
Suburbs That Haven't Recovered from the Recession - DiabloD3
https://www.theatlantic.com/business/archive/2017/12/suburban-poverty-and-recession/549350/?single_page=true
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tabeth
There's a lot to digest in this article:

1) Absentee landlords are terrible. I can't say I know what the solution is,
but perhaps simply lowering the price of the houses until the (low income)
workers could afford to _buy_ and therefore take stake in the community is
preferable?

2) Unfortunately the sprawling layout of Hemet in particular is unconducive
for creating the kinds of businesses that could at least mark the beginning of
a more dense mixed use area. In this case there will have to be pain to raze
some of the houses at the very least to help things go in that direction.

3) Broken window effect seems to be in full force with the absentee landlords
only throwing fuel to the fire. Ideally the city would help some of these
residents sue these landlords to resolve some of these issues, which would
help slow the downward spiral of non-maintenance by the residents.

~~~
EADGBE
As a landlord (I don't like that name, it kinda has a negative connotation) I
can see first-hand in dealing with new potential properties the lack of care
most landlords have towards their investments. They approach it as an entirely
passive income without ponying up the relatively small amount for someone to
_actually maintain_ it (Since they're too old or bothered to do it
themselves).

I think a major windfall could be had with better regulations and rights
renters could have protecting them from abusive landlords.

The rental regulations in my city are laughable and I have to deal with it
almost every time we look at a potential property when I "assess" how much
care has been put into its structure, mechanical, appliances, etc. That's even
assuming the previous owner permitted the property for such use.

~~~
real_estate
Personal anecdote:

I know of a retired magistrate judge that acquired over 30 residential
properties via tax-delinquency sales.

These properties, not in the best condition, were used as Section 8 HUD
housing, with no improvements made.

Tactics included keeping the utilities in the landlord's name to be able to
shut-off water, electric, or gas at a moment's notice.

Many of the tenants were former defendants with the magistrate court that the
judge oversaw.

Additionally, barter was used in lieu of security deposits and partial rent
payments - the tenant could fix-up the property.

However, the tenants lacked any ability to properly repair anything, and the
repairs caused further damage to the properties.

The wife of the landlord, insisted he divest himself of these properties
before his death, so she would not have to continue to deal with this.

However, he did die, she inherited the properties, and is too old to have the
energy to deal with this.

As you said, "too old or bothered to do it themselves".

Some of these properties now sit unoccupied, but cannot pass inspection
because of the substandard repairs, and further disintegrate.

I know of one particular property that was not winterized (unoccupied), and I
am certain the pipes have frozen and cracked.

At this point, the property should be razed (roof issues, structural issues,
mildew, pests), but that costs money too.

~~~
gnarcoregrizz
Some more incoming personal anecdotes from California

I briefly rented a small single family home from an 85 yo woman (managed by
her son who lived a few towns away). We quickly found out there was black mold
everywhere from a bad leak in the garage and a small one in the kitchen, and
that she smoked her whole life in the place. She had no interest in keeping it
up, she just "wanted to rent it out." Her son had no interest in dealing with
it either as he readily admitted to us. I don't think he had seen the place in
a long, long time considering the state of the damage.

We ended up recouping our costs and moving after a few days. She bought it for
$150k 20 years ago, pays $600/year in property taxes so there's no incentive
for her to give it up (prop 13). It's valued at $500k and was renting for
$2500/mo.

Our new place is owned by chinese investors, and also has issues which they
aren't interested in fixing. They haven't responded to a single email (I think
they are in their early 20s, live in china, and i'm not entirely sure they
speak english), we also tried to go thru the property manager who said he
won't fix stuff since the landlords are unresponsive. We gave both of them 30
days notice that we need about $500 worth of things fixed. We never heard
back, so we did the repairs and just deducted it from the rent, as you're
legally allowed to do... come to thing of it, I could propbably not pay rent
and squat the place and I'm sure they couldn't give less of a shit.

~~~
jjav
Property tax in California is at least 1% (typically a bit higher due to
various local fees, but let's say 1% for this example).

That means if she bought the property 20 years ago for $150K, the property tax
in year one was 1% of 150K, or $1500.

Under Prop 13 property taxes go up 2% ever year (compounded). So after 20
years that property tax would be up to roughly $2400.

~~~
gnarcoregrizz
The assessed value is $61k, the estimated value (according to zillow) is
$480k. Property taxes in 2016 were $640. There is a law where 55+ can transfer
valuations if they move within counties that participate.
[https://www.ocgov.com/gov/assessor/programs/55plus#2179](https://www.ocgov.com/gov/assessor/programs/55plus#2179)

------
killjoywashere
Shouldn't cities grow and fade though? If whatever attracted people is lost,
it should shrink. The problem is it's really hard to shrink concrete. In
Louisiana after Katrina, the main solution was bulldozers. Think of them as
the macrophages of the urban immune system.

~~~
Bartweiss
> _The problem is it 's really hard to shrink concrete._

A better summary in one line than most essays on the topic.

We've put together a system that's unstable in the face of even modest
shrinkage - and in some cases a mere failure to grow. The result is that even
non-crisis change, like people moving to take better jobs, creates crisis
results in shrinking cities.

In the short term, promoting growth is probably an inescapable part of the
solution. But if we keep up the pattern of debt-financing expansion by
planning for growth, we're never going to do better than deferring the crisis.

Long term, we need to build financially-stable cities and work out actual
strategies for managed decline. 'Shrinking' and 'failing' are equivalent
today, but that pattern needs to be broken if we're going to get out of crisis
mode.

~~~
ghaff
For that matter it's hard to grow concrete above a certain rate both for
physical and political reasons. It's one of the problems causing the housing
crunch in certain cities. Yes, in each case, there are specific issues. But,
generally, when everyone and their dog suddenly wants to move into certain
areas of certain cities that were actually declining in population not all
that long ago, you're going to have issues.

------
at-fates-hands
I went looking for a house about four years ago. That was in 2013, a full 5
years post recession. I was surprised to see how many foreclosures were still
on the market. I asked my realtor to show me, despite his misgivings about
possibly buying a foreclosed property.

It was pretty much exactly how the article described it. I looked at about
five or six lower priced large houses (5-6 bedrooms, 4-5 bathrooms, in the
4-5k ft range) and all were the same. They were all totally run down. Gutters
falling off, carpets destroyed, holes in walls, kitchens in total disrepair.
All kinds of stuff were left behind like there was a fire and the owners just
fled.

My realtor also pointed out a few of the houses where the workmanship of the
house was way below where it should be. The houses were built quickly for the
boom. Corners were cut and it was clear even after five years, the houses
would need a ton of work.

One other thing the article didn't touch on was the huge availability of
retail and commercial space. There's a bunch of suburbs around where I live
where businesses went under during the recession and nothing has filled those
buildings yet. Retail is the same thing. There are businesses that either
moved out or closed shops and those spaces remain empty, almost ten years
after the recession.

~~~
maxerickson
I would describe 4000 square feet as enormous.

2000 square feet is plenty of upkeep if you aren't paying someone to do it.

~~~
at-fates-hands
It was and I was surprised at how far the costs of houses in that range had
come down. I guess the balance of the cost of work needed, essentially then
pushed them back into the proper range. As you noted, the upkeep would've
killed me.

I ended up with a 2500 sq ft mid century modern that was in rock solid
condition that I got for a steal. I haven't had to do anything substantial in
the last five years. Some things will be due in the next three years (windows
and HVAC) but otherwise, it's been easy to maintain.

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jpm_sd
It seems like there's a market opportunity to create a property management
company that operates on a Wal-Mart or McDonalds scale. Franchises all over
the country, consistent architectural design for apartments, consistent
management and maintenance. I'm surprised something like this doesn't exist
already.

~~~
astura
Correct me if I'm wrong but isn't this basically what REITs do minus the
franchising? (Walmart doesn't franchise either)

There's also large privately own property management/real estate companies, I
lived in a complex owned by one for 4 years. They own and operate properties
in 25 states.

~~~
ABCLAW
REITs don't necessarily run the building management or development sides of
the business. Normally these functions are bid out to developers and property
management companies.

------
lmm
People who want to live in the cities are moving to the cities, and so house
prices in those suburbs are dropping and people who can't afford houses in the
city are moving to places where they can afford houses. Both of those seem
like good things. Of course if you look only at the suburb then it looks like
a decline.

A country that has built enough housing for its population _should_ have empty
houses, should have houses that are not worth keeping up slowly falling into
disrepair, available on the cheap to anyone who decides they do want them.
Build more houses where people want to live - the cities. Let them rot where
people don't.

------
southphillyman
"This dynamic changes the housing markets of these cities, too, with big
cities getting more expensive as more high-wage workers migrate there, and
low-wage workers leaving cities to seek more affordable housing in the far-
away suburbs they can afford. Now that the dust of the recession has cleared,
it is evident that the geography of poverty has changed in America."

There was just an article posted here a couple of weeks ago about a woman who
was pushed out of LA and moved to Hemet while continuing to commute to LA for
work. IIRC the woman was in her 50s and still renting in Hemet despite the
lower housing costs. There are no jobs in cities like Hemet but you'd expect
that a significant enough number of LA expats moving there would revitalize
the local economy some what, just from the higher earnings of super commuters.

~~~
s73ver_
For that to happen, those people would have to be spending money in Hemet, and
not just at the grocery store or the gas station. They'd have to be dining out
in restaurants in Hemet (local ones, preferably, not just fast food chains),
going to bars in Hemet, buying things in little shops in Hemet, etc. As it
stands, a lot of these people are probably still commuting to LA, not just for
work, but for their leisure as well.

------
randiantech
Decentralization of bigger cities is one of the key things where govern should
take action in the foreseeable future. I live in Buenos Aires, Argentina,
which receives 2 million workers every day. Govern should pass laws to
incentivize companies to move out of the city, banks to give credits on
underdeveloped areas, and heavily invest of public transportation to those
areas. We are reaching a level bigger cities are not capable to scale any
longer.

~~~
ocschwar
Visit Atlanta, Georgia, or Charlotte, North Carolina, or Phoenix, Arizona
before wishing that on your own city.

We made that particular mistake already. You don't need to repeat it.

~~~
frandroid
Can you expand on this? Are large businesses spread across the land in these
areas?

~~~
jzymbaluk
In addition to what others have said, it's common that the suburbs of
sprawling American cities are unwalkable, and completely impossible to live in
without access to a car.

I grew up in a Suburb in Colorado where the only buildings for miles were
other houses. It was impossible to walk to the grocery store or any other
amenity. It's extremely isolating, and a hostile and depressing living
experience in my experience

~~~
astura
Yes. In a previous life I lived in an area that's mostly a spread out suburb.
I got so depressed that I couldn't _walk_ anywhere, I mean, absolutely
nowhere. I felt pretty housebound during the summer and yet I felt at the same
time there wasn't really any place to go. Jumping in the car every time I
needed to leave the house was just not relaxing!

Now I live in a small town and boy do I love it! Since it's a small town
there's not really any huge roads and very little traffic. The streets beyond
the major thru fares are quiet and the neighbors are friendly. If I'm bored
and feeling restless I can walk to the park (half mile, maybe), the local
watering hole (2 blocks), the coffee shop (1 block), or even the convenience
store (about a quarter mile). I mean, just getting up and taking a short walk
to the convenience store seems to be really beneficial to my mental health for
some reason, yet driving there does the opposite.

------
mbrumlow
Haven't recovered... What if it is should have not been?

Many things were built and new subdivisions were creates with the notion the
economy was ready for it.

It clearly was all built on lies and bad practice.

That is why I question not that it is recovering but maybe it should have not
been.

I think the real solution is to leave these areas that clearly can't be
supported by the local economy.

And sorry to say. Yeah it's going to suck for a lot of people. But that is
life. Not everything is going to be perfect. Holding on to a dying dream is
only going to make it worse.

(I am not cold hearted. I have just experience life enough to not let a sob
story make me make irrational decisions).

~~~
criddell
If you don't like suburbs, you're really going to hate what self driving cars
bring. Get ready for sprawl like you've never seen it before.

I, for one, plan on moving further out of the city as soon as my car can drive
itself. The dream isn't dying. It hasn't even started yet.

~~~
organsnyder
I could see it going either way. I actually have become more likely to use
transit since ride-hailing is so much easier—if I'm ever stranded anywhere
(lack of good bus route, after hours, etc.), I just have to open the Lyft app.

Furthermore, when car ownership is no longer considered a necessity (as it is
today in most of the US), the economics will change. Right now, my personal
vehicle is a sunk cost, so I view car trips as costing close to zero—unlike
the up-front, immediate transactions inherent to taking the bus or Lyft. Once
I no longer own that vehicle (I'm not planning to replace it), all of my
options will be on more equal footing, since they'll all be priced per-trip.
Even self-driving vehicles will not be able to compete with mass transit when
they're both priced similarly.

~~~
Retric
Exactly, owning a car in a city can easily cost 25+$/day. That buys a lot of
public transportation.

~~~
criddell
Self driving cars will eventually be much, much less expensive to own and
operate than cards of today. That's assuming there isn't a massive per-mile
tax imposed.

I would also guess public transportation will evolve as well. I could see
small and medium sized cities getting rid of buses, fixed schedules, and fixed
routes and instead deploy a fleet of van-sized vehicles to pick up people on
demand. I could see this as being something that gets outsourced to Uber and
Lyft. Maybe it will be less expensive and better to just subsidize rides from
private companies.

~~~
Retric
Mechanically, self driving cars are not going to be cheaper to build or
maintain, and they will need just as much fuel if not significantly more to go
park somewhere distant. You also need 2 parking spaces @ 100+$/month (one at
home, one at the office) and pay to park other places. Insurance might get
slightly cheaper, but I don't see the economics changing much and the added
electronics are not going to be free.

~~~
criddell
Electronics will do what they always do - get cheaper and better.

The cars (eventually) will not be like current cars. If they don't crash, they
don't need as many safety features. They can be made much lighter and from
cheaper materials. When the car is way lighter, it can use a smaller, simpler
drivetrain. They will likely be electric. Maintenance on electric cars is far
less than gasoline or diesel vehicles. Your robot car will likely be serviced
by another robot.

Don't think of a Lexus with an instrument package bolted to the roof, think
about adding a few hundred dollars of sensors and actuators on a fancy golf
cart. I wouldn't be surprised if self driving cars are eventually available
for less than $10,000. I think the low cost of the vehicles combined with the
low cost of operating them will result in an explosion of ownership, not a
reduction. I think when the cost of the vehicle drops and the cost of a trip
drops, more vehicles will be sold and more trips will be made.

~~~
Retric
A self driving golf cart is not a self driving car. Until we outlaw humans
from driving anything self driving cars will need all their current safety
tech. That might happen in 100+ years, but it may also never happen because
hitting something due to mechanical / software failure is always going to be
possible.

PS: Adding a camera may get cheaper over time, that does not mean it's ever
cheaper than not having one in the first place.

~~~
criddell
100 years? I was thinking more like 50.

Mechanical and software failures will always be possible. However, we already
accept a really high rate of death and injury when both could be eliminated. I
don't think that will change with self-driving cars.

Adding a camera is cheaper when it results in being able to eliminate hundreds
of pounds of metal and airbags. We don't make bus riders wear a seatbelt
because it just doesn't solve a huge problem. When the injury rate of car
passengers gets to a similar level, we probably don't need seatbelts there
either.

~~~
Retric
We have zero production self driving cars today or in the next 3 years and
will not be on 90% of new cars for at least a decade after they show up.
Hyundai for example is targeting 2030 for urban driving _as an option_.

Cars last for ~25 years in normal use (average car in US is 11.5 years old and
accidents take many out before reaching their lifespan). So, at a minimum we
are talking 50 years before essentially every car is even capable of being
self driven. Laws are unlikely to change before self driving goes from a
novelty to assumed behavior call it another 25 years at a minimum. Now, add a
few more years for phasing in the law, and then a few more for statistics to
validate reducing safty equipment.

So, 100+ seems fairly optimistic as that's the happy path assuming zero major
issues show up.

------
thriftwy
There is this thing I was thinking about:

Single homes ought to be owned, and multi-tenant apartment buildings ought to
be rented.

Why? One case you are observing in the article. Renters of home don't care
about keeping up their house. Spending any kind of money on it is just not
their priority. The only one who can keep up the house is owner, but as you
can see in this case they'll just choose to pocket the rent.

But there's a different angle. Imagine an apartment building where every
apartment is owned. Some of them by elderly, some of them by poor. Now the
common areas and house territory would deteriorate, because apartment owners
don't have incentive to spend on either one. You could try to roll these
charges into their utilities bill, but they will fight tooth and nail. Poor
will say "we don't have money for this", elderly will say "we don't care and
also don't have money", the rest will say "we're not paying for the
aforementioned if they're not".

This is becoming a problem in countries where owned apartments are a thing.
The city has to pay from its pocket for the upkeep of territories around such
apartment blocks.

Naturally when apartments are rented out, landlord is interested in its state
because they have to maintain steady number of new tenants to replace people
moving out. Bad upkeep = no more tenants = lost money.

~~~
scaryclam
In the UK, it's normal for apartment buildings where people buy the apartments
to have what's called ground rent. This is an additional charge that is
specifically for the upkeep of the buildings shared areas and grounds. I don't
know if perhaps that's missing in other places, but it seems to work ok here.

~~~
alistairSH
In the US, owner-occupied flats are called condominiums. And ground rent
exists as "condo fees".

In my area, condo fees are often high enough to make buying a condo a strange
proposition - you really must want to live in a multi-unit building because
mortgage+fees > mortgage for a detached dwelling.

~~~
logfromblammo
Some places have the worst of both worlds in the form of HOA dues. You pay
yearly for the upkeep of common areas that are so far away from your front
door that you never even see them unless you make a special effort.

~~~
alistairSH
Oh yeah, I know all about those! I live in Reston, VA, one of the early
planned communities. I live in small townhome development, with it's own
"cluster" dues (paid quarterly), then I have the Reston Association fees (paid
annually), special district real estate taxes, and county real estate taxes.
Quadruple whammy of taxes/fees! And four levels of incompetence to deal with!

