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Poor Neighborhoods Make the Best Investments

strongtowns.org

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Re: Poor Neighborhoods Make the Best Investments

#111

Post by mjmahone »

baron816 wrote: post #97

Many economists argue for taxing every equal sized plot of land the same (vs. taxing based on assessed value). There are a lot of benefits to doing it this way, but the main one is that it encourages efficient land use. If a 40 story high rise with 200 apartments in it is taxed the same way as a lot with 6 ranch style homes, then you're going to incentivize building up.

If you're thinking of land value taxes (Henry George style taxes, considered highly efficient), it's not taxing every property that's the same size the same exact amount. It's taxing each property based on its raw (unimproved) value. So an acre near a subway would be worth more than an acre that's further away, and would be taxed more, even if it was just an empty plot while the further away lot had a high rise on it.

Re: Poor Neighborhoods Make the Best Investments

#112

Post by paulsutter »

yabatopia wrote: post #108
GreenPlastic wrote: post #107

Earlier quoted context omitted.

I knew a real estate investor who was really successful who's motto was the best investments are those in the worst areas that most people wouldn't touch. Large trailer parks with high vacancy rates, run down neighborhoods, etc. We don't live in Detroit but bought 3 properties for 40k each with about 18-20% yields. The renters aren't the best (they're paying 800 in rent because they can't afford an 8k downpayment), b…

Agree. However, I wasn't talking about 40k homes here, but about $1,000 homes in risky neighborhoods, with the obligation to renovate to code, potentially costing ten thousands of dollars in the process. There's a reason why the value op the property, including home and land, cratered to $500 or a few thousand dollars. It's the state of the neighborhood that dictates the value and it can change rapidly, faster than i…

You're explaining exactly why the properties may be a good value. Most people reflexively assume they're a dangerous investment and never take a close look.

When I suggest real estate investing of any kind, I usually hear a wall of objections about risks, and a lack of interest in how to counter those risks. It's part of the reason I like it.

(Not that I'd invest in Detroit, I don't have a rationale for it. Some people do)

Re: Poor Neighborhoods Make the Best Investments

#113

Post by OrwellianChild »

twblalock wrote: post #93

Be aware of unintended consequences of improving neighborhoods. If poor people can't afford to live in nice neighborhoods, and we transform their surroundings into nice neighborhoods, they won't be able to afford to stay. Richer people will move in and drive up the prices. These effects are likely to be amplified in towns with high demand for housing and low supply.

I think a lot can be learned from inverting the spin of the advice you are proposing... What you are saying is: "Leave neighborhoods unpleasant so only poor people want to live in them."

Looking at it this way gets at the heart of the problem with this way of thinking. Can I suggest a counter point?

Solve the systemic issues that prevent low-income people from seeking good housing, rather than advocating to keep them in their place.

Re: Poor Neighborhoods Make the Best Investments

#114

Post by jmknoll »

walterbell wrote: post #17
Anechoic wrote: post #6

Earlier quoted context omitted.

I really gotta move out of California... It's not a California thing. As part of my job, I spend a lot of time presenting at public meetings and in my spare time I do a fair amount of advocacy (for various causes) which also results in a lot of time in public meetings. I've been in public meetings in small rural villages and large cities across 30 states. And I've observed the same thing - the folks that attend those…

We need to follow the example of Ancient Greece, where citizens got paid time off work to attend the Ecclesia, https://en.wikipedia.org/wiki/Ecclesia_(ancient_Athens) > It had the final say on legislation and the right to call magistrates to account after their year of office. In the 5th century BC its members numbered about 43,000 people. It would have been difficult, however, for non-wealthy people outside of the u…

It doesn't even need to be an all-or-nothing thing. You could have a state law saying something like "All employees are allowed to attend one public policy meeting during working hours each month." Its not a huge expense for business owners, as I assume these meetings don't run more than an hour or two, and while it doesn't allow people to attend every single planning meeting, they can get to the ones which are most likely to affect them.

Or alternatively, just run all the meetings on Saturdays and Sundays. Government is a public service, after all, and could do a bit better at operating to meet the needs of the people.

Re: Poor Neighborhoods Make the Best Investments

#115

Post by YokoZar »

iopq wrote: post #94

The reason why poor neighborhoods are profitable is because the city doesn't spend money on them. If the city spent money on them, they'd be less profitable. There's no reason to expect that the city spending more money on a neighborhood increases any tax returns.

These are property tax returns. Property tax returns come from property prices. Making a neighborhood nicer raises property values, and thus prices.

The article is making the observation that it's much easier and cheaper to improve bad neighborhoods than rich ones. Painting crosswalks and planting trees is cheap, but rich neighborhoods already have those things.

Re: Poor Neighborhoods Make the Best Investments

#116

Post by rconti »

cderwin wrote: post #90
bryanlarsen wrote: post #60

Earlier quoted context omitted.

Technically it's on a Tuesday because back in 1845 people needed a travel day to get to the ballot box and another day to travel back, and you can't travel on the Christian Sabbath, so that only leaves Tuesday - Friday as options. https://www.bustle.com/articles/192414-why-do-we-vote-on-tue... Why is it still on a Tuesday? I think your reason is spot on.

Perhaps, but isn't it just as reasonable that they didn't want to change it? Presumably changing the date would actually censor the vote, with it being nearly impossible to get word of the date change to the entire electorate.

I don't think anyone just randomly shows up at the voting booth on the (guessing here) 1st Tuesday of the month in election years. I suspect virtually everyone knows about the exact date due to various forms of publicity. Especially when you consider the many different dates for many different kinds of elections.

That said, EVERY interest group is going to favor or disfavor any particular new solution due to perceived advantages of drawbacks to their cause, preventing any progress whatsoever.

Re: Poor Neighborhoods Make the Best Investments

#117

Post by abecedarius »

emodendroket wrote: post #102
dragonwriter wrote: post #86

Earlier quoted context omitted.

> After all, the United States was a crazy experiment to revive 2,000-year-old Greek idea called 'Democracy'. Not really. Representative democracy as the substantive form of government was an established tradition in Britain and it's North American colonies long before the US (a prime motivation for the revolution was perceived increasing deviation from that norm by the central government in respect to the administra…

> Insofar as the US (under the Constitution, at least) was an experiment in government, it wasn't in revive a dormant concept of "democracy", but in vigorously and fairly explicitly adopting the novel tripartite separation of powers model of Montesquieu. But that model is basically based on the English government with Parliament and a king in place of Congress and a president, isn't it? There was definitely a lot of…

Not that strange if you've read Plato. I read in Hannah Arendt that 'democracy' may have been a pejorative used by antidemocrats like him; actual early democrats talked about isonomy and isegoria: more or less what we call equality under the law and free speech. https://en.wikipedia.org/wiki/Isonomia

I'm not a classical scholar, but I get the impression that later times preferentially transmitted the less democratic points of view. I.F. Stone also wrote about this in The Trial of Socrates.

Re: Poor Neighborhoods Make the Best Investments

#118

Post by bsder »

PaulHoule wrote: post #39
RangerScience wrote: post #31

> These places are built all at once to a finished state. Today is peak wealth; it's all downhill from here, regardless of how much public investment is made. This . I've struggled to phrase why most developments seem so terrible, or sterile, or what-have-you, while the areas that developed over time seem so much more... Alive? Valued? This is an amazing way to phrase that difference - it's possible to invest yoursel…

Go to the poor neighborhoods and look closely and you often find that they built a bunch of row houses that are maybe two to four stories high. Some of them got knocked down, some of them are still there but they've been altered or decorated. When the trees get taller the monotonous aspects are less visible. Some of them are now vacant lots or rebuilt houses, stores, parking lots, etc. When they went to see Levittown…

Yet Levittown was absolutely excoriated when it was being built as being the exact same kind of sterility we complain about today.

In addition, today is even worse because now we have Homeowners Associations which prevent any evolution because it might affect the price of someone's house in a downward direction.

Re: Poor Neighborhoods Make the Best Investments

#119

Post by anon363764 »

OMG, apples and oranges terrible analogy. The best monetary returns investment in the real world is typically accomplished rehabbing the worst home in the best area because of the undeniable market power of comparables... the nice, expensive homes will boost the value of a now more attractive-seeming home by carefully-chosen upgrades which deliver maximum ROI, i.e., looks (good front landscaping), wow features and/or adding area/rooms; not sinking cash into pricy, low ROI money pit/white elephant work or hoping a nicer-seeming home in a bad area will magically not be depressed by terrible comparables.

Re: Poor Neighborhoods Make the Best Investments

#120

Post by mobilefriendly »

jmknoll wrote: post #114
walterbell wrote: post #17

Earlier quoted context omitted.

We need to follow the example of Ancient Greece, where citizens got paid time off work to attend the Ecclesia, https://en.wikipedia.org/wiki/Ecclesia_(ancient_Athens) > It had the final say on legislation and the right to call magistrates to account after their year of office. In the 5th century BC its members numbered about 43,000 people. It would have been difficult, however, for non-wealthy people outside of the u…

It doesn't even need to be an all-or-nothing thing. You could have a state law saying something like "All employees are allowed to attend one public policy meeting during working hours each month." Its not a huge expense for business owners, as I assume these meetings don't run more than an hour or two, and while it doesn't allow people to attend every single planning meeting, they can get to the ones which are most…

Such a state law would be unconstitutional, for violating rights to assembly/speech and for forced service. The government can't take your time (freedom) or force people to attend meetings without due process.
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