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.
"Disrupting poverty" is a mostly solved problem in e.g. the Nordic countries. The solution is a strong social welfare net - which means the poor never fall into absolute poverty - and high taxes to fund that net - which means the rich don't become as rich (doctors for example don't earn that much more than baristas, but medical school is free). Unfortunately most Americans wouldn't support the high taxes part.
Remember when class mobility (i.e. not being poor just because you had poor parents) was the American dream? That dream is now far more alive in Denmark than in America.
Because many people responding seem to believe that there is no significant difference in salary between a barista and a doctor, here are some real numbers (monthly gross):
The median barista is earning somewhat better than a living wage. The median GP earns 53% more than the barista, and can probably afford a small house in a nice area. Also note that the 90th percentile barista still earns less than the 10th percentile GP. Even Swedens high, progressive taxes do not fully compensate for this difference.
That sounds about right (right in the sense as that probably how it is and right in the sense that IMHO that's a fair difference). Now would be really interesting to see the same numbers for the US and also have not just the salary but the take home pay after taxes.
Is that take-home pay after a taxes? Is the left column the gross wage, or the cost of employment to the employer? Eitherway in Belgium you'd keep barely half of that. Seems like the Swedes get the better deal.
One thing I noticed while in Denmark was that lifestyles, even among the middle class, are relatively poor by American standards. Late model cars or no cars at all, one tv per house, small houses, mostly homecooked meals...
In a material ownership sense middle class Danes had less than many poor Americans. There was less of a focus on material wealth and a stronger focus on different forms of success instead - and of course the Danes didn't have to worry about college or healthcare.
It seems possible for a family making less than $25,000 a year to easily surpass the level of wealth of most Danes I met and maintain insurance and a college fund for a state level school (with two years of community college to offest later costs).
But in the United States the extreme focus on debt fueled spending (particularly on cars and houses) leads to not taking advantage of this. (Marketing is far more developed and everpresent in the United States than anywhere I've visited)
That's not a poor lifestyle, that's a good lifestyle enhabled by sensibly designed cities. Bike around Copenhagen or sit in jams on the LA freeways? I know which I'd rather do.
Many middle class Danes still have less material wealth than most poor Americans. Whether material wealth buys happiness or a better lifestyle is a different question.
In the US people have the option to live wonderful lives but also the freedom to screw up (and a system that encourages some screw ups). In Denmark that wonderful life is materially limited more but there is less freedom to screw up.
If doctors don't earn much more than baristas, why would I even bother putting myself through the hell that is medical school, free or not? I could skip it all and make almost as much pulling espresso shots. It makes no sense.
The same reason that I and a lot of other people on this site and elsewhere would still write software even if we weren't (relatively) highly compensated for it.
Why would I want to stand behind an espresso bar all day making cups of coffee for other people? That's not something I personally find challenging or intellectually stimulating and so if given the choice between my current profession and that at the same rate of pay I'd happily stick with what I love.
Hell, if the choice was barista or retrain as a physician for the same rate I'd take a stab at medicine even though it's only marginally interesting to me because it involves more of a chance of working on the types of problems I enjoy solving.
On the flip side, I'm sure there are lots of people that find the coffee business more attractive than medicine. That's great, they should absolutely pursue that. The freedom for people to do the things that they truly enjoy as work is something that we should be promoting and finding better ways of enabling.
In a system like that, you would have fewer doctors yes, but the ones you have would be the ones who actually want to BE doctors. In the US you have a huge group who couldn't afford med school but really want to save lives as a doctor. Under that system, they could do it. I'd be entirely ok if everyone in the medical profession was there out of passion instead of for the money.
The jobs you'll have trouble filling are the ones that are shitty but get paid big bucks in the US, like oil field workers. Those guys are there entirely for the nice paycheck.
> In a system like that, you would have fewer doctors yes, but the ones you have would be the ones who actually want to BE doctors. In the US you have a huge group who couldn't afford med school but really want to save lives as a doctor. Under that system, they could do it.
That's not entirely true. The United States military is one example of an organization that will pay for your medical school in exchange for some of your time. My wife is a physical therapist in the Army and this is how it worked for her. The Army paid for her school and she earned a 1.5x service obligation for the time she spent in school. It was a three-year school so once she finished, she owed 4.5 years of Active Duty service. On top of the school cost itself, they paid her as an active duty officer while she was in school, plus they paid for our housing and subsistence allowance for our family. All in all, she made about $75-80K a year to get her degree, then $100K+ once she was done with the school. It's not some front lines combat thing, either. She works in a normal clinic like most PTs, treating Soldiers and civilian family members and retirees. She's in it for a career so she will receive a retirement pension after 20 years (how many civilian docs in the US get that?), plus lifetime healthcare for her and me and our children until they turn 18.
It's truly an incredible deal for us, and it's available to anyone with the grades to get into medical/dental/PT/OT/etc. school and who can pass a physical and fitness test.
Hey, while working in mining as a labourer or other hands-on-tools job may be physically taxing and miserable in some sense (hence the large paycheque), it's enjoyable in its own right. My father works as a civil engineer out in mining towns here in Australia, both for the money and because he loves his job as much as I do mine. It's not all ruthless money-grabbing :)
Of course, but most people out there got into it because of the money or because there's nothing else for them. It's not a job where a new entrant to the workforce will think "yeah I think I'll do that for a living". Same with waste management jobs, etc. More standard vocational jobs like electricians would be separate, as its more 'desirable' and 'cool' from a young age, at least among some.
I'd also argue that a civil engineer is an entirely different beast from the actual laborers, who I was referring to. My understanding of a CE in that scenario is more of a planning and overseeing role (correct me if I'm wrong about that).
> I'd also argue that a civil engineer is an entirely different beast from the actual laborers, who I was referring to. My understanding of a CE in that scenario is more of a planning and overseeing role (correct me if I'm wrong about that).
You'd ordinarily be right, but as an interesting quirk of how things are run out where my Father is he's down in the trenches with the rest of them :)
The basic concept he is probably missing is that when a _real_ safety net exists, money is less desirable.
If I am backstopped by a home and food near my family and they are too, I won't be as motivated by riches. The entire reason I even need money is to buy a home and to build retirement funds... anything else is a toy (and in Western countries is probably trivially cheap compared to housing).
What that means is that I have much more freedom to do whatever I want to do. If I want to be a bin man or a doctor or a truck driver or a car salesman... whatever; I have much more autonomy to follow my dreams in a system that does not mean I live paycheck to paycheck doing half of those jobs.
Right now, I don't have a home, and so it is basically irrational (given that I don't want to be nomadic and leave my family behind) for me to take lower paying jobs ever. This is really a stupid situation to be in; it means that capitalism almost decides what I spend my entire life doing without me having that much free choice (choosing to be poor is not a valid choice).
Using this argument, who would clean the toilets at the airports? Certainly the people who do that wouldn't be "following their dreams". Presumably it's the lower-skilled class doing those jobs but why would they scrub dirty toilets when they could make coffee or scan groceries at the market for the same pay?
Look, I appreciate what you all are saying and your noble intent--I just don't see this working in the US at all. The "American dream" of hard work as a path to wealth and comfort is practically built into the DNA of every new immigrant upon landing in our country.
a) The unskilled will choose to clean airports anyway. They can't get a job as a doctor and they want to buy toys (TV, smartphone, holiday, etc). Equivalent salary does not mean that jobs are just as accessible - academic positions tend towards min wage, but the working classes aren't scrambling for those because they are locked out via credentials or lack of education in general.
b) If clean airports require exploiting the poor (basically, relying on the fact that people will starve and die or suffer mental illness if they don't do it), then maybe we shouldn't have clean airports.
I think that part of what makes some jobs so crap is the fact that employers know that their employees are reliant. Senior management jobs are cushy precisely because people have FU money and can just leave. This should be expanded.
I need money for rent, food, clothes, electricity. Of course this need for money affects how I spend my life. I certainly wouldnt be working if not for this need.
Because he's commenting on HN he 'values money'? Why do people on HN specifically value money more than people on another site? As far as I can tell the only common denominator for this site traitwise is valuing interesting stories.
I have heard that in other places outside the US, medical school is not hell, and it was made that way by the AMA which enforces a monopoly on how many MDs schools are allowed to graduate each year.
Whether or not this means doctors educated in the US are superior and make fewer mistakes than those that are not, I do not know.
I only know about Ireland, the UK and Germany. All of them have undergraduate medical schools and they're all really, really hard. But the competition to get in is intense enough and meritocratic enough that if you did get in you are fully capable of passing absent the emergence of mental health problems.
The intern year is pure hell everywhere as far as I know but that's after you graduate even you want to qualify as a doctor. A year when working a mere 60 hours basically qualifies as a week off and people commiserate over the length of time they've gone without sleep.
I've never found a reasonable explanation of why these long student-doctor hours are a) necessary or b) desirable. I've always put it down to the same thing as the parent, doctor's union's intentionally restricting supply to benefit their members at a great cost to society. Far more of the job could be done by nurses (or a computer), and given the choice between an experienced nurse and a tired and inexperienced doctor, I think the nurse may well win.
If you can do your intern year you can do anything and you learn a great deal in that year. Doctors are legally responsible in ways that nurses aren't and compared to the average doctor the average nurse is an idiot.Then again given the choice between a nurse practitioner and a doctor who's been at work for sixteen hours who just qualified I'd take the np.
All that said outside surgery the hours appear to be mostly hazing. Between lessened fatigue and poorer continuity of care reducing doctors' hours is a wash when analysing fatalities and medical errors. This does not hold for surgery. Reducing intern's working hours clearly results in more patient deaths in surgery. Feel free to check on google scholar.
>compared to the average doctor the average nurse is an idiot.
After that statement, I'll assume you don't know what you're talking about or you're in some odd part of the planet where nursing is taught on the job.
Around here, nursing requires years of training. Psych, biology, pharmacology and I don't know what. We have different level of nursing qualifications, with the longest being a nurse practitioner, capable of legally prescribing medication.
It is a field regulated by the same governing body as doctors, and is not trivial in any way.
Can you summarize the conjetured reason why having your trainee surgeon getting enough sleep to do their job correctly leads to more deaths, I'm intrigued.
What's with all this reasoning without data? It isn't scientific.
You could do some actual field science and ask a physician in a Nordic country why they chose to go to medical school. Whatever their reasons, the system works for them; there are no reports of doctor shortages in Denmark.
I'd argue his would create better doctors by encouraging people who have a calling for the vocation, not just the higher pay check.
Also, something I noticed while living in Norway for a few years, it's much more common to make big career changes mid life. Their system is quite supportive of this and allows you to maintain a reasonable lifestyle while you do. It's a really good system IMO.
Given that there are more doctors per capita in each of the Nordic countries than there are in the US, the holding onto a mental model that can't make sense of this would seem to be problematic.
You're missing the point. The statement relates to investment of time and reward for that investment. If an investment of many years results in a salary equivalent to that of a clerk or barista, then the system does not value individual effort or intelligence and is thus inefficient. This is a valid argument against socialist economies and one that progressives here in the States are really uncomfortable with. I have been to Cuba and I met a cardiologist who made the same as the local fish monger. Rediculous. Fuck everyone who wants to correct the ills of this country by forcing that asinine logic upon us.
Capitalism isn't perfect, but it is very efficient at determining value. The value of work is largely based on difficulty; the more difficult a skill, the more it pays. The higher pay attracts more people capable of mastering that skill, thus earning the higher pay.
If you simply say everyone should make the same regardless of skill, then you diminish the value of both the skill, and the effort used to master the skill.
I'm inclined to agree with you, except for the massive, glaring exception of inherited wealth/passive income.
If you're just talking about the peons trading labor for money, then yes, more or less.
But there's another class of folks, and my anecdotal evidence is that they're freaking everywhere, overflowing with unearned wealth. I'm nobody from nowhere and I know many of these people, and they'd be screwed if they had to go through what I have.
The veneer of meritocratic capitalism in America should be at the breaking point IMO. But this is a vulgar place so I'm probably wrong.
Nothing you are referring to is limited to America or capitalism. Even with incarnations of economic systems that are purported to solve inequality, who your daddy is matters. Take away wealth and humans will find some other system for status.
The argument for capitalism is not about equality, but relative mobility compared to other systems. That mobility creates incentive and thus growth.
>Nothing you are referring to is limited to America or capitalism.
Fair enough. Let's call it all equal then.
>The argument for capitalism is not about equality, but relative mobility compared to other systems.
The argument for socialism (or socialism-like endeavors) is about equality; when societies are more equal, 'relative mobility' is less important, because the place you're in is less likely to be so horrible that you're dying to get out of it.
I think in a lot of countries (including USA) there is a medical doctor's workers union or somesuch successfully lobbying for a regulation on the number of doctors that are trained each year. So the system is far from free market, more resembling medieval guild system, of which it did originate.
Who cares about money, what about what's really important in life? What about social status?
A principal of a high school makes more than most tenured professors. Why would anybody want to go through a Ph.D., job hunt and seven years of working like a dog in the hope of getting tenure when they could do an M.Ed. (laughably easy for anyone sane contemplating a doctorate) and have job security three years post qualification?
... to have a positive impact on people's lives? To potentially go into research and contribute to the greater body of human knowledge about how our bodies and minds work? Did I miss an /s tag? For some people, and that includes a lot of people working in disruptive startups, there's more to life than just making a lot of money and living well on an individual level.
First, doctors make more, way more. I'm born and raised in Europe and while wage inequality is smaller, it's not equal.
For example, for a GP here in the Netherlands about 30% are salaried and make between 60k and 80k or so. The rest are mostly independent (have their own (co) practice) and make between 100 and 150k. (all euros).
Meanwhile a Barista makes about 20k.
So there's definitely a significant gap here. The difference is that in the US the gap tends to be slightly bigger, and the tax slightly lower at the higher end of income.
Another difference is that education is highly subsidised: my college received about 12k or so per year for my tuition, 10k straight from the government, and 2k from me, and I - and everyone else - got a 2k a year loan from the government which is turned into a 100% gift if you graduate. I use this gift to pay my remaining 2k tuition fees, so tuition is totally free. I still borrowed because studying full-time leaves me not enough time to work to pay for a little over $1k a month on rent, food, insurance etc. But that debt is very small and also provided by the government at currently about 1.5% (it's always very low, don't think it ever beats inflation).
This basically creates an incentive to become a doctor, without a risk of lifetime crushing debt. It also creates an opportunity for people to choose what they love to do. Money plays a role, obviously, and this is how market inefficiencies are kept in check, but it's not the sole factor.
Now being a doctor obviously sucks in terms of working pressure. But there's still plenty of incentive to become one, but not enough incentive to work 80 hours a week like you may see in the US where you want to make mad bank because if you don't your student debt will crush you. I dare say it brings a bit of life/work balance to doctors, of whom as I gather live a pretty stressed and shitty life professionally.
You'll quickly find though that if indeed studying is cheap, if indeed you can make a living as a barista to fall back on, you may as well pursue what you actually like to do, and for most people that's not pulling espresso shots. A system like that makes quite a bit of sense.
As for the barista making just 20k... it seems low but the cool thing about large parts of Europe is that it's very affordable on low wages. For example if I didn't have so much equity (more than 30k or so) I would get a roughly $300 subsidy from the state for my $1000 rent. My insurance is just $90 or so, but the state pays me $80 for it. Primary, secondary and tertiary education was all de facto free and I was able to study at some top institutions in the world (both here and North America and Asia, without paying more). As a starting entrepreneur I get tons of tax cuts and barely pay tax right now, and if I lose my job I don't get silly foodstamps, I get like 80% of what the Barista makes as long as I show I'm applying for jobs. Yet there's plenty of incentive for me to strife and do better, up to a certain (quite high) point when taxes scales are such that it makes little sense working more hours, but doing more productive or valuable work is still very rewarding, which results in a very decent work life balance, health etc.
In short, while Europe is very far from perfect, and while some countries have an easy position (e.g. Norway, resource rich, or the Netherlands, small and manageable), there is this tendency of Europeans to look at the US and think 'wtf?' when it comes to social and economic equality, work life balance, wage gaps, taxes, healthcare insurance, food stamps etc, which seem to be very poorly designed in the US, despite a tremendous amount of economic and sociological wisdom produced by American academia that ostensibly goes unnoticed by policy makers.
1) the assumption that intelligence can actually be measured (in which case it's really just "analytical intelligence"), 2) the assumption that other types of intelligence are less important, 3) the fact that you can't even measure creativity, period.
I have a 148 IQ (and I'm a programmer- of COURSE I have high analytical intelligence) and I have been consistently humbled by the "less intelligent."
You don't need to measure anything like intelligence or creativity to arrive at someone's market worth. Just measure, or estimate, the value of their output.
So: how much value are they creating that other humans are prepared to pay for?
You mean like physical ability is ridiculously overcompensated in sports? Yeah we really need to make sure to foster those people with obviously better genetics and weed out the inferior ones...
Class mobility is clearly not alive in Denmark if a doctor barely makes any more than a barista. Everyone being forced into roughly the same class is not class mobility.
It's more about getting value for money across he wider population in social support vs spending on a big military and government pushing funds to support the 0.001%
The military spending thing is a bit of a canard. There is great value in US military hegemony, and that value is not experienced only by the US. There are downsides to it, but compared to having Russia prime in Europe and China prime in Asia it's the least bad option.
He's progressive but tackles a subject many liberals and libertarians avoid: that overpopulation (from immigration) makes many problems worse, drives down workers’ wages, drives up inequality, drives up unemployment, leads to political disempowerment, and creates sprawling suburbs which destroy habitats.
These problems, he argues, fall disproportionally on the immigrants themselves and resident poor. He also talks about US policies which are causing problems outside the US, motivating people to move here in the first place.
So far its a compassionate treatment of the subject. He doesn't favor border control, and does favor amnesty to those here already.
It seems hard to talk about societies problems without talking about overpopulation.
> "overpopulation (from immigration) makes many problems worse, drives down workers’ wages, drives up inequality, drives up unemployment, leads to political disempowerment, and creates sprawling suburbs which destroy habitats."
You should see the equality statistics when you add workers working in Mexico and the US in the same diagram - see what their wages and unemployment rates and political empowerment look like before they immigrate.
As for habitats, forget the suburbs: the real habitat-mangler is agriculture.
a universe with just the US with immigrants from a lower socioeconomic status
vs a universe with just the US without those immigrants
and then sure, the net effect is that the 'without' universe is better because if you get immigrants with relatively (vs the current inhabitants) lower education, skills, literacy, networks, cultural cohesion etc, you inevitably reduce the average person's scores on those traits, that's just simple math. And those traits correlate with social and economic well being.
But the actual comparison is that the US isn't alone in the universe, the immigrants already exist, and they're better off in the US than not.
Now if you live in a world where you believe that because you're born in the US, something which is literally a blood right, which has nothing to do with merit, affords you the unique luxury of living in the US while others do not, then sure... the first comparison is your perspective. But if you consider yourself a human being who happened to live in the US, then the latter comparison is your perspective.
I mean it's obvious. Let's create an extreeeemely exaggerated comparison. Imagine a universe of twenty people, you and 9 others lived, solely, on some ocean paradise where food, health, education etc was 100% abundant, provided by sustainable robots. And you're rich, well educated, crime free etc. And then the other 10, poor people with little education, raised in a shithole environment of scarcity making him prone to crime as a tool for survival, and one of them wants to migrate to your island. Of COURSE your island will be worse off when it comes to security, education, cooperation etc, in the short term. But it still makes the world a better place to have him on the island instead of some shithole. And if carefully managed (e.g. 1 coming over every few years, resources dedicated to integrate these people, give them educational subsidies, mix them into your neighbourhoods instead of seclude them, give them representation and give them preferential treatment for jobs for the first few years), the negative effects would be minimised and temporary, and a few generations later it'd all be fine.
This is an extremely exaggerated and simplified story of course (to the point it's very paternalistic, even a bit racist) but I truly feel this is pretty much what a large part of the immigration debate boils down to. I don't think anyone questions that in the short term immigration from lower socioeconomic classes has slightly negative effects, but it's not really an anti-immigration argument for me.
It's absolutely absurd to try to assert that overpopulation is the root problem with a straight face when you're dealing with a system with such radical inequality.
Yes, piling more people into the box of fighting for a single-digit percent of a single-digit percent of the wealth in the US is rarely great for anyone, but the root problem is not the people being added but the minuscule scraps they're forced to fight for while the rich get richer.
Barring outliers like NYC, the US is centuries away from even population density _parity_ relative to most of the rest of the world.
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.
This exactly. Not to say that poverty isn't a problem, but anyone who actually wants to accomplish something on these issues needs to recognize that a lot of people and organizations benefit from making the problem appear to be as big as possible. Just because what they're trying to do sounds like a good and selfless cause at first doesn't mean that they aren't out for their own self-interest even if it's at the expense of the rich and the poor alike.
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.
At one point the guy says 'if we didn't raise the rents, the park wouldn't be here. It would be appropriated for something else' or something to that extent. And it's likely partially true. These guys are essentially following the market.
Is it fucked up? Yes. But the solution is probably not in preventing rent changes longer-term, the solution is tackling poverty. This notion that someone makes $700 a month and is disabled is just insane to me as a western European. The state has a responsibility here to provide a minimum living when someone can't work, or provide a programme for disabled workers and supplement any income that's still missing. How can you put the poverty line at $21k and provide income to a disabled person capping at $8.5k?
Obviously there are some things that ought to be done specifically about these trailer parks. For example laws that cap the rent increase per year are quite common. Increasing rent by 100% for existing contracts is totally illegal for example here in the Netherlands. Capping it at inflation + 2-3% is a common solution.
But that's a bandaid. Poverty at its core has to be tackled.
It seems that the problem is that zoning laws in most places prevent turning more land into more trailer parks, but it's not clear to me that those laws prevent some kind of vertical stacking.
I can imagine a few mechanical engineers taking on the task of building a frame of some kind that allows folks to vertically stack mobile homes up to 3 or 4 stories high with outdoor stairs. You have then effectively tripled or quadrupled the supply of rentable 'pads' which would keep it affordable for those on fixed income.
It's a creative idea, but mobile homes really aren't designed for that. The biggest problem would be poorly-insulated floors suddenly exposed to the open air at elevation, although perhaps some skirting could be developed to interface with the frame or the house below. However it seems that the idiosyncratic plumbing, siding, roofing, heating, etc. components particular to this style of home would not be robust to lifting to or existing at the heights required. Also I doubt the fire codes would ever be amended to allow this scenario.
You put the frame and stairs in a warehouse-style steel-framed building. That saves on some requirements for the housing units themselves.
Many zoning laws also include peak height restrictions, which limit the practical height of such a building to 3 stories. But factory-built homes are usually half the cost of a site-built home for the same usable floor area.
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.
> 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.
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.
> 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.
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.
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.
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.
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.
> 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.
It often isn't, but you're right that it definitely can be a nice place if set up properly. There's a mobile home community near me that is strictly for retired people with no juvenile children in the house; it's safer and cleaner than even some of the "nice" subdivisions in the area.
There's also a great place I stayed at on vacation in Florida several years ago. It's set up as a combination mobile home community and beach house rental business, where owners can lease their mobile homes via the management company to weekly beachgoers. Some owners live there year round (mostly retirees), others live there seasonally, and yet others just use it as a vacation home for a few weeks a year, and lease it out the rest of the year.
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.
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).
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.
You can actually find similar deals in a lot of small towns. I picked a couple of small towns I happen to have family connections to -- Hillsboro, KS and El Dorado Springs, MO -- and found houses listed in both places for $20k or less.
Actually the property was $43k, it's a 30 year loan I plan on paying off extremely early. And the other reply is correct, it's in Paulding County, Georgia.
Sure, but owning the entire property is a superior option because it means they are not paying anyone for the privilege of living there (minus taxes to the government).
Yeah, but the original idea was a social welfare plan. The target isn't those who will take initiative to find and buy a tiny parcel for their trailer (tiny parcels are a very hard thing to find), but the people stuck in a rut of trailer living. Its not about the opportunity already being there, it needs to be presented as a realistic option.
Something similar was done for a large percent of housing in Israel , in the 50-80's. Israel was a newly formed state, with massive immigration coming with pretty large economic challenges. And yet it worked out pretty well - and housing wasn't a big problem - and everybody could get a place to live.
Yes i know what a rakevet building(long building with say more than 5 entrances) is.They might not be that beautiful but functionality wise they are pretty decent. And many would prefer to have the option of living in such building than the current mess that is Israel housing today.
The US already has FHA loans that allow you to buy property with as little as 3.5% down, with the rest paid back over 30 years. They're backed by the government, so it isn't risky for the banks to give out the loans. My interest rate was 3.2%
I remember hearing that before this program was put in, you had to put 50% down on a house with the rest at 9-12% interest paid back over 5 years.
There's also nothing stopping people from pooling money together, investing in an apartment complex, and converting it to condominiums. You'd have to deal with people who don't pay, but I imagine you could get a lender to help you out if you had an entire community ready to pay them back.
There are lots of barriers actually. These folks are usually poorly educated and pretty clueless about ownership and financing. These are folks using check cashing, payday loans and title loans.
They are caught in a cycle of learned helplessness and poverty. You need to give them support in the form of counseling and other things to get them to be successful owners.
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.
>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.
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.
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.
Prop 13 kicked in in 1978, so 37 years ago. I wonder if there's any way to find out the percentage of homes purchased after 1978. My intuition tells me that most home would have churned by now, since most people who owned prior to 1978 would be in retirement or close to it.
Also, Prop 13 still allows for increased assessments; they're just capped at 2% annually unless the property is sold. Considering the housing boom/bust cycle in CA has been pretty bad, 2% seems equitable.
>Also, Prop 13 still allows for increased assessments; they're just capped at 2% annually unless the property is sold. Considering the housing boom/bust cycle in CA has been pretty bad, 2% seems equitable.
The boom/bust cycle was exacerbated by capping it at 2%.
Property taxes are not raised or lowered, incidentally. They're a flow of income that is redirected from homeowners to the state or back again. Of course, home values increase substantially if homeowners can capture that stream of income derived from the value of the land. Hence the crazzzzzy house prices in California.
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.
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.
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.
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.
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.
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).
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?”
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!
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.
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?
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.
^^ 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.
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.
"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?
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.
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.
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.
> 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?
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.
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.
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.
Structurally, and in my opinion, good homes built before the mid 1950s are way better than anything today. The lumber was better, finishing work is better and materials are better. Keep a food roof on them and they will be around in 200 years.
The new stuff is built cheap with lots of glue and questionable durability.
In my area (upstate ny) you can find houses built in the 1850s easily. A few can be found back to the 300+ age range. There aren't many because we had few people back then and city growth over the years razed many.
> 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.
That's frankly a ludicrous house. The house I grew up in is nearly 200 years old, and it's certainly nothing special and not on any historical registries. Many houses in the Northeast are of a similar age.
No 100 year old houses?! My first house was 220 years old in NH and the house I own now is ~95 years old in a city with hundreds, if not thousands of 100 year old homes. Yes, a few are on a registry (Colonial era houses near Harvard Sq and a few along the river) but the vast majority are not.
Haha, I should stipulate that I don't mean to diminish how special anyone's particular 15th-century greek-revival saltbox bungalow is. That was kind of my point.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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?)
"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.
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%.
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.
Consider that zoning laws in the UK make agricultural land incredibly cheap. This means people with means can basically wander around buying the countryside.
So even if the laws are ever repealed or changed, it doesn't matter - you've just given a windfall to those with wealth.
I have kind of always had this thought that the real world has to eventually turn into a late stage game of Monopoly in which some people just own everything. If you have the resources to buy a large portion of e.g. all property in London, you can basically set the market rental rate because it's inelastic. The only option people have is to move away and try to jump start another city.
I actually think that a reasonable way to think of inequality is that it is bad because it produces negative feedback loops.
Firstly, it's a lower competition environment; those with less money are generally not able to become landlords or business owners etc, so the original owners win more and more.
Secondly, the fact that this happens results in more inequality and results in... even less competition.
Hence there is no need to invoke moral arguments; inequality, at least beyond some reasonable level, is simply inefficient. It prevents markets from operating well and allows economic rent.
I have feared this would happen, and it's pretty much here.
The "this" is the wealthy buying up all rentable property, and raising rents until disposable income is close to 0% for many people.
In the past, I had a jobs that entailed collecting rent from tenants--and I hated the job. This is what bother me the most; I hated going to the door, or unit(mini-storages), and asking for that huge chunk of money each month. In every case, the family, or person was at the complete mercy of the Landord. I never met a Landord who didn't look for a reason to raise rents.
These Landlords knew the pain their rate increases would cause, and would hire guys like me(poor and needed a job) to do their dirty work. I think what bother me the most is when market rates went down--so many Landlords let their property sit idle until the market picked up.
I don't know the answer other than Landlords should get morality implants? I didn't mean to high jack stegosaurus' comment--I just don't like to see this imprisionment taking place so nonshalonant, like it's just business? It's not just business. Your business is affecting people lives on a very personal level.
It comes down to I don't want to live in a society that's so bifurcated. I see it happening and I don't like it. The disparity of income is here; I just can't keep acting like making money off the struggling, and dependent is copacetic!
(I used the word copacetic because when I was in school, I worked at a mini-storage. My manager who lived on the premises, with his wife, was the nicest guy. I saw how he struggled financially. Copacetic was my manager's favorite word. Whenever, I use it I hope he is doing well. I remember the look on his face when he had to tell people being close homeless, the owner is raising rents again. I'm even in denial. There were many people living out of their cars, and putting their few possessions in the units--they were homeless. Anyway, stay out of mini-storages if you can. I saw so many people put their stuff in and never get it out. They couldn't part with their stuff, and became perpetual tenants. Those were the lucky ones. The unlucky ones were already homeless.)
Yeah, while I generally support the freemarket, something as finite and important as property to live in shouldn't be at the mercy of it.
Near London we're living in a world where middle earners just 20-30 years older than us were able to get property at resonable prices, sit on them, and now someone earning in the top 1% will struggle to buy anything decent.
Further to that, the only property taxes we have here are council tax. Remove all the funiture from your property and leave it empty and you don't need to pay this. I'd argue that's backwards and what we should really be doing is taxing on levels based on empty, rented and living in, with taxes being prohibitly expensive to sit leaving a house empty.
Of course, being 40 and above has had left you with ample oppertunity to milk the status quo, so you're not voting for this and neither are those who inherit from it.
Most of what people put in mini-storage isn't worth even one month's rent on the unit. You're better off taking the stuff to the dump, and then re-buying it in the unlikely event you'll ever need it again.
People tend to have a hard time, when faced with a decision that contains two bad choices. Making the least bad choice, even when necessary, causes a lot of mental anguish and there's a strong desire to concoct a fictional third choice that magically absolves everyone from guilt.
We know from varying urban policy around the world that not raising rents is in many ways worse than raising rents. If the rent becomes too disconnected from market pricing, the shock of any dislocation is life ruining. Dislocation is always going to happen, buildings get sold, they need to get torn down, accidents render it uninhabitable etc. Better to have the rent raised gradually so people can proactively make decisions to alter their circumstances than for it to happen all at once.
Those landlords weren't suffering from a morality deficiency, they simply recognized that you're often confronted with hard choices in life and it's best to remain unsentimental about making the least bad one.
How can bailiffs live with themselves? 99.9% of the time their job involves taking from the poor to give to the rich. The justification is some shaky concept of 'legal ownership' which is often just codified exploitation.
I would rather end myself and my family than do that sort of job. You are a direct agent of evil. Your actions cause massive anguish towards the poor and barely even move the needle for the owners.
What led to you taking the job in the first place? Had to feed the family? (Another reason we need to institute a basic income - a system that can force people into doing bad things just to eat is broken...)
> the resources to buy a large portion of e.g. all property in London
Won't work in a free market. People will figure out what you're doing, and the remaining property owners will raise their prices until the buyer can no longer pay. This is why Eminent Domain exists, otherwise one homeowner can block a freeway project. It's also why the Hunt Bros failed to corner the silver market.
The group of people that can afford to do this can do it. Prices are fairly inelastic so there's not that much competition.
You can't just double the rent one year, but rents across the board can move in lockstep (and are sort of forced to as people decide x% yield is normal).
Treat London as a series of interconnected towns, and you can monopolise any one of those (normally via inheritance). If there's a free market, the people don't have a chance to figure that out: it's already over.
Large landowners have sufficient economic and political power to fight back against eminent domain - and likely even with the support of their local people - so that's not a done deal either.
The Duke of Westminster owns a large chunk of Mayfair and Belgravia, and is the third richest man in the UK because of it. I do wonder whether he plays Monopoly, and if he starts with Mayfair...
The thing is that there is actually an awful lot of land, and in the UK it is very expensive - the capital cost to buy it all up would be enormous, and thanks to the market only get higher as supply reduces. You're then vulnerable to other market forces and competing with other cities or areas. Canary Wharf is a good example of the established rules being upended and a brand new corporate part of London being created.
The value of all London property is currently estimated in the £1.35tn range.
I don't get why would there by less business owners. Sure, monopolistic landlords can raise prices, but if there are (say) 200k places to set up small businesses in -shops, factories, offices, etc- presumably those still get rented, only at an higher price, so there should be the same amount of new small business being created, no? Or are you saying that there are many such places left not rented?
It's improved now, but after the financial crisis most high streets had a lot of empty shops. A lot of businesses went bust and the landlords raised the prices of the remaining tenants which forced more out. In poorer parts of the country it's still the case. Even the Starbucks in my hometown shut down!
I don't really get why landlords are raising the prices if it's leaving their shopfronts empty.
One possible motivation for this is indeed monopoly or collusion - if I own a significant percentage of the shopfronts, I can charge an unfairly high premium (and then I won't care if some remain empty).
If I own just a few shopfronts, and compete with other landlords, I should care a lot if my shop remains empty.
It may be different in the UK, but here in the US the landlords of shopping centers make mortgage payments only on the space actually rented. Lose a tenant, and their monthly bill shrinks.
Yeah, it amazed me, too. However, the guy who explained it to me makes part of his living as a commercial landlord. I assume he knows the game.
In Australia, commercial property owners frequently leave properties empty for long periods to ensure they maintain the high asking price and avoid drops in the expected pricing.
Sam Zell’s 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.
I first read up on Zell when EQR took over my low-income housing in East Palo Alto a few years ago. It's clear that his investment strategy is so unethical it borders on despicable. Zell's entire fortune is built on exploiting the REIT tax loophole:
Equity Residential, a real estate investment trust (REIT), engages in the acquisition, development, and management of multifamily properties in the United States. As of December 31, 2007, it owned and invested in 579 properties in 24 states and the District of Columbia consisting of 152,821 units. The company qualifies as a REIT for federal income tax purposes. As a REIT, it would not be subject to federal income tax to the extent that it distributes at least 90% of its taxable income to its shareholders. Equity Residential was founded in 1966 and is headquartered in Chicago, Illinois. (sources: http://finance.yahoo.com/q/pr?s=EQR, http://finance.yahoo.com/q/pr?s=ELS)
So what happens to a community when all of its wealth is getting funneled out tax-free? To just a handful of ridiculously overpaid executives who get tax-free compensation?
IANATaxLawyer, but this seems like a misrepresentation. Those who own REITs do pay taxes on any income they receive from those. It's just that the REIT itself is not paying tax first. Are you actually objecting that REIT income is not subject to "double" corporate taxation about which tax reformers occasionally complain? This seems silly, in light of how many corporations arrange to pay "zero" income tax.
An REIT in Chicago, Illinois which is able to come in and quite literally leech the low-income wealth of a community in East Palo Alto ...yes, that REIT should have to pay the city of EPA or the state of California for that "opportunity".
Should it be paid for in the form of another tax? Maybe, but that is not always efficient, as you pointed out. So how else could it pay? How about in direct shares given to residents of takeover properties in exchange for their rent or rent increases? I like that idea better. Because whether it's rent or shares... they're both going into the REIT's bankroll; this might actually make renting an appealing opportunity (and create the good kind of competition among landlords) if renters could (or had to be) paid a refund or rebate based on REIT dividends.
Maybe this is what Eisenhower originally envisioned.. it was the 1960's and the Interstate highway system was still being developed.
Let the wealth and assets of a city/community stay in the city. Residents with more disposable income (especially low-income) tend to spend it locally -- or let them save to be able to buy their way out of the slavery of renting.
The REIT is making an investment in the housing; they're due a return, otherwise no one will invest in this type of housing, and thus there will be no housing. Pretty simple economics. No return on investment, no investment.
And the REIT does pay taxes to EPA, property taxes. If they have employees based in CA, they pay payroll taxes as well. It's not as if some faceless Borg is siphoning out the good people of EPA's money without contributing anything.
> he REIT is making an investment in the housing; they're due a return
That is not how investments work. No one is "due" anything. You seem to be saying strong-arm tactics are OK on vulnerable populations because profit is at stake.
The argument as I've seen it is that society will be better off in terms of various measures: equality, innovation, opportunity, peace, etc. That seems easier to sell than anyone "owing" anything.
"this might actually make renting an appealing opportunity (and create the good kind of competition among landlords) if renters could (or had to be) paid a refund or rebate based on REIT dividends."
So basically renting would be more appealing if....the rent was less? Well sure. Nearly all purchasers off goods would enjoy lower prices!
It's tax free for the REIT. If it were a C corp, it'd have to pay tax on earnings, and the shareholders would also have to pay tax on dividends. So for the REIT there's a meaningful sense in which "tax-free" applies.
IANAAmerican, but would that change where the tax goes? Would that mean the city receives less tax that would help the poor that are the ones at the centre of it? I'm honestly curious, I don't know enough about how US tax works.
As someone else pointed out, property tax is entirely different and does not fall under the category of "federal tax" (it's actually at the county level with city level additions). EPA is getting property tax.
If they were a normal real estate company (not an REIT) and they were based in Palo Alto with properties in East Palo Alto, East Palo Alto still wouldn't see a dime of any non-property tax.
You get to watch Sam Zell screw over the employees of the Tribune Corporation, use their pension money and assets to service the debt, then run the corporation into the ground while Mr. Zell plays publisher and CEO?
Using city governments to tighten the supply of accommodation via zoning laws is only half the story. Using the national government to boost the demand for it via increased immigration is the other half. Countries like Australia and Canada have mastered this, and the parts of the US that didn't experience falls in the price of residential accommodation after 2008 were the places popular with immigrants, particularly those from Asia, like from Seattle down to San Jose. One city currently with high rental costs and property prices is Auckland New Zealand, where the city and the country are almost the same entity, if you get what I mean. Because of onerous zoning laws and a high influx of immigrants and international students, the supply is restricted and the demand is boosted, resulting in skyrocketing rental and sale prices for residential property.
yes, the overclass is hitting us with a one-two punch--restrict supply and increase demand....
the key is that we cannot control our own government...
I am at my core anti-libertarian because I realize that man is a social animal. But if libertarianism were to truly be applied at the national level, then the fed govt would have little power, and the local govt is more amenable to control by the people. Which might make things a little better.
Another problem however is propaganda control of the masses via the educational curriculum, which has warped the worldviews of young americans. That problem will not go away for a long time. I speak here of fake leftism.
> 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
The article does in fact mention this, but it probably should have dwelled on it some more.
> ... tells his students they can easily increase the rent even at
> parks that are already charging market rates, because there is
> so much demand for affordable housing and local authorities
> are very reluctant to grant permission for new parks.
good point--I missed those few words buried in the article, which successfully hides that crucial idea by using the idea that trailer parks are for sex offenders. The "trailer parks are for sex offenders" idea will hide the real truth.
The media never busts a money scam of the overclass until there is no money left in it. After all, it is the money scams of the overclass that provide much of the media ad revenue.
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.
I'd upvote this twice if I could. Human settlements require water more than anything else. No water; no city.
If you want to develop more or larger cities in the southwest, that requires a megaproject--several, actually. You burrow a tunnel canal from the Gulf of California into Laguna Salada. From there, you burrow on to the Salton Trough. And you create a similar tunnel canal from the Pacific into Death Valley. That's part A.
For part B, you build some new nuclear plants whose energy output goes entirely into creating artificial clouds on the shores of those artificial inland seas, along with Mono Lake, Lake Crowley, Lake Tahoe, Goose Lake, Pyramid Lake, Great Salt Lake, Utah Lake, Sevier Lake--anywhere that has enough volume that the cloud generators won't dry it up between rains. For the rains needed to keep the freshwater lakes filled, you will have also build evaporators on the ocean coast.
The point is to "bounce" that rainwater over the Rocky Mountains, so that the vast rain shadow east of them gets more precipitation. Though it sounds like an insanely expensive project (it would be), by far the cheapest way to move large amounts of water over long distances is to build a cloud upwind of where you want the water to be, and then collect it from the river for that watershed.
The second cheapest way would be to move your water very slowly through an existing aquifer. So for part C, you also pierce the caliche in several places over the Ogallalla aquifer. The rain "bounced" over the mountains can then partially drain into one end of the aquifer.
I'm thinking the energy to boil the amount of water which falls naturally on California is about 500 times what the electrical grid currently delivers (300,000 Gwh). Estimating avg rain fall over the state at 15 in = 38.1 cm, so 1.62 x 10^14 liters.
You don't need to boil water to create an artificial cloud. Or at least you don't need to heat it to vapor pressure of one whole atmosphere.
The freshwater sources wouldn't necessarily need to deal with the phase change energy, but the saltwater sources would have to be desalinated. It would still be a huge, huge amount of energy. And it would have to be added to the water multiple times, for each time it rains out before crossing the mountains.
Much easier to just build the cities closer to where the water falls naturally.
The real problem with most of the American southwest, including and especially Colorado, is that the watershed can't support any more people. What we need out here is less people, not more. Just because the land is "empty" doesn't mean we can or should attempt to move people there.
Agriculture, particularly meat and dairy, account for half of water usage in California. Texas usage is trending toward oil and gas using a dangerously large amount of water (fracking requires billions of gallons of water at the scale it happens in persistently drought stricken Texas). I am not familiar with New Mexico or Arizona or Nevada, but it would not be surprising to find that one or more industries dominate water usage, and in ways that are not sustainable or responsible.
Water usage by individuals, for cleaning and cooking and drinking, is often miniscule, in comparison to industrial usage.
Stop fracking. It's the most expensive way to get oil out of the ground, and wouldn't be cost-comparable to renewable energy sources if the industry wasn't empowered to use dangerous amounts of water in drought-stricken areas, use eminent domain to steal land for pipelines, and generally externalize every cost, making everyone who doesn't have lobbyists foot the bill for their reckless behavior. At this point, the only reason fracking is profitable is because government is propping it up. Solar and wind (particularly in places like Texas, California and the southwest) is cost-competitive (or even cheaper, if you calculate long-term, because solar panels and wind farms have a very long productive lifetime and quite low ongoing costs, unlike oil and gas), if you take away the crutches that our government provides oil.
As for food, meat and dairy doesn't need to be produced in water-starved environments (and probably doesn't need to be consumed at the rate that Americans consume meat and dairy). Again, industry gets a pass and gets to socialize environmental costs that they simply shouldn't be able to externalize. But, he who has the money and the lobbyists makes the laws.
You could have a lot more people in those places if their water use were more efficient.
This is the kind of thing that markets can actually solve pretty well, as they allow people to adjust their usage to prices. Naturally, prices must be in tune with actual costs.
I guess that's a valid point, that I hadn't considered. But surely there's a way to provide water. We're talking about a population shift, not a population increase so the country's net water usage should not increase. Maybe giant water collectors that obtain moisture from the atmosphere?
> with retail and industrial zones to provide employment.
That's the real trick. Building a new community is a two sided market: you either have to convince companies to go there without a local labor supply or people to go there without jobs.
Historically it's been both simultaneously. People decide to settle somewhere, open up a farm or retail business or perhaps a manufacturing operation to service others who have moved there, and it snowballs.
But as others point out, water may be the limiting factor. I have to believe, though, that there are vast swatches of the country that are close by to rivers or other water supplies, that are economically feasible to settle, and there should be a way to get these going, perhaps by unlocking federal land, selling it cheaply to low income folks (many of whom will turn around and sell it to real estate sharks for a quick buck, but perhaps enough will actually want to live there).
"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.