
“Evicted”, an ethnographic study of tenants in low-income housing (2016) - hamiltonians
http://www.theguardian.com/books/2016/apr/07/evicted-poverty-and-profit-in-the-american-city-matthew-desmond-review
======
ryandamm
Important frame to consider, here in the comments: we're all reacting to an
article that's reviewing a book. A long work of sociology.

So the article isn't the ground truth; it's a tiny digest, plus a reaction by
the article's author. The book itself is a project of research, which also
isn't ground truth. But they bring up provocative points that most people
haven't considered.

And in some cases, won't consider. If your mental model for how the economy
works somehow doesn't allow the situations described in the book or article,
I'd hazard to say it's your mental model that's in error.

~~~
rayiner
> If your mental model for how the economy works somehow doesn't allow the
> situations described in the book or article, I'd hazard to say it's your
> mental model that's in error.

What situations? People being evicted? People paying rent for trailers? What
economic insight are you supposed to take away from those things?

I would say that if your mental model of how _society_ works does not include
those things, yeah, it should. If everyone realized what was happening, maybe
there would be more support for basic income, Section 8 vouchers, etc. That's
my view--raise taxes and give more money to poor people so their lives are
better. But that's an entirely different point, and not one that the article
is making.

The article is an archetypal example of what I call "well intentioned but
economically ignorant liberalism." The folks who campaigned to make tenements
illegal were not conservatives. They were liberals genuinely concerned about
the living conditions of those residents. However, they were also ignorant
about how economics works. So they tried to address the problem simply by
making tenements illegal ( _i.e._ taking an option away from poor people).[1]
Calls to regulate check cashing places and payday lenders out of existence (or
articles that demonize landlords who rent to poor people, like this one) fall
into that same bucket.

Reading the article, what kind of solution do you think the article is leading
you to? Maybe making it harder for landlords to evict tenants, or limiting the
rents that trailer parks can charge tenants. What does that do? Cause
landlords to be less willing to rent to poor people, or less likely to invest
in a new trailer park. _I.e._ it takes options away from poor people, and
ironically _reduces competition and raises prices_ in the markets that cater
to poor people. Making _some_ poor people better off ( _e.g._ the ones that
get the trailer park before the rent controls kicked in), but making poor
people _as a whole_ worse off.

[1] [https://fee.org/articles/the-hidden-war-on-affordable-
housin...](https://fee.org/articles/the-hidden-war-on-affordable-housing/)

~~~
ryandamm
I don't think there's an easy answer. Therefore, we should not expect obvious
policy prescriptions from the article, book, research project.

(I do hear your objection about the title; I see HN's title is updated to be
less click-baity, and more reflective of the book's content.)

I think the point of the book is to try to understand the situation as lived
by poor people, and (if I recall the longer-form radio review correctly) the
role eviction specifically plays in the cycle of poverty.

To the extent there's a policy prescription here, it's to focus poverty-relief
efforts on housing security. To the extent there's an economic prescription
here, it's perhaps just the realization that the rental market, as it
currently exists, is playing a role in that cycle of poverty (leaving aside
exactly how "free" the market is in the first place).

Seeing the work in isolation, though, and looking for answers... I think that
misses the point. Personally, I see this as another insight into how expensive
it is to be poor: whether it's banking, housing, educational opportunities,
etc, the poor are dealing with a different set of challenges and tradeoffs
than I experience. (Hence, the utility of the book.)

------
enoch_r
The assertion implicit in the headline ("poverty exists because it's
profitable") is the article's assertion, not the book's.

This is quite silly. Through all of human history the vast majority of people
have been miserably poor, and it's only recently that a slice of humanity has
managed to claw their way out of poverty. Poverty should be considered the
natural state of humanity, not an anomaly that needs explanation.

~~~
ue_
But it's clear that the drive for profit is a contributor to poverty; arguably
a lot of it today exists because of the profit motive. Furthermore, many
people can't "claw their way out of poverty". I'm not really sure what point
you're trying to make here; the elimination of poverty is a goal that is to be
strived for, even if it cannot be reached.

~~~
enoch_r
I absolutely agree that we should strive for the elimination of poverty, and
that many people can't "claw their way out of poverty."

My point is just that we shouldn't start from the false premise that
_prosperity_ is the natural state and _poverty_ must be explained, because you
may end up blaming symptoms (in this case, landlords--in other cases, it's
check cashing companies[0], or sweatshops[1], or the "profit motive") and
implement a "treatment" that makes the poor even worse off.

[0] [http://www.businessinsider.com/check-cashing-stores-good-
dea...](http://www.businessinsider.com/check-cashing-stores-good-deal-upenn-
professor-2017-2)

[1]
[http://www.slate.com/articles/business/the_dismal_science/19...](http://www.slate.com/articles/business/the_dismal_science/1997/03/in_praise_of_cheap_labor.html)

------
habosa
Everybody here should read the book that this article is reviewing: Evicted by
Matthew Desmond. It's an incredible accomplishment in sociology and one of the
most insightful works on poverty I have ever encountered.

------
the_cat_kittles
haven't economists talked about how, in general, charging rent is not really
creating economic value? patent trolls, landlords, rich investors, for
example... all to some degree just rake it in based on what they already have.
of course there is some strategy involved, and there is work too. but maybe
the point is that the way things are set up now, the reward for the work goes
on indefinitely, which makes no sense. you inherited a family property and are
able to profit off it your entire life, since the cost of maintenance and
property taxes is offset by rent you earn from some agency renting out your
house? i dont see how you are personally contributing anything. some investors
already have vast sums of money, so they are able to earn vastly more sums by
putting it in an index fund? also not fair, though i suppose you are "taking a
risk", but i dont really find that all too compelling. you just sit there and
rake in dividends and ~3% roi. suing a company for using tech that they
invented but didnt patent? you are just a pure minus on society in that case.
these things are all rent-seeking behaviors, i dont see how they really do
anything for the greater good. i think we need to tell people who try to make
money by charging rent to basically fuck off. not that you are a bad guy for
doing it in many cases, but we should recognize it for the unfair practice it
is.

~~~
eof
The argument would be that the _right_ to seek rent from your capital goods,
whether created, bought, or inherited, is what drives people to create these
rent-creating systems in the first place.

If people didn't have the right to seek rent from the houses they build or
inventions they come up with, why would they expend the effort in the first
place?

(note, I don't take that view exactly, I believe motivation comes from a whole
lot of places)

~~~
the_cat_kittles
yes, its a good point to make. and not wrong, but i wouldn't say its the whole
story. people have been creative and ingenious long before money existed. i
certainly dont have enough historical knowledge, evidence, or thinking to make
a compelling argument that money doesn't inspire creativity, but i really do
have a suspicion that most good stuff comes from people who do it "just
because", not to get rich. look at the incredible academics, artists, writers
etc throughout history that weren't ever rich, nor really made the effort to
be. but, for lots of day to day stuff, i do think money keeps the gears
turning. so, i guess "why would they expend the effort in the first place?"
... because its fun.

------
m12k
To the vast majority of companies, poverty is not profitable (prison industry
and loan sharks being notable exceptions). In fact to most companies it is
critical to have an affluent market to sell things to. It's just not
profitable for them to be the ones ensuring that this affluent market exists
rather than let it be someone else's problem. It's a classic tragedy of the
commons.

~~~
cortesoft
Yeah, sadly, the reason things are often so expensive for poor people is
because it ISN'T profitable to service them. This means that there is little
competition for their business and things cost a lot.

For example, rent for poor people is way too high. So why don't other people
come in and offer to rent to them for less?

Well, poor people have trouble paying their rent a lot of the times. They have
a high chance of failing to pay, and that is costly to a landlord. So that
risk is priced into the rent.

What this ends up meaning, though, is that if you are poor but always pay your
rent on time, you are paying for all the people who fail to pay their rent.

~~~
dougmany
Interesting though on the supply side question. I remember reading some
comment here that basically said, People do not build low income housing, they
build high income housing that then gets old and becomes low income housing.
That means there is a several decade lag in housing supply for low income.

~~~
OrwellianChild
Not so, because of filtering... [1]

Adding new stock at the top makes existing stock more affordable. It's a
gradient - not a age-based scale.

[1] [http://cityobservatory.org/what-filtering-can-and-cant-
do/](http://cityobservatory.org/what-filtering-can-and-cant-do/)

------
MtotheThird
This is an excellent book, but as other comments have pointed out, the review
misrepresents its argument.

I wouldn't say Desmond is exactly sympathetic to the landlords he profiles,
but he does provide a well-rounded picture of them. The main thrust of his
analysis is that eviction is a major cause of an inescapable cycle of poverty,
and that preventing eviction would go further to reduce poverty and inequality
than nearly any other government policy.

IIRC his recommendations involve a huge bump in the federal housing voucher
program, decoupling it from work requirements (since it's difficult to get a
job without a permanent home), and tying federal aid to code reform in cities
(simplifying and loosening the housing code so that landlords would be less
likely to ignore it).

~~~
rayiner
Those are great policy prescriptions: reduce eviction by giving poor people
more money and more flexibility, as well as by making it cheaper and easier to
offer housing to poor people. You're right that the article misrepresents that
argument.

~~~
AstralStorm
How does it stop everyone from just squeezing more?

------
eagsalazar2
Man people in this thread are really biting hard on the extreme straw man
arguments. It is really pretty simple:

(Poverty is profitable for _some_ people) + (Doing anything about poverty is
_not_ profitable for most people) + (Poor people are disempowered) => poverty

~~~
tbrownaw
Sounds like it would depend heavily on what exactly the "some" and "most" are
and how extreme the disempowerment is, and on how many people do things for
reasons other than profit.

So no, not all that simple.

------
frgtpsswrdlame
_It is no crime to be ignorant of economics, which is, after all, a
specialized discipline and one that most people consider to be a 'dismal
science.' But it is totally irresponsible to have a loud and vociferous
opinion on economic subjects while remaining in this state of ignorance._
-Rothbard

I'm seeing all sorts of economic flailing in these comments. Is it okay to
make a reading recommendation? I think people who read them will have a better
understanding of how economics actually works in the real world.

Economism by James Kwak

Economic Ideas You Should Forget by Bruno Frey & David Iselin

~~~
ue_
I would also recommend _Wage Labour and Capital_ by Marx, and the classical
political economists like Smith and Ricardo. A good introduction to contending
schools of economics is _Contending Economic Theories: Neoclassical,
Keynesian, and Marxian_ by Wolff.

------
partycoder
This video by CGP Grey, based on the book "The Dictator's Handbook" is very
good at explaining why some countries are richer, even if they have plenty of
natural resources:
[https://www.youtube.com/watch?v=rStL7niR7gs](https://www.youtube.com/watch?v=rStL7niR7gs)

Another view:
[https://en.wikipedia.org/wiki/Resource_curse](https://en.wikipedia.org/wiki/Resource_curse)

------
rm_-rf_slash
On the other side of the equation (at least regarding real estate), it can be
difficult to make money from poor people without extremely low costs and
tremendous scale.

There is a reason many landlords refuse to accept Section 8 tenants. It's not
because they're evil Scrooges, it's that Section 8 tenants are more likely to
damage properties (I've heard firsthand accounts of Section 8 tenants letting
their multiple dogs piss and shit on the floor while refusing to pay several
months of back rent and utility bills, and others letting their units turn
into such trash heaps that delousing was a regular occurance) and vacuum up
administrative time. So the rent has to be high for the landlords to be able
to make a profit.

Maybe we could stop blaming the market for doing what it does and recognize
that the economy and the livelihood of people is largely determined by
government policy?

Bring back the Works Progress Administration. Pay people to show up and work.
I know it's unrelated to the article, but as long as private employers have
little competition for wages, poor people will continually be forced to accept
their place in a race to the bottom.

~~~
Masacore
I agree 100%

The article (I'm not sure about the book) painted landlords as evil for
evicting women "Think of that next time you ask a woman why she doesn't call
the police," but Crack doesn't come out of walls easily, holes punched in by
that abusive man aren't fixed for free, and cops making an arrest care even
less about your property than the tenants. There are insanely high cost to
renting to low-wage families and most landlords I know that attempted it
didn't last long doing so.

Are there some sad stories of people truly trying to improve their lives? Yes,
there absolutely are, but for every "Pursuit of Happyness" Oprah level story
of overcoming poverty there are 20 people who've absolutely given up and don't
give a crap about anything that's not physically attached to them. It's not
the business owner's responsibility to try and spur the human spirit of the
impoverished.

This article is painting just a skewed of a viewpoint as the one it's trying
to disprove, and I'm curious if the book is the same.

~~~
steven777400
To affirm your anecdote, I had a friend who bought a fourplex in a somewhat
depressed area, lived in one unit and rented the other three. It was an
unmitigated disaster and a terrible experience. I spent some time with him
trying to help out around the units and also discussed his experiences with
him. I concluded from that I would never, under any circumstances, want to be
a landlord.

------
Overtonwindow
I'm iffy on this book but I think there is a very interesting
point/perspective to be made on the profitability of housing. It's expensive,
and it's that way because of economics, mostly. People will charge what the
market will bear. I am renting out a house in Atlanta, and I've decided I
would rather have stable, good tenants, over profits. The apartment
communities I've lived in are the other way around: profits over tenants. Each
year apartment rates go up for most people. They never go down. Even if they
did go down, they wouldn't go down for the tenant, they would go down for a
new tenant. What we're seeing in places like California, Portland, Seattle,
and other dense, urban areas with limited housing, is that people are being
pushed out because of ever increasing rent prices. So yes, I do think that
housing is high because it's profitable, and I think something should be done
about that. Unfortunately I don't have an answer. I don't think it's "build
more" because that will just lead to more of the same.

------
pitaj
I don't buy it. Increased wealth at lower levels benefits everyone. The main
problem of poverty, at least in America, is that the welfare system traps poor
people in government dependency. Another massive issue, homelessness, is due
to terrible mental health treatment, which is especially sad.

~~~
lutorm
Totally disagree. Do you think pawn shops, payday lenders, and high-interest
credit card issuers would benefit if their customers became wealthy enough to
not need their services?

~~~
WillPostForFood
Payday lenders would probably (thankfully) go away, but other businesses could
benefit. Credit Card issuers will do well. Interest rates go down, but credit
limits can go up. A pawn shop makes money selling stuff, so if there was more
money in the neighborhood, they could sell more. They may need to acquire
products in new ways, and rebrand as an antique store, or general store.

~~~
ashark
Unless I've misunderstood all these years how pawn shops work, they _would
indeed_ have trouble operating under the same business model as average wealth
in their area increased. Resale shops and such would be fine, but the
difference is that they don't sell stuff they've acquired when people
defaulted on what amount to short-term secured loans.

~~~
WillPostForFood
Yes, they'd have to change their product acquisition methods, but at their
core they are basically used goods resellers, and that can work just as well
as a wealth increases.

~~~
ashark
Right, but then they're not a pawn shop. Payday loan places would do fine,
too, if they turned into traditional banks.

~~~
WillPostForFood
It's a much bigger step for a payday loan business to turn into a bank
(basically impossible due to regulatory barriers to becoming a bank), than for
a pawn shop to switch suppliers. Look at it this way, when people move out of
poverty, their need for payday loans goes down, but their ability to buy stuff
goes up, so a pawn shop has some potential to capture the increased purchases.

------
tomjen3
There are people who are looking at the world and seeing how they can make
money, but the more you make the more you can afford to pay, so in general
capitalist prefer people to be rich.

~~~
dragonwriter
> in general capitalist prefer people to be rich.

Capitalists prefer to be rich themselves (both absolutely and relative to
others in society), and they prefer labor to be cheap, which is served by
laborers being poor and insecure.

~~~
dllthomas
Rich customers, poor employees.

------
jacquesm
Not only that: poverty ensures a steady supply of cannon fodder for the
military. So there is a big %age in keeping people poor if you want to have a
large military.

~~~
ryanmarsh
That doesn't match recruitment data for the US Army. We have a volunteer
professional military with standards for recruitment that require above
average individuals.

There are still plenty of poor people in the Army, quite frankly I can't think
of anything better for poor people. Where else can you get housed and fed and
your college paid for? Only a small portion of the military is war fighters.
Most are doing boring relatively safe jobs like filling gas tanks and counting
bullets.

~~~
jacquesm
> We have a volunteer professional military with standards for recruitment
> that require above average individuals.

Those could easily be poor. Poor != dumb.

> There are still plenty of poor people in the Army, quite frankly I can't
> think of anything better for poor people.

How about a normal civilian life?

> Where else can you get housed and fed and your college paid for?

In countries with a functioning social contract this is not an issue.

> Only a small portion of the military is war fighters. Most are doing boring
> relatively safe jobs like filling gas tanks and counting bullets.

Right, but they're still part of the same machine and even if the %age that
ends up on the front lines is not 100% that holds true historically. So that's
not a counter argument, it's just a function of how the military is organized.

Note that 'volunteering' if it is your only option at a reasonably affluent
life is not really volunteering.

------
saint_fiasco
Compare and contrast: [http://www.businessinsider.com/check-cashing-stores-
good-dea...](http://www.businessinsider.com/check-cashing-stores-good-deal-
upenn-professor-2017-2)

------
rdiddly
Ain't no "what if" about it son. Every economic transaction between two
parties benefits the seller slightly more than the buyer; that is the
definition of profit. Sure, the buyer is getting whatever good or service they
paid for, but they are ordinarily paying slightly more than it's absolutely
worth.

If that element isn't present (i.e. if the transaction does not incrementally
impoverish the buyer and enrich the seller by some amount), the seller won't
continue to sell that good or service.

Edit: except non-profits, subsidies, and Uber

~~~
WalterBright
The buyer and seller both profit, or they would not engage in the trade. Each
has something the other needs more than they do.

~~~
rdiddly
I agree and I acknowledged this ("the buyer is getting whatever good or
service they paid for"). But I still tend to frame it as the buyer having
incurred a cost, not having profited. The seller is the one who ends up with
money in hand, that can be invested elsewhere. The buyer usually ends up with
something that either starts off with no resale value, or that depreciates, or
that (if you're poor) does nothing but keep you alive -- like a roof over your
head let's say.

Mind you, since that last category consists of things one really needs a lot,
it makes one that much more eager to engage in the trade and pay the stated
price. If you can afford to walk away from a negotiation, your position is a
lot stronger.

~~~
WalterBright
Consider the farmer and the blacksmith. The farmer makes more corn than he can
eat, and the blacksmith shoes the horses. The blacksmith trades shoeing the
farmer's horse for corn to eat.

They are both better off. There is no buyer/seller.

Money is just a medium for making trading more efficient. A "buyer" and
"seller" is an artificial construct, and framing things as the "seller" always
gets the upper hand has no real basis.

I buy things and sell things all the time. It's pretty clear that the seller
has no inherent advantage.

~~~
rdiddly
In barter there is no seller's advantage because yeah, there's no seller. In a
monetary transaction, there is, because one party ends up with money, which is
more than just a medium of exchange - it's capital. You can easily rent it out
and get back not only your money, but a bit extra. You could do that with
corn, too, but you would have to set up the arrangement yourself, whereas the
mechanisms already exist to do that with cash.

~~~
WalterBright
It is just a medium of exchange. It's all money is.

I doubt I'll convince you with rhetoric, so I suggest you try doing a little
selling. The experience should be pretty convincing that it doesn't give you
any advantage.

~~~
rdiddly
Well this is funny. Believe it or not, my attempts to sell something nobody
wanted are actually the very thing that made me think the way I do. I had
something I couldn't find a buyer for -- something specific with only as much
value as any buyer would care to assign. But my potential customers had
something everybody wants including me -- a medium of exchange as you say,
that can be easily converted into anything else. Selling is harder than buying
because what you're asking for (people's money) is more flexible and reliably
worth something to a greater number of people. If you find a market, a bunch
of people who want what you've got, more than they want money, you've scored a
coup!

------
gaius
Right, this is the same as the welfare trap. Keep the poor reliant on state
largesse and count on their votes. Its still exploitation.

------
draw_down
Hmm, indeed, "what if".

------
andrenth
Poverty is certainly profitable for politicians.

------
brianzelip
Of course poverty is profitable.

------
rayiner
Because providing goods and services to poor people is evil!

> Tobin Charney makes $400,000 a year out of his 131 trailers, some of which
> are little better than hovels.

That monster! Charging about $3,000 a year in rent per trailer! Of course his
actual return is lower than that, because he has to pay for the mortgage and
taxes on the underlying property, as well as upkeep. Say say more like
$200,000. But still! Earning about as much as a programmer managing a business
that houses over a hundred people. Monster is the right word for sure.

~~~
yannyu
That's a pretty poor way of expressing the idea of the article.

The point the article is making is that poor people often have their backs
against the wall as far as the number of choices they have in food, housing,
jobs, location, etc. They're effectively a captive audience, which makes them
an easy population to exploit. Maybe this is considered acceptable in
society's economic model, but at the least people should be more aware of how
your options fall away as you go further down the socio-economic ladder.

~~~
koolba
> Maybe this is considered acceptable in society's economic model, but at the
> least people should be more aware of how your options fall away as you go
> further down the socio-economic ladder.

What rational person would expect your options to improve as you drop down the
economic ladder? Less money, mo problems.

The only situation I've seen where that's remotely true is applying for
student aid where if you're parents saved money they're expected to pony it
up, but if they spent it all on flat screen TVs and new cars (and hence are
"cash poor") they're not expected to do so.

~~~
zdean
"The only situation I've seen where that's remotely true is applying for
student aid where if you're parents saved money they're expected to pony it
up, but if they spent it all on flat screen TVs and new cars (and hence are
"cash poor") they're not expected to do so."

Are you suggesting that everyone falls into this (false?) binary?

~~~
ams6110
I do. I saved for my kid's education, and I didn't bother even applying for
aid, because (a) I don't need it, (b) I wouldn't get any, and (c) it's not
anyone else's responsibility to send my kid to college.

~~~
zdean
I applaud you for having the foresight to save up for your kids' education. At
the same time, I think it's naive to say that the only reason people are cash
poor (or even the primary reason) is because they buy flat screen TVs and new
cars.

------
ryanobjc
Competition is more than just another store offering the same goods and
services at the same prices.

I'm flabbergasted at these comments. You are as out of touch as a republican
supreme court justice. Willfully out of touch even.

~~~
dang
Personal attacks are not allowed here. We ban accounts that do that and it
looks like you've done it before, so please don't do it any more.

Re downthread: Whether or not comment quality on HN has "massively declined"
(such perceptions tend to be in the eye of the beholder), please don't make it
decline more massively still. "One more for the pile" is the credo of a
litterer.

We detached this subthread from
[https://news.ycombinator.com/item?id=13924820](https://news.ycombinator.com/item?id=13924820)
and marked it off-topic.

------
anarchochossid
“Crystal and Trisha are fragile young black women whose upbringing was violent
and chaotic; Lamar is a genial black father of two who lost both his legs to
frostbite when he passed out on crack in an abandoned house; Scott is a white
male nurse who lost his licence when he stole opioids from his patients;
Larraine, also white, is a slightly brain-damaged sweet soul.”

clearly examples of poverty caused by rich-people oppression

