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Study finds that landlords exploit the poor


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2019 Apr 8, 1:49am   3,479 views  56 comments

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•A new study examined the profits of landlords across Milwaukee and compared them to landlord profits nationwide.

•They found that for every 10 percent increase in neighborhood poverty, renter exploitation increased by 2.2 percent in Milwaukee and 0.8 percent nationwide. What's more, for every 10 percent increase in black residents, renter exploitation increased by 0.8 percent for both Milwaukee and the nation.

•This effect ensures that the poor remain poor; since the poor have no choice but to pay rent when they can, any money they could save up is instead siphoned away by landlords.

Anybody who's ever been in poverty before can tell you: It's expensive to be poor. Wealthy people can afford to buy high-quality, long-lasting products or to buy other products in bulk. Not true for the poor. With few resources to spare, the impoverished have to buy crappy cars that constantly need repairs and work physically demanding, minimum-wage jobs that can result in expensive healthcare costs. If you're poor and need a loan, the only one you're going to get will come with a high interest rate attached, reflecting the lender's concerns that you won't pay it back.

Now, new research in the American Journal of Sociology demonstrates how rent is another method by which the poor are kept poor.

Surprisingly, the researchers found that the best way for a landlord to make money is not to buy a house in an affluent neighborhood and rent it out. Instead, the most money is to be found by exploiting the slums.

More: https://bigthink.com/politics-current-affairs/poverty-rent

#Homelessness #Race #Sociology #Society #UnitedStates #Poverty #Housing #Renting

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1   FuckTheMainstreamMedia   2019 Apr 8, 7:09am  

They should try not buying things that they can’t afford...like cars...until they work long wnough at two jobs to afford to buy a good car for cash.

That was easy, right?
2   Goran_K   2019 Apr 8, 7:15am  

I like made up fantasy SJW pseudo-science terms like “renter exploitation rate”, that’s how you know anything that follows is complete bullshit.
3   Onvacation   2019 Apr 8, 7:18am  

Most impoverished people have nicer phones than me, much nicer.
4   NuttBoxer   2019 Apr 8, 7:32am  

I'm not sure it's directly related to income. In my experience I've found landlords are generally less well-versed in the law than I am, and assume the landlord/tenant relationship is one where they hold all the power, rather than a mutually beneficial partnership. Especially in California, the latter is never true.

Property managers tend to be the most by the book, as you'd expect. Private owners have varied widely for us. My advise to any renter is to document the shit out of your move in, LOTS of pictures. Report every little thing, on the move-in inspection, whether you think it's significant or not. And make sure every maintenance request is submitted in writing(email works). Also, don't fix ANYTHING yourself until you know for a fact that the owner will treat you fairly. I mean don't even change a light-bulb.
5   anonymous   2019 Apr 8, 7:40am  

My last landlord between owning houses was never seen, I only dealt with the property manager. All requests were done via email and or letter backup and never had any problems with her but I suspect this is not the normal case. There were no requests turned down as well.

Routine maintenance was expected if I could do it and I submitted any invoices to the property manager and was promptly reimbursed.

From 2009 to 2014 she requested one $50 per month increase in rent a year or so prior to moving out which I suspect was at the behest of the property manager who was also a real estate agent. After the increase I was paying $1250 a month for 1450 sq ft house backing up to a manmade lake in a 55 and older community

The house was left in as good or better condition that when the move in occurred.
6   Goran_K   2019 Apr 8, 8:23am  

Onvacation says
Most impoverished people have nicer phones than me, much nicer.


Have you seen SNAP/TANF/EBT users at the grocery store?

I saw a woman hauling out TWO full carts of food one day in line. One pushed by her and one pushed by her extremely obese daughter. Daughter was probably 12-14 and probably weighed a good 225. Easily $500 worth of groceries in that one trip for them. I saw her whip out the good old "state issued" VISA card and swipe like it was no one's business.

The United States is one of the few countries where the poor people are obese.
7   clambo   2019 Apr 8, 9:09am  

Landlords can indeed suck dog dick.

My father retired and lived in a very nice 3 bedroom apartment in a great area of Palm Beach County; a couple of miles away Michael Jordan has a 20,000 sq. ft. mansion.

I was there with him and stayed a while after he had an accident at age 95.

I was leaving and among his huge collection of papers I found his original lease agreement; he paid almost $5000 to move in to the place; 1st, last, plus a deposit.

I left about a month ago and I have not received a refund of his deposit. The place was perfect when I departed; I filled and painted over every small hole left by hanging paintings, I left the place spotless and perfect.

The landlords owe me over $2000 but not a word from them since they know I have moved out of state and can't fight them from California.
8   FortWayneAsNancyPelosiHaircut   2019 Apr 8, 9:23am  

Kaki did you bring your hammer and sickle with you today?
9   HeadSet   2019 Apr 8, 10:02am  

I left about a month ago and I have not received a refund of his deposit.

In Virginia, and likely in CA, not returning the deposit or a item deduction list and the remainder of the deposit within 30 days means the landlord forfeits all claims to holding any of the deposit. At day 31, if you did not get the deposit/deduction list, it is just quick filing at the courthouse. The judge will award the tenant the full deposit plus and reasonable attorney's fees, end of discussion.
10   Goran_K   2019 Apr 8, 10:21am  

HeadSet says
I left about a month ago and I have not received a refund of his deposit.

In Virginia, and likely in CA, not returning the deposit or a item deduction list and the remainder of the deposit within 30 days means the landlord forfeits all claims to holding any of the deposit. At day 31, if you did not get the deposit/deduction list, it is just quick filing at the courthouse. The judge will award the tenant the full deposit plus and reasonable attorney's fees, end of discussion.


This.

You should definitely fight this in court.
11   zzyzzx   2019 Apr 8, 11:51am  

If you can't exploit the poor, then freedom has no meaning!
12   NuttBoxer   2019 Apr 8, 12:41pm  

HeadSet says
In Virginia, and likely in CA, not returning the deposit or a item deduction list and the remainder of the deposit within 30 days means the landlord forfeits all claims to holding any of the deposit.


In California the limit is 21 days, but after that all you can do is file a small claims suit.
13   NuttBoxer   2019 Apr 8, 12:42pm  

clambo says
The landlords owe me over $2000 but not a word from them since they know I have moved out of state and can't fight them from California.


Not sure what Florida allows you to do, but might be worth a trip back.
14   anonymous   2019 Apr 8, 12:45pm  

clambo says
The landlords owe me over $2000 but not a word from them since they know I have moved out of state and can't fight them from California.


Contact the following in the State of Florida:

Department of Consumer Affairs

Attorney General's Office

Any and all of those local television and newspaper columns/editors that help out consumers.

File a lawsuit in small claims court as well - even if u have to go back to Florida to do it.
15   Heraclitusstudent   2019 Apr 8, 12:50pm  

Kakistocracy says
•They found that for every 10 percent increase in neighborhood poverty, renter exploitation increased by 2.2 percent in Milwaukee and 0.8 percent nationwide. What's more, for every 10 percent increase in black residents, renter exploitation increased by 0.8 percent for both Milwaukee and the nation.

•This effect ensures that the poor remain poor; since the poor have no choice but to pay rent when they can, any money they could save up is instead siphoned away by landlords.


This post makes no sense.
We all know housing is expensive. It is more expensive to buy in fact.
So what is the claim exactly?
The poor obviously get something for the money they pay. Landlords pay taxes, maintenance, have to deal with damages, tenants who don't pay, etc...
If being a landlord was the road to wealth it would be known by now.
16   MisdemeanorRebel   2019 Apr 8, 1:08pm  

Goran_K says
The United States is one of the few countries where the poor people are obese.




Many countries that swipe a UN EBT card are also obese.
17   RWSGFY   2019 Apr 8, 2:37pm  

NuttBoxer says
In California the limit is 21 days, but after that all you can do is file a small claims suit.


And win easily.
18   clambo   2019 Apr 8, 2:53pm  

Thanks for the comments with suggestions about my problem with landlords.
19   anonymous   2019 Apr 8, 5:34pm  

Heraclitusstudent says
If being a landlord was the road to wealth it would be known by now.


It can be and it is well known.

Heraclitusstudent says
The poor obviously get something for the money they pay


So do the non-poor who often see rent reductions as is happening now but slumlords have a take it or leave it clientele with little to no choices
20   anonymous   2019 Apr 8, 5:36pm  

MisterLearnToCode says
The United States is one of the few countries where the poor people are obese.


Maybe that has to do with what is food choices are available nearby, education or the lack thereof and outright gluttony and obese poor is not limited to one race.

There are areas around here in primarily poorer neighborhoods that have no grocery store of even marginally reasonable quality with walking distance for a lot of residents or even a decent bus ride.

Go father out and the problem is compounded because their is no public transportation.
21   Booger   2019 Apr 8, 5:37pm  

Kakistocracy says
Maybe that has to do with what is food choices are available nearby, education or the lack thereof and outright gluttony


And lack of self control.
22   anonymous   2019 Apr 8, 5:40pm  

Booger says
And lack of self control.


That is the gluttony part - there are a few pay one price eat all you can restaurants around here - scary places when you see someone who has to use two chairs to sit solo plus the food is dismal.

Then again self control is not universal - so many other things at play - we can not see underlying medical issues - like an iceberg we see only one part of the person.

Lack of self control is handy excuse for addicts and alcoholics as well.
23   anonymous   2019 Apr 8, 5:44pm  

Back to the topic the article was about poor people seeing rent increases mostly from slumlords who can do whatever they want more or less including not doing the needed repairs as opposed to those better off who can move, see rent reductions based on market conditions etc.,
24   Heraclitusstudent   2019 Apr 8, 5:44pm  

Kakistocracy says
It can be and it is well known.

Right, with a yield of about 3% below a utility stock, except it demands far more work and is far less liquid.
And renting is famously cheaper than buying, in 2019, so?

Kakistocracy says
So do the non-poor who often see rent reductions as is happening now but slumlords have a take it or leave it clientele with little to no choices

So your post here is to object to inflexible landlords?
Or just a "Poor poor" complaint?
Or just rich people are evil, by default, rant?
Or a "why can't poor people get the shit they need for free?" rant?
25   anonymous   2019 Apr 8, 5:51pm  

Heraclitusstudent says
So your post here is to object to inflexible landlords?
Or just a "Poor poor" complaint?
Or just rich people are evil, by default, rant?
Or a "why can't poor people get the shit they need for free?" rant?


Going to let you define that - I'm sure you've already made a decision. What is it anyway ?
26   anonymous   2019 Apr 8, 5:52pm  

Heraclitusstudent says
Right, with a yield of about 3% below a utility stock, except it demands far more work and is far less liquid.


Wonder why so many wealthy people are heavily invested in real estate - there are quite a few very successful landlords on this forum or there used to be
27   RWSGFY   2019 Apr 8, 6:02pm  

Kakistocracy says

That is the gluttony part


Only in US "poor" and "gluttony" can be used in one sentence, lol.
28   Heraclitusstudent   2019 Apr 8, 6:25pm  

Kakistocracy says
Wonder why so many wealthy people are heavily invested in real estate - there are quite a few very successful landlords on this forum or there used to be

I'm guessing most people "investing" in real estate are in fact in for the appreciation, not for the rent. Except maybe retired people getting a living income from renting.
Once in a while, they lose their shirts.
29   Reality   2019 Apr 8, 6:30pm  

The so-called "study" is laughable and only shows the financial/economic illiteracy of the author, on top of academic dishonesty.

1. An earlier version of the article a few hours ago claimed monthly rent in affluent neighborhood amounted to 10% of property value, whereas monthly rent in poverty-stricken neighborhoods amounted to 25% of property value. The numbers were obviously orders of magnitude larger than what they are in real life. The article has since been revised to drop those numbers, The author was clearly terrible at basic math.

2. The rental-yield methodology itself was severely flawed: the higher risk of non-payment and eviction rates in poor neighborhoods obviously would require higher nominal rental-yield to compensate the risk. Likewise, the higher rates of property damage, theft and crime rate risk to owners.

3. Landlords in better neighborhoods willing to take losses on cash flow in order to capture capital appreciation on the property are in effect subsidizing their tenants. The fact that landlords in worse neighborhoods with no hope of appreciation don't subsidize their tenants is not a valid argument for "exploitation"; the very fact that landlords have to dig into their expected/hoped-for capital gains to subsidize renters in good neighborhoods is evidence that residential rental markets are highly competitive.

4. Owning multiple buildings being more profitable seems to be an argument for the owner's experience (instead of amateurish/beginner single-property landlords), not a valid argument "exploitation" unless the author whats to argue that an experienced worker making more money is exploiting less experienced workers and customers!

5. We live in a world where Wall Street directly invested in trailer parks during the last down-turn, and developers forcibly integrated previously "whites-only" neighborhoods as far back as the 1950's and 60's, despite vehement objection from existing community members, all in the name of profit! The search for profitability would long have arbitraged away the risk-adjusted profit margin difference between neighborhoods if there were no fundamental differences at work. What the statistics from the so-called "study" shows is really the stark difference in tenant quality in different neighborhoods. It's a little like lenders can give low interest rate to people with high FICO scores in the 750+, but have to charge higher interest rates to those with sub-400 FICO scores. That's not exploitation, but simply risk adjustment. Not charging enough interest on high risk accounts (or lending to those high risk accounts at all, i.e. at any interest that was not a proxy of infinity) was one of the reasons leading to the sub-prime lending crisis a little over a decade ago . . . which was triggered by political pressure on banks to lend to sub-prime borrowers (without attaching sufficient risk premium)! Sounds familiar? The half-wit author writing that poorly written article based on a shoddy (possibly non-existent) "study" is potentially being used to cause another financial crisis. Any race element attached to such study is essentially making a claim that there is significant statistical difference in credit-worthiness between/among different races (in the statistical sense, not necessarily between two individuals), which shouldn't be any more surprising than observing that professional basketball players are not demographically identical to the general population (aka "White men can't jump").
30   porkchopXpress   2019 Apr 8, 9:14pm  

Rental properties shouldn't get any tax benefits. Month to month, renting should be more expensive than owning given the freedom to come and go.
31   Patrick   2019 Apr 8, 9:23pm  

Goran_K says
HeadSet says
I left about a month ago and I have not received a refund of his deposit.

In Virginia, and likely in CA, not returning the deposit or a item deduction list and the remainder of the deposit within 30 days means the landlord forfeits all claims to holding any of the deposit. At day 31, if you did not get the deposit/deduction list, it is just quick filing at the courthouse. The judge will award the tenant the full deposit plus and reasonable attorney's fees, end of discussion.


This.

You should definitely fight this in court.


Yes, this very thing happened to me when I moved out of a house we were renting from Mary Jo Borak, former mayor of Menlo Park. She simply did not return my security deposit or even give any explanation why.

I had her served with a summons (have to admit that was fun!) and when she came to court, the hearing lasted all of 20 seconds. Judge just asked, did you refund his security deposit or give some cause why it should not be returned? The answer was no, and bam, that was the end of the case.

Collecting even with the judgement proved hard again, and so I started looking into having the sheriff seize some of her property, but then realized, hey, she's the mayor of Menlo Park, so all I really need to do is call a reporter! I did, the reporter was interested, called her about it, and voila my security deposit was returned to me the next day.
32   anonymous   2019 Apr 9, 1:56am  

Patrick says
really need to do is call a reporter! I did, the reporter was interested, called her about it, and voila my security deposit was returned to me the next day.


Which is why I suggested to contact anyone with a consumer help line. Publicity is not the friend of the greedy or anyone else doing something shady
33   HeadSet   2019 Apr 9, 1:46pm  

porkchopexpress says
Rental properties shouldn't get any tax benefits. Month to month, renting should be more expensive than owning given the freedom to come and go.


Rental properties are a business, and should be treated as such. That includes maintenance costs, depreciation, and interest expense.

If you want to equalize between owning an renting, ten I suggest we do away with government backed loans and deductibility of consumer interest.

And if you wonder why interest should be treated differently for landlords and resident owners, it is the same as how private car loan interest should not be deductible, but a taxi company's on car loan interest to buy cabs should be deductible.
34   Booger   2019 Apr 9, 3:36pm  

Patrick says
Yes, this very thing happened to me when I moved out of a house we were renting from Mary Jo Borak, former mayor of Menlo Park. She simply did not return my security deposit or even give any explanation why.

I had her served with a summons (have to admit that was fun!) and when she came to court, the hearing lasted all of 20 seconds. Judge just asked, did you refund his security deposit or give some cause why it should not be returned? The answer was no, and bam, that was the end of the case.

Collecting even with the judgement proved hard again, and so I started looking into having the sheriff seize some of her property, but then realized, hey, she's the mayor of Menlo Park, so all I really need to do is call a reporter! I did, the reporter was interested, called her about it, and voila my security deposit was returned to me the next day.


https://www.reddit.com/r/ProRevenge/
35   Misc   2019 Apr 9, 4:26pm  

I'm just glad that poor people never skip out on rent and they always pay for damages to the property.
36   MisdemeanorRebel   2019 Apr 9, 6:30pm  

I remember back in the day when landlords were trying to justify laws that would get tenants to pay the property tax on rented property.

I think it might have been on Mish.
37   MisdemeanorRebel   2019 Apr 9, 6:31pm  

porkchopexpress says
Rental properties shouldn't get any tax benefits. Month to month, renting should be more expensive than owning given the freedom to come and go.


Rental Income should be subject to a flat 25% federal tax with no deductions.
38   Misc   2019 Apr 9, 7:25pm  

I'm sure our president would get right on that --- raising the taxes on landlords. Oooops, he accidentally lowered the tax rates on folks renting real estate during his tax push; him being a real estate guy and all. Well, maybe if we get enough democrats in office, they will raise taxes, but the outcome there may be iffy. Then maybe the only ones that would be able to afford the increased rents would be those getting monthly reparation checks and the subsidized illegals.
39   FortWayneAsNancyPelosiHaircut   2019 Apr 9, 8:27pm  

Misc says
I'm sure our president would get right on that --- raising the taxes on landlords. Oooops, he accidentally lowered the tax rates on folks renting real estate during his tax push; him being a real estate guy and all. Well, maybe if we get enough democrats in office, they will raise taxes, but the outcome there may be iffy. Then maybe the only ones that would be able to afford the increased rents would be those getting monthly reparation checks and the subsidized illegals.


he didn't lower taxes on landlords. for some landlords I know taxes gone up, because SALT caps.
40   Reality   2019 Apr 9, 8:49pm  

MisterLearnToCode says
I remember back in the day when landlords were trying to justify laws that would get tenants to pay the property tax on rented property.

I think it might have been on Mish.


Commercial leases are usually quoted on "triple-net" basis; i.e. the tenants are responsible for property taxes, utilities and insurance. For residential lease, triple-net would make it clear to the tenant what the property tax portion is (just like in retail sales of most goods), but most tenants may not be sophisticated enough to handle triple-net lease so for convenience sake residential lease has to be quoted in "gross" format just like gas station price has to be quoted as "including all taxes" due to people having little attention span gassing up their cars. Changing to triple-net for residential leases may well result in too many eviction cases clogging the courts.

Rental Income should be subject to a flat 25% federal tax with no deductions.


Not sure how that would work if taxes, maintenance, insurance and depreciation can not be deducted as business expenses. Property taxes constitute the overwhelming bulk of local government tax revenue, and mortgage interest payment is the backbone of many banks' revenue. Landlords serve a critical societal function keeping local governments and banks open while providing housing to people whose finances are not (yet) stable enough to sustain local governments and banks yet need a place to live (and another population who prefer flexibility). There have been many attempts at letting bureaucrats handle the cushioning function, but always led to slums worse than even the worst "slumlords" properties.

This phenomenon is actually quite indicative of the "education" disaster to human civilization: people making a living in the real world learn through first-hand experience that everyone has self-interest, and in order to find a solution to any complex problem, the self-interest of multiple parties have to be engaged and incentivized through some kind of multi-level delegation process (division of labor); "education" OTOH tends to give students an impression that centralized bureaucracy would lead to some kind of efficiency run by selfless bureaucrats (their teachers are always correct, as accepting that correctness is the price for their grades), the real life result of any such centralized bureaucratic solution is of course a monopoly worse than the worst "slumlords." As a society/civilization gets richer, more parents send their kids to schools in order to give them a leg up on other kids; the result is a population's misplaced faith in bureaucracy (which is inevitably extremely corrupt by the 2nd or 3rd generation). That is the real root cause of "socialism" (a top-down slavery system): over-emphasis on formal education.

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