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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 peopl

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.
- sliverstorm 11y ago
  If a mortgage was a good plan for them, they probably wouldn't be in a trailer park... Renting has value that is appropriate for some people. Ownership is not always the answer.
  - kedean 11y ago
    Sure, mortgage on a house isn't good for these people, because they don't have the money for a down payment, or the money to pay for a regular house. Give them the opportunity to purchase a small house on a small plot of land, though, and it could work. Mortgage for a house is about equal to the average rent in many places, and people living in trailer parks usually don't have the problem of not intending to stay very long (like apartment dwelling often do).
    - morganvachon 11y ago
      Exactly. I was raised poor, as were my parents, and my grandparents on both sides before them. I learned a lot of bad financial habits from them which screwed me up in my 20s, but I've unlearned most of that and I'm on the right track now. One thing I learned from them that turned out to be beneficial is to think small; don't buy something I can't afford. Six years ago I made my first house purchase at the age of 32, and while it's not a McMansion in an upper-middle-class subdivision, it's a practical and affordable home. My mortgage payment including taxes and insurance fees is less than $400/month for a three-bedroom farmhouse on half an acre of land. I'm not in a subdivision so I'm not subject to my neighbors' whims about curtain colors and such, and in five years I'll have it paid off (and our vehicles are already paid off). My health isn't the best, and if I end up having to retire early it will be comforting to know that my family will have a paid-for home and cars, and we won't have to choose between making a house payment or buying groceries in a given month.
      - sliverstorm 11y ago
        A house and half an acre for 20k!? Where?
EliRivers 11y ago
But on the other hand, this is capitalism. Is it? Capitalism is the private ownership of the means of production. Is somewhere to live a "means of production"? Sure, it's necessary to live, but it's not "producing" anything. There's no partnership involved. Capitalism is about someone owning the "machine" [1] of production, and someone else being employed to operate that machine, and the owner and operator splitting the profit. In theory, the two of them working together in this way produces more than either would on their own, so everyone benefits. I see the sort of thing in this article referred to as "rentier capitalism", although it's generally meant to be derogatory; a way of marking it out from the beneficial form of capitalism. Oftentimes in capitalism, things look really, really bad. But from a macro point of view, things work out better in the long run. I think you're confusing capitalism with exploitation and rent seeking. They're not the same thing. Not at all. As an aside, I'm sure this use of the word "capitalism" is something Chomsky used to talk about. Now that it's very broadly accepted that capitalism is ethically good and correct and there is effectively no discussion about capitalism, people can gradually move bad behaviour into the definition of capitalism and society will protect that bad behaviour, even against its own interests. If we do want to redefine "capitalism", that's fine, of course, but at that point we have to re-examine its status as "ethically good" or "correct", and judge it in light of this rent-seeking exploitation that produces no value or wealth. In my verdict, under this new definition, "capitalism" comes up bad. [1] Which of course could be an actual machine, but could be just any form of capital that is necessary to produce the output goods.
jakejake 11y ago
It seems to me there is a fine line between providing a valuable service for low income people and being a slum lord.
klipt 11y ago
Well similar to the Bay Area, government is restricting supply: "local authorities are very reluctant to grant permission for new parks" So the landlords are using their natural oligopoly to rake in cash. A truly free market is supposed to prevent that kind of situation. I agree though that raising the rent on a disabled pensioner who then has to walk around collecting cans for small change is pretty disgusting. If there's a good argument for rent control, it's for people in exactly that kind of situation.
javert 11y ago
It's clear that regulation is the problem. There aren't enough mobile home parks to meet demand, because authorities don't allow new ones to be built. It says it in the article. Allow them to be built, supply will meet demand, rentors will have options, and the prices will go down. But, in typical Amero-European fashion, when you see a problem caused by regulation, your go-to solution is more regulation.
- Oletros 11y ago
  The problem is not "there is not enough mobile home parks", the problem is that people only can afford mobile home parks
  - javert 11y ago
    Living in a mobile home is actually pretty decent. It's generally going to be nicer, and much more private, than living in the type of apartments that would be within range of someone at that income level. And the article mentions this---there is a reference to children who prefer the mobile home park over apartments. I also know this because my aunt and cousin used to live in one. I wouldn't mind living in one myself, as long as the neighbors are decent (and that can very well be the case). I get it. That's not good enough either---you want to force wealthy Americans to subsidize "really nice" housing for everyone. Unfortunately, that would significantly decrease net production, because you're diverting resources that would be used for producitve purposes to housing that is merely consumed. In the long run, everyone's standard of living would go down---most of all, the poor, who depend on cheap products and marginal jobs that have a low productivity level. You can't have your cake and eat it, too. You can't have more guns and have more butter. Resources are limited. I get it. You've already heard this, but it's not how you want reality to be, and for some reason, you think you can put your wishes over the facts and get away with it. There's no way I can talk you out of that since persuasion presumes a mutual acceptance of reality.
    - btdollar 11y ago
      It's pretty hypocritical to talk down like that, "it's not how you want reality to be," while at the same time asserting that the resources of wealthy Americans are used for purely productive purposes. Somehow putting money into houses is "consuming" it whereas letting the wealthy get richer from finiancial instruments is "productive purposes." Maybe you should join the rest of us in reality someday.
rayiner 11y ago
Making money off land is actually more feudalism, not capitalism.
crdoconnor 11y ago
>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 A land value tax would eliminate this. It would simply divert the rental streams from the wealthy to the government (who can then reinvest it back into the community instead, unlike the wealthy who will just siphon it off). Raising property taxes would help, too, which every municipality can do.
- greedo 11y ago
  You seriously think the US (or local) govt has a good track record with reinvesting tax revenues into low income communities? And be careful with advocating property tax hikes; property taxes can be very regressive for low income home owners.
  - sokoloff 11y ago
    And for renters as well. Don't presume that you can tax rental property without that tax showing up in the rent...
  - crdoconnor 11y ago
    >You seriously think the US (or local) govt has a good track record with reinvesting tax revenues into low income communities? Compared to the 1%? Fuck yes. Does the 1% dole out social security? Build schools? Roads? I don't think so. >property taxes can be very regressive for low income home owners. Not unless it's designed to be regressive (e.g. a poll tax instead of based upon the value of the property). Property taxes are naturally progressive - the more your property is worth, the more you pay in tax.
    - greedo 11y ago
      Are you familiar with the impetus behind Prop 13? (Not the side effects, but the motives.) A lot of homeowners were priced out of their homes because they couldn't afford the property tax rates. Sure they can sell, but then they're stuck as renters.
seanalltogether 11y ago
My guess is that trailer parks leverage a loophole in property taxes to make all their money. If property tax rates were matching the normal values paid by other home owners, then owning a trailer park would not be a lucrative venture for so many investors and they would actually have to weigh the negatives of increasing rent.
- greedo 11y ago
  Home owners pay higher property tax because they own the lot plus the house on the lot. With trailer parks, the owners only own the lot plus outbuildings etc. The trailers are owned either by the tenants outright, or leased/rented by a third party.
Spooky23 11y ago
You're missing the key detail. In most cases, scum landlords aren't really soaking the tenants, they are soaking you, as poor folks are often recipients of aid where a local or regional housing authority is paying the rent. Rent seekers always behave badly, subject to market conditions. They behave badly because there is no incentive for them not to. In my city, the "prevailing rent" for a two bedroom apartment in a rough neighborhood with open retail drug sales and other issues is about $1200/mo. Apartments that don't qualify for section 8 subsidies (because the buildings should be condemned) are a bit less. A two bedroom in a suburban style complex 8-10 miles away with covered parking, good schools, and pool is $1250-1350. The solution IMO is to make life as difficult and onerous for larger landlords as possible through regulation and fees for negative outcomes, and use subsidies to get tenants into a position where they can own a their home or a 2-3 family home.
- sampo 11y ago
  > In most cases, scum landlords aren't really soaking the tenants, they are soaking you, as poor folks are often recipients of aid where a local or regional housing authority is paying the rent. The local authorities are also responsible for the rents going up, by not allowing the construction of new parks to answer for the high demand.
  - Spooky23 11y ago
    That's a factor in some places, but not all. In my city, we have about 1,000 multi family vacant properties and a tight rental market. In SFO or similar places, it definitely a core part of the problem.
- rhizome 11y ago
  scum landlords aren't really soaking the tenants, they are soaking you, as poor folks are often recipients of aid where a local or regional housing authority is paying the rent. Which is a play on the Walmart wage model.
panarky 11y ago
> Oftentimes in capitalism, things look really, really bad. But from a macro point of view, things work out better in the long run. There is no evidence that things deterministically "work out better in the long run" in an unregulated capitalist system. This is just an unexamined belief that prevents us from taking action against injustice in the short run. Note that things are also working out pretty well under market socialism (the Nordic model), and under state capitalism (Singapore, China). This unfounded belief that it always works out for the best "in the long run" is very similar to the belief that life on Earth may be full of pain, injustice and misery, but "in the long run" it will all be great in heaven. It's a powerful way to keep people from taking action to improve their circumstances right now. The long run is a misleading guide to current affairs. In the long run we are all dead. Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is past the ocean is flat again. http://en.wikiquote.org/wiki/John_Maynard_Keynes http://en.wikiquote.org/wiki/John_Maynard_Keynes
Lukeas14 11y ago
One issue with "a genuine, good-faith attempt at improving the properties" is that unlike single family homes, trailer homes are actually a depreciating asset. A 30 year old trailer home isn't worth much since the cost to do meaningful improvements is likely more than the home is worth. This means an owner can only make a profit on the rent as opposed to a mix of rent and equity like most real estate. Trailer parks on the other hand are appreciating assets and is where the real money is made by renting plots of land to the trailer home owners or tenants.
deleted 11y ago
[deleted]

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.

sliverstorm 11y ago
If a mortgage was a good plan for them, they probably wouldn't be in a trailer park... Renting has value that is appropriate for some people. Ownership is not always the answer.
- kedean 11y ago
  Sure, mortgage on a house isn't good for these people, because they don't have the money for a down payment, or the money to pay for a regular house. Give them the opportunity to purchase a small house on a small plot of land, though, and it could work. Mortgage for a house is about equal to the average rent in many places, and people living in trailer parks usually don't have the problem of not intending to stay very long (like apartment dwelling often do).
  - morganvachon 11y ago
    Exactly. I was raised poor, as were my parents, and my grandparents on both sides before them. I learned a lot of bad financial habits from them which screwed me up in my 20s, but I've unlearned most of that and I'm on the right track now. One thing I learned from them that turned out to be beneficial is to think small; don't buy something I can't afford. Six years ago I made my first house purchase at the age of 32, and while it's not a McMansion in an upper-middle-class subdivision, it's a practical and affordable home. My mortgage payment including taxes and insurance fees is less than $400/month for a three-bedroom farmhouse on half an acre of land. I'm not in a subdivision so I'm not subject to my neighbors' whims about curtain colors and such, and in five years I'll have it paid off (and our vehicles are already paid off). My health isn't the best, and if I end up having to retire early it will be comforting to know that my family will have a paid-for home and cars, and we won't have to choose between making a house payment or buying groceries in a given month.
    - sliverstorm 11y ago
      A house and half an acre for 20k!? Where?

EliRivers 11y ago

But on the other hand, this is capitalism. Is it? Capitalism is the private ownership of the means of production. Is somewhere to live a "means of production"? Sure, it's necessary to live, but it's not "producing" anything. There's no partnership involved. Capitalism is about someone owning the "machine" [1] of production, and someone else being employed to operate that machine, and the owner and operator splitting the profit. In theory, the two of them working together in this way produces more than either would on their own, so everyone benefits. I see the sort of thing in this article referred to as "rentier capitalism", although it's generally meant to be derogatory; a way of marking it out from the beneficial form of capitalism. Oftentimes in capitalism, things look really, really bad. But from a macro point of view, things work out better in the long run. I think you're confusing capitalism with exploitation and rent seeking. They're not the same thing. Not at all. As an aside, I'm sure this use of the word "capitalism" is something Chomsky used to talk about. Now that it's very broadly accepted that capitalism is ethically good and correct and there is effectively no discussion about capitalism, people can gradually move bad behaviour into the definition of capitalism and society will protect that bad behaviour, even against its own interests. If we do want to redefine "capitalism", that's fine, of course, but at that point we have to re-examine its status as "ethically good" or "correct", and judge it in light of this rent-seeking exploitation that produces no value or wealth. In my verdict, under this new definition, "capitalism" comes up bad. [1] Which of course could be an actual machine, but could be just any form of capital that is necessary to produce the output goods.

jakejake 11y ago

It seems to me there is a fine line between providing a valuable service for low income people and being a slum lord.

klipt 11y ago

Well similar to the Bay Area, government is restricting supply: "local authorities are very reluctant to grant permission for new parks" So the landlords are using their natural oligopoly to rake in cash. A truly free market is supposed to prevent that kind of situation. I agree though that raising the rent on a disabled pensioner who then has to walk around collecting cans for small change is pretty disgusting. If there's a good argument for rent control, it's for people in exactly that kind of situation.

javert 11y ago

It's clear that regulation is the problem. There aren't enough mobile home parks to meet demand, because authorities don't allow new ones to be built. It says it in the article. Allow them to be built, supply will meet demand, rentors will have options, and the prices will go down. But, in typical Amero-European fashion, when you see a problem caused by regulation, your go-to solution is more regulation.

Oletros 11y ago
The problem is not "there is not enough mobile home parks", the problem is that people only can afford mobile home parks
- javert 11y ago
  Living in a mobile home is actually pretty decent. It's generally going to be nicer, and much more private, than living in the type of apartments that would be within range of someone at that income level. And the article mentions this---there is a reference to children who prefer the mobile home park over apartments. I also know this because my aunt and cousin used to live in one. I wouldn't mind living in one myself, as long as the neighbors are decent (and that can very well be the case). I get it. That's not good enough either---you want to force wealthy Americans to subsidize "really nice" housing for everyone. Unfortunately, that would significantly decrease net production, because you're diverting resources that would be used for producitve purposes to housing that is merely consumed. In the long run, everyone's standard of living would go down---most of all, the poor, who depend on cheap products and marginal jobs that have a low productivity level. You can't have your cake and eat it, too. You can't have more guns and have more butter. Resources are limited. I get it. You've already heard this, but it's not how you want reality to be, and for some reason, you think you can put your wishes over the facts and get away with it. There's no way I can talk you out of that since persuasion presumes a mutual acceptance of reality.
  - btdollar 11y ago
    It's pretty hypocritical to talk down like that, "it's not how you want reality to be," while at the same time asserting that the resources of wealthy Americans are used for purely productive purposes. Somehow putting money into houses is "consuming" it whereas letting the wealthy get richer from finiancial instruments is "productive purposes." Maybe you should join the rest of us in reality someday.

rayiner 11y ago

Making money off land is actually more feudalism, not capitalism.

crdoconnor 11y ago

>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 A land value tax would eliminate this. It would simply divert the rental streams from the wealthy to the government (who can then reinvest it back into the community instead, unlike the wealthy who will just siphon it off). Raising property taxes would help, too, which every municipality can do.

greedo 11y ago
You seriously think the US (or local) govt has a good track record with reinvesting tax revenues into low income communities? And be careful with advocating property tax hikes; property taxes can be very regressive for low income home owners.
- sokoloff 11y ago
  And for renters as well. Don't presume that you can tax rental property without that tax showing up in the rent...
- crdoconnor 11y ago
  >You seriously think the US (or local) govt has a good track record with reinvesting tax revenues into low income communities? Compared to the 1%? Fuck yes. Does the 1% dole out social security? Build schools? Roads? I don't think so. >property taxes can be very regressive for low income home owners. Not unless it's designed to be regressive (e.g. a poll tax instead of based upon the value of the property). Property taxes are naturally progressive - the more your property is worth, the more you pay in tax.
  - greedo 11y ago
    Are you familiar with the impetus behind Prop 13? (Not the side effects, but the motives.) A lot of homeowners were priced out of their homes because they couldn't afford the property tax rates. Sure they can sell, but then they're stuck as renters.

seanalltogether 11y ago

My guess is that trailer parks leverage a loophole in property taxes to make all their money. If property tax rates were matching the normal values paid by other home owners, then owning a trailer park would not be a lucrative venture for so many investors and they would actually have to weigh the negatives of increasing rent.

greedo 11y ago
Home owners pay higher property tax because they own the lot plus the house on the lot. With trailer parks, the owners only own the lot plus outbuildings etc. The trailers are owned either by the tenants outright, or leased/rented by a third party.

Spooky23 11y ago

You're missing the key detail. In most cases, scum landlords aren't really soaking the tenants, they are soaking you, as poor folks are often recipients of aid where a local or regional housing authority is paying the rent. Rent seekers always behave badly, subject to market conditions. They behave badly because there is no incentive for them not to. In my city, the "prevailing rent" for a two bedroom apartment in a rough neighborhood with open retail drug sales and other issues is about $1200/mo. Apartments that don't qualify for section 8 subsidies (because the buildings should be condemned) are a bit less. A two bedroom in a suburban style complex 8-10 miles away with covered parking, good schools, and pool is $1250-1350. The solution IMO is to make life as difficult and onerous for larger landlords as possible through regulation and fees for negative outcomes, and use subsidies to get tenants into a position where they can own a their home or a 2-3 family home.

sampo 11y ago
> In most cases, scum landlords aren't really soaking the tenants, they are soaking you, as poor folks are often recipients of aid where a local or regional housing authority is paying the rent. The local authorities are also responsible for the rents going up, by not allowing the construction of new parks to answer for the high demand.
- Spooky23 11y ago
  That's a factor in some places, but not all. In my city, we have about 1,000 multi family vacant properties and a tight rental market. In SFO or similar places, it definitely a core part of the problem.
rhizome 11y ago
scum landlords aren't really soaking the tenants, they are soaking you, as poor folks are often recipients of aid where a local or regional housing authority is paying the rent. Which is a play on the Walmart wage model.

panarky 11y ago

> Oftentimes in capitalism, things look really, really bad. But from a macro point of view, things work out better in the long run. There is no evidence that things deterministically "work out better in the long run" in an unregulated capitalist system. This is just an unexamined belief that prevents us from taking action against injustice in the short run. Note that things are also working out pretty well under market socialism (the Nordic model), and under state capitalism (Singapore, China). This unfounded belief that it always works out for the best "in the long run" is very similar to the belief that life on Earth may be full of pain, injustice and misery, but "in the long run" it will all be great in heaven. It's a powerful way to keep people from taking action to improve their circumstances right now. The long run is a misleading guide to current affairs. In the long run we are all dead. Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is past the ocean is flat again. http://en.wikiquote.org/wiki/John_Maynard_Keynes http://en.wikiquote.org/wiki/John_Maynard_Keynes

Lukeas14 11y ago

One issue with "a genuine, good-faith attempt at improving the properties" is that unlike single family homes, trailer homes are actually a depreciating asset. A 30 year old trailer home isn't worth much since the cost to do meaningful improvements is likely more than the home is worth. This means an owner can only make a profit on the rent as opposed to a mix of rent and equity like most real estate. Trailer parks on the other hand are appreciating assets and is where the real money is made by renting plots of land to the trailer home owners or tenants.

deleted 11y ago

[deleted]