street and beat the shit out of them. You break their ribs, kick their teeth in, bash in their skull, but stop just short of killing them. Then you go "hey, it could be much worse: I could have killed you". Well, yeah, you could have. You could also have avoided attacking them in the first place. They're not "better off" thanks to you, they're much worse off than they could have been because of you.
- thecopy 11y ago
  So what you are, in effect, saying, is that these poor people would be better off if the owner of the trailer park would kick them all out? Then they would not be "exploited". I am inclined to believe you are a troll, because the distinction between an aggression of violence and a voluntary free exchange on the market is quite easy to make, which in your argument you fail to do.
  - crdoconnor 11y ago
    If every time you took an ambulance you were forced to sign over 80% of your wealth or be left to die in the streets in a 'voluntary exchange', that would be exploitation. The difference between that and slumlords is simply a matter of degree. Desperation is the route to profit in both cases. Truly voluntary exchanges without gaping chasms of systemic inequality do not provide opportunities for sustained profit.
    - thecopy 11y ago
      I get the point in your scenario. The simple matter of "degree" in this case might be simple but it is very big. First of all, i would say that your scenario is unrealistic. It is made up and it would never happen in actual real life. First of all, what psychopaths would leave a dying man, woman or child like that? Also, how would these ambulances get customers? Thirdly, who would sign up for their ambulance service? Yes, if we accept your premise of a society where this psychopath ambulance service has a monopoly and everyone is forced to use it, then sure, it is exploitation. But on the other hand, someone with authority has therefore sanctioned this psychopath monopoly ambulance service. Where did this authority get this mandate? Democracy? If you want to argue that this scenario would happen on the free market, i would like to see your arguments to why this ambulance service would still have customers. If you control the premise of the arguments, it is easy to "win".

by darawk 11y ago

unclebucknasty 11y ago

>they'd love to make nicer places and charge higher rents with higher margins, but they can't, because that's all these people can pay Nicer places require larger capital outlays. The landlords chose their market, not the other way around.

OJFord 11y ago
> The landlords chose their market, not the other way > around. That goes against.. almost all economic thought. You don't choose to make umbrellas for the umbrella market, and just keep churning out umbrellas, perpetually disappointed by the fine weather. This market is profitable, but if it were wealthier, it would be more profitable. There's no incentive for a business-owner in such a place to somehow keep the locals in a state of poverty.
- unclebucknasty 11y ago
  >You don't choose to make umbrellas for the umbrella market, and just keep churning out umbrellas, perpetually disappointed by the fine weather. You do if people keep buying them, irrespective of the weather. You've misread my comment. I'm not saying that the landlords create the market; simply that the landlords chose a market that requires less capital outlay, and also with full knowledge that the market is not typically upwardly mobile. In other words, it's fairly rare that landlords buy mobile parks with the intent of later upgrading their customers to upscale condominiums.
  - brightball 11y ago
    That is entirely the point though. If a landlord is about to chose a market that requires less capital outlay it's because there is an unfilled need in that market. Without the lower cost housing the tenants will only have fewer options, potentially more expensive ones at that. If all of the needs are filled and somebody else decides to target the market then they have to find a way to disrupt it, in this case that probably means figuring out how to reduce costs and charge less.
    - StanislavPetrov 11y ago
      Except your fantasy of a free real estate market doesn't exist. FED policies, by their own admission, serve to artificially drive up real estate prices, which punish the poorest, who don't own property and are forced to rent. This is a direct subsidy to property owners with the size of the subsidy equal to the amount of property owned. These FED efforts (MBS purchasing, ZIRP, suspension of MTM, QE1-3) to prop up housing also inflate equity and bond markets, further subsidizing the wealthy (while those in poverty who own no stocks or bonds fall further behind). So yes, people are profiting off of poverty.
      - tamana 11y ago
        Fantasy or not, free to not, landlords don't control the Fed.
        collyw 11y ago
        Not sure about the Fed, but plenty of UK politicians own buy to let property, so hardly a free market when they have such vested interests in keeping prices high.
    - unclebucknasty 11y ago
      We've gotten off track. I'm not arguing whether the market exists or how basic economics in a perfect market work. If you look back at my original comment it's WRT the assertion that these landlords would love to upgrade their properties and charge higher rents. I was simply saying that's largely untrue. These landlords are aware of the market dynamics/demographic when choosing to invest and have little-to-no desire to "upgrade for higher margins".
- massysett 11y ago
  If this market were wealthier it wouldn't exist. The tenants would be getting mortgages or renting nicer apartments, not living in trailer parks. And, because governments like to have higher income residents, they would have more choices of where to live, as trailer parks are exiled to the fringe. Some of these market dynamics exist precisely because these people are poor and the landlords have no incentive for their customers to be better off, just like Walmart would not be better off if its customers got more money and started going to Macys.
  - OJFord 11y ago
    > If this market were wealthier it wouldn't exist. The > tenants would be getting mortgages or renting nicer > apartments, not living in trailer parks. Which is what would make them more profitable.
    - pyrale 11y ago
      No, because the cost of building, maintaining and keep in a state of compliance a housing lot is superior to the increase in rent. Sleep dealing is a lucrative job. There are many factors explaining this : reduced access to law for the poorest, lack of alternatives, but also social perception of the tenants and of their worth, or the cognitive bias displayed by many about homo economicus.

toomuchtodo 11y ago

> What is the alternative? These people aren't forced to live there. If there were a cheaper, better alternative available to them, they'd probably take it. https://en.wikipedia.org/wiki/Housing_cooperative https://en.wikipedia.org/wiki/Housing_cooperative

CydeWeys 11y ago
You need money to buy into a housing cooperative, and even more to start one (i.e. build a whole new apartment building). The poor people who are renting the apartments in the linked article don't have it; they are living paycheck to paycheck, and frequently falling behind even on that. I'm not seeing a workable alternative beyond government-provided housing, but that doesn't have a good history of success in the US.
- petra 11y ago
  Let's for a second assume that people stay in the same house for 30 years[1]. Why can't they just purchase the house cooperative slowly with each rent payment ? My grandma in Israel paid rent in a public housing that had exactly such an arrangement, and after becoming a pensioner, she was finally able to purchase her house. And i have no doubt such arrangements are one reason why Israel, a nation establshed from poor immigrants did quite well for both economically and socially for relatively long.
  - CydeWeys 11y ago
    The people in the linked article are frequently moving between housing, though. If they had thirty solid years of employment lined up they wouldn't be in their situation to begin with. What you're proposing is rent-to-own, which the vast majority of people would never make any headway on.
    - petra 11y ago
      What about adding something like transferable shares mechanism - so so you could use your ownership stake in another house if you want you need to move?

HillRat 11y ago

For some reason I'm reminded of the old joke: a Keynesian and a rat-ex theorist are walking down the street. "Look," says the Keynesian, "A twenty dollar bill!" "Can't be," says the other economist. "If it were there, someone would have picked it up already." Here's the thing: being a slumlord is profitable. Yes, your tenants don't pay much, but if you don't improve your property, ignore complaints, refuse basic maintenance and throw everyone on the street if they're a day late on the rent, your margins are excellent, far better than you'll make with decent apartments where people demand things like legally-conformant housing and nonabusive contracts. These are tenants who don't have recourse, or at least not easy recourse, to the legal system, so cold water flats, no A/C or furnaces, black mold, and rats and roaches are part and parcel of the slumlord experience. Of course, all this is illegal, but slumlords tend to have a lot of free cash to throw at local politicians and attorneys, and if they own a large number of single-family dwelling it's hard to track down and deal with every nonconformant property.

tamana 11y ago
You made a huge leap from "running a trailer park" to "being a slumlord", and you also implied but haven't answered the question of who is to pay for mold remediation etc when the tenants can't afford to make it profitable. Surely landlords can't be compelled into their own poverty , forced to rent units below cost. Such a price has to be paid by society/government overall, or not at all.
- j1o1h1n 11y ago
  Forced to rent below cost, no, but if they can't make a profit out running a business that works within the law they shouldn't be engaging in the business.
- HillRat 11y ago
  No one is forcing these property owners to "rent units below cost;" they set the rents on their houses and apartments. The issue is that many of these people buy properties that are out of code with no intent to improve them, and then rent them anyway. Yes, it's not economically-rational to rebuild them. No, it's not the government's fault that the slumlord's business model depends on flouting code and safety violations. The simple answer is that if I can't afford to maintain a minimal level of environmental and residential standards, I'm not allowed to rent out my property. Likewise, I can't buy an empty lot, fail to maintain it to code, and then offer a defense that it's too expensive to keep it up. Governmental police powers are quite adequate to compel compliance. All this is quite separate from the other point you bring up, which is that affordable and decent housing is going to require socializing costs. In fact, there's no reason government shouldn't engage in more public-private partnerships to help fund affordable housing as part of mixed-income residential planning. But I don't buy the argument that minimal living standards are an unwarranted intrusion on the liberty of rentiers -- and I dont think you do, either. If payday loans can be deemed predatory, can't "environmentally hazardous" rental units also be?

YeGoblynQueenne 11y ago

>> What is the alternative? These people aren't forced to live there. If there were a cheaper, better alternative available to them, they'd probably take it. What sort of lame excuse is that for exploitation? "These people could be much worse off if they were being exploited more"? Well, duh. The point is that they're in a dire situation in the first place because they're being exploited. Their landlord is not some benevolent benefactor, he or she is the purveyor of their misery, that's the only reason why he or she has a say in how deep that misery is. By analogy, imagine you grab someone off the street and beat the shit out of them. You break their ribs, kick their teeth in, bash in their skull, but stop just short of killing them. Then you go "hey, it could be much worse: I could have killed you". Well, yeah, you could have. You could also have avoided attacking them in the first place. They're not "better off" thanks to you, they're much worse off than they could have been because of you.

thecopy 11y ago
So what you are, in effect, saying, is that these poor people would be better off if the owner of the trailer park would kick them all out? Then they would not be "exploited". I am inclined to believe you are a troll, because the distinction between an aggression of violence and a voluntary free exchange on the market is quite easy to make, which in your argument you fail to do.
- crdoconnor 11y ago
  If every time you took an ambulance you were forced to sign over 80% of your wealth or be left to die in the streets in a 'voluntary exchange', that would be exploitation. The difference between that and slumlords is simply a matter of degree. Desperation is the route to profit in both cases. Truly voluntary exchanges without gaping chasms of systemic inequality do not provide opportunities for sustained profit.
  - thecopy 11y ago
    I get the point in your scenario. The simple matter of "degree" in this case might be simple but it is very big. First of all, i would say that your scenario is unrealistic. It is made up and it would never happen in actual real life. First of all, what psychopaths would leave a dying man, woman or child like that? Also, how would these ambulances get customers? Thirdly, who would sign up for their ambulance service? Yes, if we accept your premise of a society where this psychopath ambulance service has a monopoly and everyone is forced to use it, then sure, it is exploitation. But on the other hand, someone with authority has therefore sanctioned this psychopath monopoly ambulance service. Where did this authority get this mandate? Democracy? If you want to argue that this scenario would happen on the free market, i would like to see your arguments to why this ambulance service would still have customers. If you control the premise of the arguments, it is easy to "win".