
American Trailer Parks: The owners are getting rich - striking
http://www.theguardian.com/lifeandstyle/2015/may/03/owning-trailer-parks-mobile-home-university-investment
======
startupfounder
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.

~~~
klipt
"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.

~~~
chrissnell
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.

~~~
kedean
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.

~~~
girvo
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 :)

~~~
kedean
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).

~~~
girvo
_> 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 :)

------
methodover
I'm so torn on this.

So, if I understand this correctly, this is how to get rich off renting to
poor people: (1) Buy out a property where a bunch of poor people live, (2)
Jack the rent up, (3) Justify it with superficial renovations.

It works because (1) the cost of moving is so high, and (2) all the other
property owners are doing the same thing -- In fact, that's probably why
they're doing this "university" to begin with.

On the one hand, this looks totally immoral. Poor people are forced to move
out, or become even more impoverished, as a result of what you're doing. And
it seems like the renovations are really just superficial -- they're designed
to make people think "Oh, well they're doing renovations, so the property is
worth more." Rather than a genuine, good-faith attempt at improving the
properties in a way that the poor tenants can afford.

But on the other hand, this is capitalism. Oftentimes in capitalism, things
look really, really bad. But from a macro point of view, things work out
better in the long run. Could there be some kind of better long-term effect
that I just can't see?

And yet, criticisms aside, I don't know if any municipality in the country has
figured out a good solution from the regulation side of things. In fact, I'm
skeptical if regulation can solve this problem. It feels like greedy slumlords
are just going to be greedy slumlords no matter what rules we put into place.
Maybe the real solution is to just, like, persuade greedy slumlords to think
of tenants as real, living, breathing human beings instead of cattle.

~~~
dsr_
I have an answer.

Buy the trailer park. Sell it to the tenants. Their rent payments become
mortgage payments, in effect. When they finish buying the property en masse,
it becomes controlled by a tenant-run cooperative.

This is, obviously, a money-losing proposition for whoever buys the trailer
park in the first place. That's why it should probably be a government entity.

If the trailer park residents can do it by themselves -- and in several
locations, they have -- that's great. But it would be preferable to have self-
owned communities over slums, even if you have to have the government provide
the initial loan and organization.

Is it socialism? Sure. The good kind.

~~~
minthd
There's proof that this solution works :

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.

~~~
ari_
Living in a maabara is considered good housing? Have you been in a rakevet
building recently?

~~~
minthd
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.

------
dsfyu404ed
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.

~~~
robotresearcher
I grew up poor and in subsidized housing. There are real negatives to living
in and around these places, not just snobbery.

------
PythonicAlpha
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.

------
EliRivers
_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).

~~~
sliverstorm
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?”_

------
cpr
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!

------
ari_
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.

------
ufmace
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?

~~~
paintrayne
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.

------
crdoconnor
[https://en.wikipedia.org/wiki/Land_value_tax](https://en.wikipedia.org/wiki/Land_value_tax)

^^ 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.

~~~
Spooky23
What's the difference between this and property tax? Commercial property rates
are generally determined by rents.

~~~
crdoconnor
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.

------
Someone
_" 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?

~~~
klank
The author of the article got their numbers mixed up.

ELS only has ~370 communities. The 140,000 is accurate but is the number of
individual sites/lots which that ~370 communities represent.

------
binarray2000
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.

~~~
smoyer
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.

~~~
binarray2000
Upvoted. Yes. And I agree: As long someone is producing value she is
contributing to the society.

------
ZanyProgrammer
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.

------
lotharbot
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.

~~~
cldellow
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.

[32804]: [http://www.orlandoweekly.com/orlando/the-scarlet-
letter/Cont...](http://www.orlandoweekly.com/orlando/the-scarlet-
letter/Content?oid=2256113)

------
joering2
Mandatory read about an old nice and innocent man with an ice-cream cone...

[http://www.publicintegrity.org/2015/04/03/17024/warren-
buffe...](http://www.publicintegrity.org/2015/04/03/17024/warren-buffetts-
mobile-home-empire-preys-poor)

------
littletimmy
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.

~~~
sampo
> _We do NOT need this free market._

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.

------
danbruc
Getting even richer by taking from the poorest. Disgusting.

~~~
pinky1417
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.

~~~
danbruc
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.

~~~
strathmeyer
Yes dan that is how money works. You'd rather the poor have no place to live??

~~~
justincormack
These people are not building anything, there are the same amount of houses
before and after they buy them.

------
kqr2
In Palo Alto, the last trailer park is being closed:

[https://news.ycombinator.com/item?id=9586401](https://news.ycombinator.com/item?id=9586401)

------
mixmastamyk
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.

------
dschiptsov
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?)

------
knowaveragejoe
So what's the surprise here? The economics of a trailer park are lucrative for
landlords?

~~~
intopieces
"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.

------
mkempe
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%.

------
anti-shill
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.

~~~
stegosaurus
Same deal in the UK.

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.

~~~
marincounty
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.)

Good night people!

~~~
ownagefool
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.

