Just finished this book, a fascinating (and troubling) non-fiction account of the status of low-income housing in Milwaukee. Has anybody hear read it?
As someone who is in their first RE role (SBL underwriting), it was incredibly relevant in terms of product type and my role in general. Here is a NYT review of the book- I would be very interested in hearing from some of you regarding this seemingly broken system.
It is a very thought provoking book. There is a great discussion through the USC Bedrosian Center book club podcast https://bedrosian.usc.edu/bookclub/evicted/
Thanks for posting- this was great!
Not a fan of slumlords in general (who is?) but I didn't know of this book until now. Thanks for the recommendation - I just bought it on Amazon. The review was very unsettling.
To specify, I'm not simply asking who's a fan of them, just more interested in the system itself and/or whether there's a solution to eradicate landlords who are purely exploitative. In the podcast that @USC just posted, they discuss how the housing voucher system doesn't work, as it makes rents increase in a supply-constrained market. Are there other options that could benefit the less fortunate while also intriguing a savvy RE investor?
I mean, things were worse in the 1890's, we had tenement buildings were a family of 10 would live in a sub 400sqft apartment.
Agreed, but that is not really a great baseline.
Just ordered this as well.
hey...I obviously didn't mean that was a good status quo. But I think the author at some point posits that things today are the worst they have ever been.
That review was definitely hard to read. I have no doubt that slumlords exploit the poor. There is a special place in Hell for them, that's for sure. With that said, trying to fix the situation through legislative means would probably exacerbate the issue of housing scarcity--I can think of a half dozen "reforms" that might be logically proposed and how they would be counterproductive.
The issue of housing affordability has no short-term, easy solutions. I detest the "easy solutions" of the affordable housing crowd (I cut my teeth in the AH industry). In my area in the D.C. suburbs, politicians placate their consciences by funding AH funds, mandating or incentivizing inclusionary zoning, or otherwise encouraging LIHTC developments. The problem is, this construction hardly scratches the surface of demand. The only real way to achieve AH long-term is to build in excess of demand and to wait for new Class A buildings to become old Class B buildings. In addition, we need structural reform to achieve 3-4% GDP growth each and every year in order to provide for more economic opportunities.
"More building" and "more economic growth" are not sexy solutions to achieving affordable housing. Most advocates desperately want easy legislative solutions that include regulation and throwing money at the situation.
Part of the problem too is that "affordable" is a truly meaningless term when it comes to housing and that there are drastic income and lifestyle differences between "the poor" as well. A solution for one subgroup would not work for the other, and vice versa.
Go look at what section 8 renters do to an apartment and you'll realize why slumlords exist. This meme that impoverished people being subjected to slumlords evil capitalistic greed is a myth.
Don't like it, leave. Or look for government housing. Why would these property owners invest in their buildings only to let renters absolutely destroy the property.
I've seen section 8 renters who kept their place like a palace. I've seen section 8 renters that absolutely trash it. I've seen LITCH developers create solid projects that help the impoverished. I've seen LITCH developers create modern day slums.
As usual in life, it's not so black and white.
You can also find plenty of anecdotal evidence of Class A apartment renters absolutely destroying units, ruining plumbing systems, and causing havoc to the rest of the building's tenants.
Bullet proof logic. Class A renters are obviously more of a risk, with their verified income, credit scores, assets to sue, security deposits, etc.
I saw a pet alligator once. They all must be nice and cute.
Gonna pick this up, really interesting read I'm sure. Not sure about other around the country but in DC I've seen how poor the HCVP can cause major issues. Improper enforcement of basic building codes and one set rent, almost encourages some of these slumlords to do as little as possible. Pile on a red hot market, brokers that convince everyone evicting/buying-out the market rate tenants and bringing in vouchers will get higher rents and you now have the slumlords getting paid 3-10x what they paid for an asset 10 years ago. Further, the amount of deferred maintenance makes it extremely difficult and cost prohibitive for a new owner to come in and make major upgrades.
Just wanted to add https://www.nytimes.com/2017/05/23/magazine/jared-kushners-other-real-e…</a">this article to the thread as well. Same topic, except involves Jared Kushner...
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