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American Trailer Parks: The owners are getting rich

143 points by striking 11y ago

cpr 11y ago
I'm as big a capitalist as anyone, but, boy, reading that made me want to go out and buy a bunch of trailer parks just to lower the rent and lessen the squeeze on these poor folks. Sad!
binarray2000 11y ago
What a perversion! The richest country in the world celebrates trailer parks. Even "upscale trailer parks". OK, one has to admit, it is an improvement over tent cities. No wonder these exist. When you're giving hundreds of billions to gamblers and nothing for social housing you get "ghetto" areas which even police avoids. You officially live in a free country and you surely can go into those areas but it's questionable if you'll come back with your life and your possesions.
- smoyer 11y ago
  As a clarification, I just want to make sure that by "gamblers" you were referring to the various Wall-Street one-percenters who repeatedly rape our economy. I don't mind millionaires (or billionaires) who actually produce something but it's aggravating that someone can take such a large percentage of the profit by simply shuffling money around. I don't buy the "it creates market liquidity" argument for one minute ... we'd find the liquidity the market needs elsewhere.
  - binarray2000 11y ago
    Upvoted. Yes. And I agree: As long someone is producing value she is contributing to the society.
- autokad 11y ago
  honestly speaking, I lived in both and I'd rather walk through a trailer park any day than an area of 'social housing'. there was no 'giving hundreds of billions to gamblers' going on that I am aware of. The financial bailout was necessary, though not implemented terrifically, but the US/tax payers did make a healthy profit off the whole thing. trailer parks aren't as profitable as made out to be in the article. sure, a few success stories. a high % of people in them do not pay their rent, and its very hard to make them leave when they do not - especially since you'd have to kick out half the park. don't believe me? the number of people living in trailer parks is down significantly from the 1970s, when the rates were over 10%. In fact, had their 'financial crisis' story held up, there would be more people living in trailer parks today than in 2000, that's not true. lots of trailer parks began drying up with access to FHA loans and low inflation. There's really not a good reason to own a trailer @350/month + paying real estate taxes (yeah, cities tax them AND the land under them) when you can buy a home and pay around 300-500/month in mortgage.
- driverdan 11y ago
  > The richest country in the world celebrates trailer parks. So what? The only difference between a trailer home and a traditional home is one is built on a frame that can be moved and the other has a fixed location with a foundation. What's wrong with that?
  - bkeroack 11y ago
    No, the real difference is that trailers depreciate over time, while houses (and property) appreciate. Mobile homes--when purchased--are not an investment in the same way real estate is. Think of them more like automobiles that wear out and eventually have to be replaced.
    - ArkyBeagle 11y ago
      Actual homes depreciate too - it's just the land that may go up in value.
      - Spooky23 11y ago
        Houses are a capital asset, they get maintained and you can borrow against them to improve. Newer houses may be different, as the standard of construction in many cases is pretty awful these days. Trailers are cars with beds. They only go down.
        jessaustin 11y ago
        Are you European? American houses simply aren't as well-built as houses you might be used to, and they never have been. Sure, history is the reason why we don't have any 500yo houses. One might wonder, however, why we don't have any 100yo houses. Any that do exist are on a historical register, because they are rare. The reason is stick-and-mud quick construction methods. This is actually a perfectly reasonable practice, as Americans move around quite a bit. Some of the crappiest 80yo houses I've seen were in Toledo OH and Detroit MI, two cities that don't actually need much century-old housing. But that sort of thing exists everywhere, and in many places is regularly torn down and replaced with new buildings that will also be torn down within the lifetimes of many people living today.
danbruc 11y ago
Getting even richer by taking from the poorest. Disgusting.
- pinky1417 11y ago
  They're not taking from the poorest, they're selling to them. People in low income brackets use services and pay for them, just like everyone else in a market economy. As a society, we need to stop acting like every business that deals with the poor is inherently evil. Sure, such businesses can have unethical practices, but simply charging people for goods or services isn't one of those practices.
  - danbruc 11y ago
    I was not talking about poor people paying for what they need and consume, I was talking about rich people investing in trailer parks just to get richer. They invest with the sole purpose of getting more money back then they put it, taking the difference from the poor.
    - strathmeyer 11y ago
      Yes dan that is how money works. You'd rather the poor have no place to live??
      - justincormack 11y ago
        These people are not building anything, there are the same amount of houses before and after they buy them.
PythonicAlpha 11y ago
The big success of today's capitalistic system is indicated by the fact, that it even draws profits from the calamities of the people. When I add the "globalization" situation (marginal wages for poor people in poorest countries, that oftentimes even are at the limit of starving in these countries, for the production of our goods), than it is not even seldom today, that this system draws its profits from poorest peoples. It is said, that Henry Ford understood that for him to succeed, he also must help others to succeed. He and other big entrepreneurs laid the foundation for today's wealth of the western nations. Currently the system seems to have changed, by teaching people how to let others fail for the own success. I don't think, that the current system is sustainable. Even Warren Buffet said that his class is winning, but it should not. I think, in the long run, we will all loose this way.
ZanyProgrammer 11y ago
They are sorta trendy here in the Bay, since they offer the appeal of home ownership (of sorts) without the hassle of, you know, buying an actual home. I lived in one in Sunnyvale with a roommate for a few years, and my experience was a bit mixed. The biggest beef was that the gate next to the light rail stop locked both opening and closing, so if you lost your key, you had to walk all the way around to Tasman (paranoid suburbanites about crime). That said, I still think a condo or townhouse is a better deal.
EliRivers 11y ago
he sent a letter to every tenant at that park in Grapevine, Texas, telling them the rent was going to more than double but was still below the market rate of $325. “If you don’t like this or you think you can do better, here’s a list of all the other parks in Grapevine and a list of the owners,” he said in the letter. “Go ahead, call them if you want to move. How many customers do you think we lost? Zero. Where were they going to go?” Says it all. When you've got a captive market, you can squeeze them for every nickel they have. You only have to leave them with just enough money such that they won't give up completely (although that's worth doing a few times; if they do just give up, you evict them and replace them, and the new tenants are paying the higher rate, and soon enough you've covered the costs of eviction and are making a higher profit).
- sliverstorm 11y ago
  Come now, you've dropped the context for that quote. he sent a letter to every tenant at that park in Grapevine, Texas, telling them the rent was going to more than double but was still below the market rate of $325. “If you don’t like this or you think you can do better, here’s a list of all the other parks in Grapevine and a list of the owners,” he said in the letter. “Go ahead, call them if you want to move. How many customers do you think we lost? Zero. Where were they going to go?”
Someone 11y ago
"Equity LifeStyle Properties (ELS) is the largest mobile home park owner in America, with controlling interests in nearly 140,000 parks. In 2014, ELS made $777m in revenue, helping boost Zell’s near-$5bn fortune." They may be despicable, but I don't understand how these numbers support that claim. $777m revenue over, say, 70,000 parks (taking 'controlling interest' as '50% ownership') is around $10,000 in _revenue_ per year, per _park_. It also doesn't seem consistent with those $300 a month rents. So, please elucidate me. Do I misunderstand those numbers? How large is a typical trailer park? Does rent include a trailer or do you have to bring one on your own?
- klank 11y ago
  The author of the article got their numbers mixed up. ELS only has ~370 communities. The 140,000 is accurate but is the number of individual sites/lots which that ~370 communities represent.
methodover 11y ago
I'm so torn on this. So, if I understand this correctly, this is how to get rich off renting to poor people: (1) Buy out a property where a bunch of poor people live, (2) Jack the rent up, (3) Justify it with superficial renovations. It works because (1) the cost of moving is so high, and (2) all the other property owners are doing the same thing -- In fact, that's probably why they're doing this "university" to begin with. On the one hand, this looks totally immoral. Poor people are forced to move out, or become even more impoverished, as a result of what you're doing. And it seems like the renovations are really just superficial -- they're designed to make people think "Oh, well they're doing renovations, so the property is worth more." Rather than a genuine, good-faith attempt at improving the properties in a way that the poor tenants can afford. But on the other hand, this is capitalism. Oftentimes in capitalism, things look really, really bad. But from a macro point of view, things work out better in the long run. Could there be some kind of better long-term effect that I just can't see? And yet, criticisms aside, I don't know if any municipality in the country has figured out a good solution from the regulation side of things. In fact, I'm skeptical if regulation can solve this problem. It feels like greedy slumlords are just going to be greedy slumlords no matter what rules we put into place. Maybe the real solution is to just, like, persuade greedy slumlords to think of tenants as real, living, breathing human beings instead of cattle.
- ZanyProgrammer 11y ago
  Rent control for mobile home parks.
- dsr_ 11y ago
  I have an answer. Buy the trailer park. Sell it to the tenants. Their rent payments become mortgage payments, in effect. When they finish buying the property en masse, it becomes controlled by a tenant-run cooperative. This is, obviously, a money-losing proposition for whoever buys the trailer park in the first place. That's why it should probably be a government entity. If the trailer park residents can do it by themselves -- and in several locations, they have -- that's great. But it would be preferable to have self-owned communities over slums, even if you have to have the government provide the initial loan and organization. Is it socialism? Sure. The good kind.
knowaveragejoe 11y ago
So what's the surprise here? The economics of a trailer park are lucrative for landlords?
- intopieces 11y ago
  "They’ve got to live somewhere, so you combine them in a certain place. They don’t go out to hurt people. I think it’s a community service, because if not they will be in your neighbourhood. Now they’re all in one place, you can watch them all in one place. And they pay well and won’t mess things up. I mean, why would you not? I think it’s a brilliant idea." The surprise here is that the ghettoization of identifiable groups is not unintentional; in fact, it's planned.
startupfounder 11y ago
On the surface this is a story about trailer parks and the rich profiting from captive renters, but I think the bigger story is this: "He quotes US government statistics showing that in 2013, 39% of Americans earned less than $20,000 – less than the government’s poverty threshold income of $20,090 for a three-person household." 39% means (Edit: 48,000,000 not 125,162,700, thanks @beachstartup) Americans are living below the poverty line! When you don't have options then you will be taken advantage of. Our system is failing us, our government is failing us, our fellow Americans are failing us and we the community of Hacker News are failing us. How do we disrupt poverty (in the USA and globally), disrupt failing governments and disrupt failing communities? It seems as if our biggest downfall as humans is we don't see how what we do as individuals impacts everyone else and we are all dying deaths of 1b stings. "my carbon doesn't matter", "my investments don't matter", "my food doesn't matter", "my lifestyle doesn't matter", "my impact is so finite", "I'm just one person", etc.
- beachstartup 11y ago
  i'll tell you why you're being downvoted, it's because your reading comprehension is subpar and you don't have a grip on reality with your hyperbolic claims. 20k for a 3-person household is a lot different than an individual earning under 20k which is where your numbers come from. in fact it's about 200% different. 39% or 125 million americans do not live in poverty. the real number is still shitty, but it's not nearly half, it's closer to 20%, or in statistical terms the bottom quintile, which is pretty much what you would expect given the nature of the US economy/politics. http://money.cnn.com/2014/10/16/news/economy/48-million-americans-poverty-census-bureau/ http://money.cnn.com/2014/10/16/news/economy/48-million-amer...
  - brandonmenc 11y ago
    This is why people are supposed to pool together - whether as extended families living under the same roof, or a bunch of friends all pitching in on rent. Unfortunately, too many people refuse to live like that.
  - deleted 11y ago
    [deleted]
lotharbot 11y ago
The big surprise for me in this article was that housing sex offenders was such an effective way to get rid of drug dealers. Sex offenders bring attention from the police, media, and ordinary citizens, and drug dealers don't want to be near all that attention.
- cldellow 11y ago
  The original article glossed over this, IMO. The linked Orlando Weekly article [32804] about Lake Shore Village explains that it's the sex offenders themselves who chase off the criminal element. The gist was that they consider themselves to be sufficiently hounded and they don't need their lives complicated by incidental criminal acts. In fact, there are so few places for sex offenders to live (given the 1,000 foot minimum distance requirements) that they are eager to protect those few areas they can call home. [32804]: http://www.orlandoweekly.com/orlando/the-scarlet-letter/Content?oid=2256113 http://www.orlandoweekly.com/orlando/the-scarlet-letter/Cont...
mkempe 11y ago
One of the elements that enables the perpetuation of this system is the food-stamp program. The landlords are counting on it. If some of these people did not get food stamps they would starve to try to pay the rising rent. People would leave or violently rebel, not starve for the sake of a landlord who decides to raise the rent 50%.
ari_ 11y ago
I have been to boot camp. I speak to a lot of mobile home park owners. When frank talks about raising rent, it's typically because the parks are mismanaged by people who don't know what they are doing. In areas where there are multiple parks, rents hit a plateu because of competition. The other issue, not mentioned here, is that it's really hard to build a new park. No city wants them so they won't allow them. Effectively there is a cap on supply and demand is growing.
crdoconnor 11y ago
https://en.wikipedia.org/wiki/Land_value_tax https://en.wikipedia.org/wiki/Land_value_tax ^^ This would ensure that nobody got wealthy from doing this type of thing, ever. If you don't have a land value tax (or its cousin, property tax), the land value is still taxed, it's just that it's called rent instead. Instead of the stream of income ending up as a social security payment or building a school, it ends up bidding up the price of a Manhattan condo or buying a yacht.
- Spooky23 11y ago
  What's the difference between this and property tax? Commercial property rates are generally determined by rents.
  - crdoconnor 11y ago
    Property tax is assessed based upon on the value of the property, which is often in large part determined by the value of the land it is built upon. Same house in SF and the Midwest - the Midwest one is 5x cheaper. ~80% of the value of the house is the value of the land. LVT is a tax that is intended to tax 100% of the value of the land and 0% of the value of the property built upon it, so in theory the house in the midwest would cost the same as the one in SF, but the tax you'd pay to live in SF would be higher. Property tax would discourage this type of behavior (which is good). LVT would eliminate it entirely.
mixmastamyk 11y ago
Not surprising. I once looked into trailer/camper housing to save money... Turns out the combined rent was about 80% the cost of an apartment, with vastly reduced choice of living location. Didn't seem worth it.
joering2 11y ago
Mandatory read about an old nice and innocent man with an ice-cream cone... http://www.publicintegrity.org/2015/04/03/17024/warren-buffetts-mobile-home-empire-preys-poor http://www.publicintegrity.org/2015/04/03/17024/warren-buffe...
ufmace 11y ago
What I start thinking after reading that is - how could an individual investor do this in a way that felt/seemed less sleazy and might actually help people? Most people's go-to seems to be to try to keep the rent low, but that doesn't really accomplish anything but keeping the same people in the same slightly less grinding poverty for the rest of their lives. What if you raised the rent like they say, but put some of the money towards some kind of education or life-counseling class on-premises instead of just pocketing it all? I thought of that when I remembered a recent discussion on debt collectors where one collector decided that, instead of just hounding and threatening the debtors with dire consequences, they would actually help them make more money to pay the debits by giving them career counseling, resume help, interview practice, help finding jobs they could do, etc. You get your money and improve their lives at the same time. Why not try the same thing here? I bet a lot of the people there could be making more money if there was somebody there to teach them things, train them in new skills, help them out with logistics, transportation, contacts, etc. Why not dream up new ways to help them instead of new ways to fuck them over?
- paintrayne 11y ago
  The answer you are looking for is higher taxes on the owners of trailer parks to fund universal education, not higher rents on the people who live in trailer parks.
anti-shill 11y ago
I live in an equity lifestyles mobile home park near denver. My job pays me income in the 87th percentile of all workers in america. Not a sex offender park here. The article does not mention it of course but the reason parks and apartment landlords are able to rip off the poor is because the zoning laws all over america have closed off the opportunity to build more mobile home parks and cheap apartments. The fact that over 50% of all voters live in their own homes means that the politicians are able to sell themselves out to landlords and create zoning laws that prevent developing land that would allow placement of mobile homes. It's all about driving up property values and exploiting those who are at the bottom. America is not really about the american dream of capitalism and entrepreneurship. The american dream of about using the government to put the squeeze on the unprotected ones. I would go further and comment on trailer park demographics, but I don't want to get downvoted.
- blisterpeanuts 11y ago
  Interesting points, anti-shill. In this vast country which even today is mostly empty land especially in the great Southwest, the West, and many parts of the interior, surely it's possible to do something about this terrible housing problem we have, where tens of millions can't even dream of owning their own homes. I would think that investors could make a reasonable profit building a gleaming new city with thousands of affordable homes, not fancy or luxury but stand-alone structures with garage and yard, what used to be considered the American dream of home ownership, with retail and industrial zones to provide employment. Inexpensive cost of living allows for modest salaries and wages, which allows for lower cost basis for manufacturers and other industries. If I had the money, heck, I'd do it. Driving across Arizona, New Mexico, and Texas, I saw millions of square miles of vast, untapped potential. A hundred new cities housing 100,000 each and providing ample employment would go a long way to solving these difficult housing problems, not to mention adding millions of net tax payers to the rolls, providing vast new opportunities for construction and trades, box stores, small retailers, manufacturers, service providers, etc. We need to think a bit outside the box, or in this case outside the fossilized cities that have become poverty traps for so many.
  - justinator 11y ago
littletimmy 11y ago
Here's a crazy idea: regulate residential real estate. This is sickening. It should not be that the poorest of society are further pressed because some graduate of the "mobile home university" wants to jack up rents for his class project. We do NOT need this free market. It is exploitation backed by the threat of state violence.
- sampo 11y ago
  > We do NOT need this free market. The article says it is difficult to establish new trailer parks, as the authorities will not give permissions. So I don't think it is a free market. It is artificially created scarcity.
- crzwdjk 11y ago
  It's already regulated, mostly at the city/town level, and every city zoning board gets lots of comments that "we do NOT need more trailer parks/apartment buildings/'those people' in our town". Supply needs to be deregulated, though it might not be a bad idea to crack down on some of the excesses of slumlords as well.
kqr2 11y ago
In Palo Alto, the last trailer park is being closed: https://news.ycombinator.com/item?id=9586401 https://news.ycombinator.com/item?id=9586401
dsfyu404ed 11y ago
The underlying problem here is that no town is willing to be the site of a new "trailer park" because of the negative stereotypes. Meanwhile the existing trailer parks go about further impoverishing their tenants and towns allow developers to put up "affordable housing" in the form of apartments instead, which is just as much of a ripoff and doesn't come with the benefits of owning your own home (trailer) and having some space around it. The people I personally think are responsible for this aren't the businessmen with questionable ethics taking advantage of an opportunity to make money, but the know-nothings that actively participate in local government solely to fight against a trailer park, Walmart, junkyard or some other local business that benefits poor people. It's the same phenomena seen in internet comments and product reviews. Only people with strong opinions bother to participate and more often than not those opinions are negative and driven by emotion or some self interest ("I'm too good to live in a town with a trailer park" or "I'm too good to live two streets over from "affordable housing") and supported by a poor interpretation of fact. We all know what the online form of this looks like but parallels can be found in local government as well.
- robotresearcher 11y ago
  I grew up poor and in subsidized housing. There are real negatives to living in and around these places, not just snobbery.
dschiptsov 11y ago
Isn't all landlords are getting rich since the beginning of time, and land ownership is the central issue of all politics (leaving some abstractions, like "equality" aside?)

143 points by striking 11y ago

cpr 11y ago

I'm as big a capitalist as anyone, but, boy, reading that made me want to go out and buy a bunch of trailer parks just to lower the rent and lessen the squeeze on these poor folks. Sad!

binarray2000 11y ago

What a perversion! The richest country in the world celebrates trailer parks. Even "upscale trailer parks". OK, one has to admit, it is an improvement over tent cities. No wonder these exist. When you're giving hundreds of billions to gamblers and nothing for social housing you get "ghetto" areas which even police avoids. You officially live in a free country and you surely can go into those areas but it's questionable if you'll come back with your life and your possesions.

smoyer 11y ago
As a clarification, I just want to make sure that by "gamblers" you were referring to the various Wall-Street one-percenters who repeatedly rape our economy. I don't mind millionaires (or billionaires) who actually produce something but it's aggravating that someone can take such a large percentage of the profit by simply shuffling money around. I don't buy the "it creates market liquidity" argument for one minute ... we'd find the liquidity the market needs elsewhere.
- binarray2000 11y ago
  Upvoted. Yes. And I agree: As long someone is producing value she is contributing to the society.
autokad 11y ago
honestly speaking, I lived in both and I'd rather walk through a trailer park any day than an area of 'social housing'. there was no 'giving hundreds of billions to gamblers' going on that I am aware of. The financial bailout was necessary, though not implemented terrifically, but the US/tax payers did make a healthy profit off the whole thing. trailer parks aren't as profitable as made out to be in the article. sure, a few success stories. a high % of people in them do not pay their rent, and its very hard to make them leave when they do not - especially since you'd have to kick out half the park. don't believe me? the number of people living in trailer parks is down significantly from the 1970s, when the rates were over 10%. In fact, had their 'financial crisis' story held up, there would be more people living in trailer parks today than in 2000, that's not true. lots of trailer parks began drying up with access to FHA loans and low inflation. There's really not a good reason to own a trailer @350/month + paying real estate taxes (yeah, cities tax them AND the land under them) when you can buy a home and pay around 300-500/month in mortgage.
driverdan 11y ago
> The richest country in the world celebrates trailer parks. So what? The only difference between a trailer home and a traditional home is one is built on a frame that can be moved and the other has a fixed location with a foundation. What's wrong with that?
- bkeroack 11y ago
  No, the real difference is that trailers depreciate over time, while houses (and property) appreciate. Mobile homes--when purchased--are not an investment in the same way real estate is. Think of them more like automobiles that wear out and eventually have to be replaced.
  - ArkyBeagle 11y ago
    Actual homes depreciate too - it's just the land that may go up in value.
    - Spooky23 11y ago
      Houses are a capital asset, they get maintained and you can borrow against them to improve. Newer houses may be different, as the standard of construction in many cases is pretty awful these days. Trailers are cars with beds. They only go down.
      - jessaustin 11y ago
        Are you European? American houses simply aren't as well-built as houses you might be used to, and they never have been. Sure, history is the reason why we don't have any 500yo houses. One might wonder, however, why we don't have any 100yo houses. Any that do exist are on a historical register, because they are rare. The reason is stick-and-mud quick construction methods. This is actually a perfectly reasonable practice, as Americans move around quite a bit. Some of the crappiest 80yo houses I've seen were in Toledo OH and Detroit MI, two cities that don't actually need much century-old housing. But that sort of thing exists everywhere, and in many places is regularly torn down and replaced with new buildings that will also be torn down within the lifetimes of many people living today.

danbruc 11y ago

Getting even richer by taking from the poorest. Disgusting.

pinky1417 11y ago
They're not taking from the poorest, they're selling to them. People in low income brackets use services and pay for them, just like everyone else in a market economy. As a society, we need to stop acting like every business that deals with the poor is inherently evil. Sure, such businesses can have unethical practices, but simply charging people for goods or services isn't one of those practices.
- danbruc 11y ago
  I was not talking about poor people paying for what they need and consume, I was talking about rich people investing in trailer parks just to get richer. They invest with the sole purpose of getting more money back then they put it, taking the difference from the poor.
  - strathmeyer 11y ago
    Yes dan that is how money works. You'd rather the poor have no place to live??
    - justincormack 11y ago
      These people are not building anything, there are the same amount of houses before and after they buy them.

PythonicAlpha 11y ago

The big success of today's capitalistic system is indicated by the fact, that it even draws profits from the calamities of the people. When I add the "globalization" situation (marginal wages for poor people in poorest countries, that oftentimes even are at the limit of starving in these countries, for the production of our goods), than it is not even seldom today, that this system draws its profits from poorest peoples. It is said, that Henry Ford understood that for him to succeed, he also must help others to succeed. He and other big entrepreneurs laid the foundation for today's wealth of the western nations. Currently the system seems to have changed, by teaching people how to let others fail for the own success. I don't think, that the current system is sustainable. Even Warren Buffet said that his class is winning, but it should not. I think, in the long run, we will all loose this way.

ZanyProgrammer 11y ago

They are sorta trendy here in the Bay, since they offer the appeal of home ownership (of sorts) without the hassle of, you know, buying an actual home. I lived in one in Sunnyvale with a roommate for a few years, and my experience was a bit mixed. The biggest beef was that the gate next to the light rail stop locked both opening and closing, so if you lost your key, you had to walk all the way around to Tasman (paranoid suburbanites about crime). That said, I still think a condo or townhouse is a better deal.

EliRivers 11y ago

he sent a letter to every tenant at that park in Grapevine, Texas, telling them the rent was going to more than double but was still below the market rate of $325. “If you don’t like this or you think you can do better, here’s a list of all the other parks in Grapevine and a list of the owners,” he said in the letter. “Go ahead, call them if you want to move. How many customers do you think we lost? Zero. Where were they going to go?” Says it all. When you've got a captive market, you can squeeze them for every nickel they have. You only have to leave them with just enough money such that they won't give up completely (although that's worth doing a few times; if they do just give up, you evict them and replace them, and the new tenants are paying the higher rate, and soon enough you've covered the costs of eviction and are making a higher profit).

sliverstorm 11y ago
Come now, you've dropped the context for that quote. he sent a letter to every tenant at that park in Grapevine, Texas, telling them the rent was going to more than double but was still below the market rate of $325. “If you don’t like this or you think you can do better, here’s a list of all the other parks in Grapevine and a list of the owners,” he said in the letter. “Go ahead, call them if you want to move. How many customers do you think we lost? Zero. Where were they going to go?”

Someone 11y ago

"Equity LifeStyle Properties (ELS) is the largest mobile home park owner in America, with controlling interests in nearly 140,000 parks. In 2014, ELS made $777m in revenue, helping boost Zell’s near-$5bn fortune." They may be despicable, but I don't understand how these numbers support that claim. $777m revenue over, say, 70,000 parks (taking 'controlling interest' as '50% ownership') is around $10,000 in _revenue_ per year, per _park_. It also doesn't seem consistent with those $300 a month rents. So, please elucidate me. Do I misunderstand those numbers? How large is a typical trailer park? Does rent include a trailer or do you have to bring one on your own?

klank 11y ago
The author of the article got their numbers mixed up. ELS only has ~370 communities. The 140,000 is accurate but is the number of individual sites/lots which that ~370 communities represent.

methodover 11y ago

I'm so torn on this. So, if I understand this correctly, this is how to get rich off renting to poor people: (1) Buy out a property where a bunch of poor people live, (2) Jack the rent up, (3) Justify it with superficial renovations. It works because (1) the cost of moving is so high, and (2) all the other property owners are doing the same thing -- In fact, that's probably why they're doing this "university" to begin with. On the one hand, this looks totally immoral. Poor people are forced to move out, or become even more impoverished, as a result of what you're doing. And it seems like the renovations are really just superficial -- they're designed to make people think "Oh, well they're doing renovations, so the property is worth more." Rather than a genuine, good-faith attempt at improving the properties in a way that the poor tenants can afford. But on the other hand, this is capitalism. Oftentimes in capitalism, things look really, really bad. But from a macro point of view, things work out better in the long run. Could there be some kind of better long-term effect that I just can't see? And yet, criticisms aside, I don't know if any municipality in the country has figured out a good solution from the regulation side of things. In fact, I'm skeptical if regulation can solve this problem. It feels like greedy slumlords are just going to be greedy slumlords no matter what rules we put into place. Maybe the real solution is to just, like, persuade greedy slumlords to think of tenants as real, living, breathing human beings instead of cattle.

ZanyProgrammer 11y ago
Rent control for mobile home parks.
dsr_ 11y ago
I have an answer. Buy the trailer park. Sell it to the tenants. Their rent payments become mortgage payments, in effect. When they finish buying the property en masse, it becomes controlled by a tenant-run cooperative. This is, obviously, a money-losing proposition for whoever buys the trailer park in the first place. That's why it should probably be a government entity. If the trailer park residents can do it by themselves -- and in several locations, they have -- that's great. But it would be preferable to have self-owned communities over slums, even if you have to have the government provide the initial loan and organization. Is it socialism? Sure. The good kind.

knowaveragejoe 11y ago

So what's the surprise here? The economics of a trailer park are lucrative for landlords?

intopieces 11y ago
"They’ve got to live somewhere, so you combine them in a certain place. They don’t go out to hurt people. I think it’s a community service, because if not they will be in your neighbourhood. Now they’re all in one place, you can watch them all in one place. And they pay well and won’t mess things up. I mean, why would you not? I think it’s a brilliant idea." The surprise here is that the ghettoization of identifiable groups is not unintentional; in fact, it's planned.

startupfounder 11y ago

On the surface this is a story about trailer parks and the rich profiting from captive renters, but I think the bigger story is this: "He quotes US government statistics showing that in 2013, 39% of Americans earned less than $20,000 – less than the government’s poverty threshold income of $20,090 for a three-person household." 39% means (Edit: 48,000,000 not 125,162,700, thanks @beachstartup) Americans are living below the poverty line! When you don't have options then you will be taken advantage of. Our system is failing us, our government is failing us, our fellow Americans are failing us and we the community of Hacker News are failing us. How do we disrupt poverty (in the USA and globally), disrupt failing governments and disrupt failing communities? It seems as if our biggest downfall as humans is we don't see how what we do as individuals impacts everyone else and we are all dying deaths of 1b stings. "my carbon doesn't matter", "my investments don't matter", "my food doesn't matter", "my lifestyle doesn't matter", "my impact is so finite", "I'm just one person", etc.

beachstartup 11y ago
i'll tell you why you're being downvoted, it's because your reading comprehension is subpar and you don't have a grip on reality with your hyperbolic claims. 20k for a 3-person household is a lot different than an individual earning under 20k which is where your numbers come from. in fact it's about 200% different. 39% or 125 million americans do not live in poverty. the real number is still shitty, but it's not nearly half, it's closer to 20%, or in statistical terms the bottom quintile, which is pretty much what you would expect given the nature of the US economy/politics. http://money.cnn.com/2014/10/16/news/economy/48-million-americans-poverty-census-bureau/ http://money.cnn.com/2014/10/16/news/economy/48-million-amer...
- brandonmenc 11y ago
  This is why people are supposed to pool together - whether as extended families living under the same roof, or a bunch of friends all pitching in on rent. Unfortunately, too many people refuse to live like that.
- deleted 11y ago
  [deleted]

lotharbot 11y ago

The big surprise for me in this article was that housing sex offenders was such an effective way to get rid of drug dealers. Sex offenders bring attention from the police, media, and ordinary citizens, and drug dealers don't want to be near all that attention.

cldellow 11y ago
The original article glossed over this, IMO. The linked Orlando Weekly article [32804] about Lake Shore Village explains that it's the sex offenders themselves who chase off the criminal element. The gist was that they consider themselves to be sufficiently hounded and they don't need their lives complicated by incidental criminal acts. In fact, there are so few places for sex offenders to live (given the 1,000 foot minimum distance requirements) that they are eager to protect those few areas they can call home. [32804]: http://www.orlandoweekly.com/orlando/the-scarlet-letter/Content?oid=2256113 http://www.orlandoweekly.com/orlando/the-scarlet-letter/Cont...

mkempe 11y ago

One of the elements that enables the perpetuation of this system is the food-stamp program. The landlords are counting on it. If some of these people did not get food stamps they would starve to try to pay the rising rent. People would leave or violently rebel, not starve for the sake of a landlord who decides to raise the rent 50%.

ari_ 11y ago

I have been to boot camp. I speak to a lot of mobile home park owners. When frank talks about raising rent, it's typically because the parks are mismanaged by people who don't know what they are doing. In areas where there are multiple parks, rents hit a plateu because of competition. The other issue, not mentioned here, is that it's really hard to build a new park. No city wants them so they won't allow them. Effectively there is a cap on supply and demand is growing.

crdoconnor 11y ago

https://en.wikipedia.org/wiki/Land_value_tax https://en.wikipedia.org/wiki/Land_value_tax ^^ This would ensure that nobody got wealthy from doing this type of thing, ever. If you don't have a land value tax (or its cousin, property tax), the land value is still taxed, it's just that it's called rent instead. Instead of the stream of income ending up as a social security payment or building a school, it ends up bidding up the price of a Manhattan condo or buying a yacht.

Spooky23 11y ago
What's the difference between this and property tax? Commercial property rates are generally determined by rents.
- crdoconnor 11y ago
  Property tax is assessed based upon on the value of the property, which is often in large part determined by the value of the land it is built upon. Same house in SF and the Midwest - the Midwest one is 5x cheaper. ~80% of the value of the house is the value of the land. LVT is a tax that is intended to tax 100% of the value of the land and 0% of the value of the property built upon it, so in theory the house in the midwest would cost the same as the one in SF, but the tax you'd pay to live in SF would be higher. Property tax would discourage this type of behavior (which is good). LVT would eliminate it entirely.

mixmastamyk 11y ago

Not surprising. I once looked into trailer/camper housing to save money... Turns out the combined rent was about 80% the cost of an apartment, with vastly reduced choice of living location. Didn't seem worth it.

joering2 11y ago

Mandatory read about an old nice and innocent man with an ice-cream cone... http://www.publicintegrity.org/2015/04/03/17024/warren-buffetts-mobile-home-empire-preys-poor http://www.publicintegrity.org/2015/04/03/17024/warren-buffe...

ufmace 11y ago

What I start thinking after reading that is - how could an individual investor do this in a way that felt/seemed less sleazy and might actually help people? Most people's go-to seems to be to try to keep the rent low, but that doesn't really accomplish anything but keeping the same people in the same slightly less grinding poverty for the rest of their lives. What if you raised the rent like they say, but put some of the money towards some kind of education or life-counseling class on-premises instead of just pocketing it all? I thought of that when I remembered a recent discussion on debt collectors where one collector decided that, instead of just hounding and threatening the debtors with dire consequences, they would actually help them make more money to pay the debits by giving them career counseling, resume help, interview practice, help finding jobs they could do, etc. You get your money and improve their lives at the same time. Why not try the same thing here? I bet a lot of the people there could be making more money if there was somebody there to teach them things, train them in new skills, help them out with logistics, transportation, contacts, etc. Why not dream up new ways to help them instead of new ways to fuck them over?

paintrayne 11y ago
The answer you are looking for is higher taxes on the owners of trailer parks to fund universal education, not higher rents on the people who live in trailer parks.

anti-shill 11y ago

I live in an equity lifestyles mobile home park near denver. My job pays me income in the 87th percentile of all workers in america. Not a sex offender park here. The article does not mention it of course but the reason parks and apartment landlords are able to rip off the poor is because the zoning laws all over america have closed off the opportunity to build more mobile home parks and cheap apartments. The fact that over 50% of all voters live in their own homes means that the politicians are able to sell themselves out to landlords and create zoning laws that prevent developing land that would allow placement of mobile homes. It's all about driving up property values and exploiting those who are at the bottom. America is not really about the american dream of capitalism and entrepreneurship. The american dream of about using the government to put the squeeze on the unprotected ones. I would go further and comment on trailer park demographics, but I don't want to get downvoted.

blisterpeanuts 11y ago
Interesting points, anti-shill. In this vast country which even today is mostly empty land especially in the great Southwest, the West, and many parts of the interior, surely it's possible to do something about this terrible housing problem we have, where tens of millions can't even dream of owning their own homes. I would think that investors could make a reasonable profit building a gleaming new city with thousands of affordable homes, not fancy or luxury but stand-alone structures with garage and yard, what used to be considered the American dream of home ownership, with retail and industrial zones to provide employment. Inexpensive cost of living allows for modest salaries and wages, which allows for lower cost basis for manufacturers and other industries. If I had the money, heck, I'd do it. Driving across Arizona, New Mexico, and Texas, I saw millions of square miles of vast, untapped potential. A hundred new cities housing 100,000 each and providing ample employment would go a long way to solving these difficult housing problems, not to mention adding millions of net tax payers to the rolls, providing vast new opportunities for construction and trades, box stores, small retailers, manufacturers, service providers, etc. We need to think a bit outside the box, or in this case outside the fossilized cities that have become poverty traps for so many.
- justinator 11y ago

littletimmy 11y ago

Here's a crazy idea: regulate residential real estate. This is sickening. It should not be that the poorest of society are further pressed because some graduate of the "mobile home university" wants to jack up rents for his class project. We do NOT need this free market. It is exploitation backed by the threat of state violence.

sampo 11y ago
> We do NOT need this free market. The article says it is difficult to establish new trailer parks, as the authorities will not give permissions. So I don't think it is a free market. It is artificially created scarcity.
crzwdjk 11y ago
It's already regulated, mostly at the city/town level, and every city zoning board gets lots of comments that "we do NOT need more trailer parks/apartment buildings/'those people' in our town". Supply needs to be deregulated, though it might not be a bad idea to crack down on some of the excesses of slumlords as well.

kqr2 11y ago

In Palo Alto, the last trailer park is being closed: https://news.ycombinator.com/item?id=9586401 https://news.ycombinator.com/item?id=9586401

dsfyu404ed 11y ago

The underlying problem here is that no town is willing to be the site of a new "trailer park" because of the negative stereotypes. Meanwhile the existing trailer parks go about further impoverishing their tenants and towns allow developers to put up "affordable housing" in the form of apartments instead, which is just as much of a ripoff and doesn't come with the benefits of owning your own home (trailer) and having some space around it. The people I personally think are responsible for this aren't the businessmen with questionable ethics taking advantage of an opportunity to make money, but the know-nothings that actively participate in local government solely to fight against a trailer park, Walmart, junkyard or some other local business that benefits poor people. It's the same phenomena seen in internet comments and product reviews. Only people with strong opinions bother to participate and more often than not those opinions are negative and driven by emotion or some self interest ("I'm too good to live in a town with a trailer park" or "I'm too good to live two streets over from "affordable housing") and supported by a poor interpretation of fact. We all know what the online form of this looks like but parallels can be found in local government as well.

robotresearcher 11y ago
I grew up poor and in subsidized housing. There are real negatives to living in and around these places, not just snobbery.

dschiptsov 11y ago

Isn't all landlords are getting rich since the beginning of time, and land ownership is the central issue of all politics (leaving some abstractions, like "equality" aside?)