American Trailer Parks: The owners are getting rich
theguardian.com
theguardian.com
"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.
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.
Barista: http://en-sv.statsskuld.se/lonestatistik/for-Barista-523/
GP: http://en-sv.statsskuld.se/lonestatistik/for-Husl%C3%A4kare-...
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.
(edit: english language links)
Gross: Net per month, SEK
15000: 12408
20000: 16080
25000: 19753
30000: 23424
35000: 26931
40000: 29827
45000: 32334
50000: 34842
55000: 37220
60000: 39374In 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.
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.
Sweden 38.7
Iceland 34.6
Denmark 34.2
Finland 29.1
United Kingdom 27.7
United States of America 24.2
http://kff.org/global-indicator/physicians/
(You can click the boxes in the panel on the left to generate easy comparisons)
Data supposedly taken from WHO stats:
http://www.who.int/gho/publications/world_health_statistics/...
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.
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.
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 :)
Do you really value money that much, that it would guide major life decisions (like how you spend your life)?
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).
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.
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.
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.
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.
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.
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.
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.
If your calling in life is to pull espresso shots, I think you should pull espresso shots.
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.
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.
The argument for capitalism is not about equality, but relative mobility compared to other systems. That mobility creates incentive and thus growth.
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.
False. The AMA lobbying activities were not successful and in fact they have been trying to expand. The limiting factor is residency.
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?
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?
Are we? Being a Nordic citizen, I'd like to hear more about this. Can you give me some pointers?
They take different forms in each nation but they all end up being about "free market good, government bad".
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%
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.
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.
This is the comparison it feels like he's making:
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.
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.
20k for a 3-person household is a lot different than an individual earning under 20k which is where your numbers come from. in fact it's about 200% different.
39% or 125 million americans do not live in poverty.
the real number is still shitty, but it's not nearly half, it's closer to 20%, or in statistical terms the bottom quintile, which is pretty much what you would expect given the nature of the US economy/politics.
http://money.cnn.com/2014/10/16/news/economy/48-million-amer...
Personal attacks are not allowed on Hacker News. Please don't do this. The comment would be fine without the first sentence.
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.
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.
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.
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.
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.
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.
In SFO or similar places, it definitely a core part of the problem.
Which is a play on the Walmart wage model.
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.
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.
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.
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.
Is it socialism? Sure. The good kind.
There are a lot of ways to hack our legal and financial systems to literally make the world a better place. Problem is: they don't make anyone rich.
Renting has value that is appropriate for some people. Ownership is not always the answer.
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.
http://www.realtor.com/realestateandhomes-detail/147-Mill-Cr... shows a mobile home on 0.49 acres in the area. Zillow shows several recently sold homes in the area for $25k and under.
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.
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.
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.
The only real fix is for some entity to flood the market by building and selling houses at a fixed price.
What housing loans do is simply inflating and re-inflating property bubbles.
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.
Or, you know, a non-profit organization.
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.
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.
Compared to the 1%? Fuck yes. Does the 1% dole out social security? Build schools? Roads? I don't think so.
>property taxes can be very regressive for low income home owners.
Not unless it's designed to be regressive (e.g. a poll tax instead of based upon the value of the property).
Property taxes are naturally progressive - the more your property is worth, the more you pay in tax.
He also promised that rents would go down (which, of course, they didn't).
A lot of California home owners are now sitting on gold mines thanks to this proposition.
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.
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.
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.
“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).
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?”
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.
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?
^^ 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.
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.
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?
ELS only has ~370 communities. The 140,000 is accurate but is the number of individual sites/lots which that ~370 communities represent.
I don't buy the "it creates market liquidity" argument for one minute ... we'd find the liquidity the market needs elsewhere.
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.
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?
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.
Trailers are cars with beds. They only go down.
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.
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.
http://www.irs.gov/publications/p527/ch02.html
It is land that gains in value, unless the house is unusual in some way.
It is a myth that houses always appreciate. Real estate bubbles have occurred over and over again, dating back to ancient times.
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.
[32804]: http://www.orlandoweekly.com/orlando/the-scarlet-letter/Cont...
http://www.publicintegrity.org/2015/04/03/17024/warren-buffe...
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.
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.
The surprise here is that the ghettoization of identifiable groups is not unintentional; in fact, it's planned.
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.
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.)
Good night people!
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.
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...)
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).
http://www.standard.co.uk/home/who-owns-london-6308427.html
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 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.
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.
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.
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.
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.
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.
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.
That sounds rubbish.
So basically renting would be more appealing if....the rent was less? Well sure. Nearly all purchasers off goods would enjoy lower prices!
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.
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
> ... 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.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.
Who cares if you get downvoted? Please share your insight.
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.
Water?
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.
http://ponce.sdsu.edu/california_average_annual_precipitation.html
http://energyalmanac.ca.gov/electricity/total_system_power.htmlThe 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.
Water usage by individuals, for cleaning and cooking and drinking, is often miniscule, in comparison to industrial usage.
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.
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.
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.
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).