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What happens when investment firms acquire trailer parks

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Re: What happens when investment firms acquire trailer parks

#131

Post by clairity »

simonh wrote: post #112
clairity wrote: post #72

Earlier quoted context omitted.

that's a false dichotomy. you can support freeing up urban real estate and retirees downsizing without assuming a house is an investment. for instance, if the economic system acted to stabilize home values neutrally rather than explicitly promoting increasing valuations (through interest rates, and other mechanisms), you could still have those positive dynamics without the negative externalities.

It’s not the economic system as such that drives up real estate prices, it’s us the people who want to live in a nicer house. We bid up the prices of real estate in competition with each other. It’s not some external sinister faceless policy monster, it’s the queues of people who line up to view properties for sale - us. I’m a Brit but we have this bad here at the moment. A house next to ours came on the market just…

there's certainly fashionability, ego, and projection in homebuying that drives up bids, which can raise home prices in a given neighborhood over time, but that's largely because supply is artificially limited by things like regulatory capture and demand is distorted by economic policy promoting price inflation. for instance, low interest rates mean that more house can be bought at a given monthly payment amount (everyone seems to assume more is better), which is the economic basis of that ratcheting you're describing.

Re: What happens when investment firms acquire trailer parks

#132

Post by refurb »

mike_d wrote: post #56
phkahler wrote: post #18

Housing can not be both affordable AND an investment. Interest rates need to rise, and soon.

Many countries have solved this problem by providing near zero interest loans to individuals purchasing a primary residence, while maintaining higher interest rates for investment properties and corporate purchases.

How does that solve the problem if there is enough primary residence demand to push up prices to unaffordable levels?

I mean, NZ is crazy unaffordable and foreigners can’t own real estate there from what I gather. It’s purely organic demand driving up prices.

Re: What happens when investment firms acquire trailer parks

#133

Post by omegaworks »

exolymph wrote: post #114
omegaworks wrote: post #95

Earlier quoted context omitted.

Delivering results for whom exactly? Look outside and you'll see homelessness rising and storefronts closing. The entire failed national pandemic response is due to the perverse incentives of our system. Five hundred thousand Americans (and counting) are dead because we couldn't close the economy for a couple months and pay people to stay home.

Far be it from me to argue that the United States is competently administered compared to, e.g., a successful firm. It's still a global superpower for a reason, and that reason is not "communism will totally work this time"

Of course you can't argue with the substance of my point. All it goes to show is how willing you are to write off half a million dead Americans for continued profits and power. Power to do what, exactly?

It's not just the communist countries like Vietnam and Cuba, even capitalist countries with newly minted leftist leadership like South Korea, have weathered this crisis with orders of magnitude less loss.

The systems for rending economic value from the value of human life are deeply entrenched here. Always have been[1]. That we can divorce the success of firms from the success of the people providing the value on the ground doing the work is a testament to it.

It doesn't make us awesome, it makes us abhorrent. The people that you claim "soar" are not randomly distributed, they are frequently born into favorable economic situations that allow them to develop the talents that make them super rich. In our lifetimes those islands of stability have degraded entirely in the service of ensuring the super rich can get even richer.

1. https://www.nytimes.com/interactive/2019/08/14/magazine/1619...

Re: What happens when investment firms acquire trailer parks

#134

Post by alacombe »

WrtCdEvrydy wrote: post #16
Shacklz wrote: post #14

The US are such a weird country... on one hand, Silicon valley et al, producing the coolest tech & the shiniest toys, and on the other hand... people who can only afford to live in trailer parks, even with a full time job. It never ceases to amaze & depress me simultaneously.

It's the same reason those same Silicon Valley companies hire security guard companies at $15/hr and have the security guards take the food to the dumpster, and lock it. That security guy probably could use that food more than the dumpster.

Why bother with $15/hr security guard when you can get replaceable temp workers to feed, pamper and wipe $150k white-knight social-justice "engineers".

Re: What happens when investment firms acquire trailer parks

#136

Post by throwaway0a5e »

klipt wrote: post #104
diggernet wrote: post #97

Earlier quoted context omitted.

Yes, it is confusing. My brother in law works in that industry, and explained the differences to me this way: Mobile home: Factory built before a certain date in the 1970's (which I've forgotten), with no particular quality standards in place. Manufactured home: The new name for mobile homes, indicating that they have been factory built to clearly defined standards. Considered depreciating personal property by insura…

All buildings depreciate though. It's only land that appreciates.

Buildings (and more often, industrial facilities) appreciate when regulatory changes eliminate the possibility of building more in the future.

Re: What happens when investment firms acquire trailer parks

#137

Post by throwaway0a5e »

quickthrowman wrote: post #7
kfarr wrote: post #4

I'm going to guess on the record before reading article: debt based financing of the sale, PE firm steadily increases rent and lowers investment into facilities, bankruptcy and evictions ensue

It’s the standard PE playbook, and you’re correct. In this case, they wait for the tenant to default on the ground rent, then seize the mobile home and resell/re-rent it. Repeat ad infinitum. The manufactured home itself depreciates in value like a car or RV, so even if you don’t get fucked by your landlord, you get fucked on depreciation. At least in an apartment you don’t pay for maintenance or depreciation!

> then seize the mobile home and resell/re-rent it. Repeat ad infinitum.

That's basically the Buy Here Pay Here(TM) car lot business model.

Re: What happens when investment firms acquire trailer parks

#138

Post by chadcmulligan »

CalRobert wrote: post #102
Afton wrote: post #39

Earlier quoted context omitted.

Is this really how you view it? Like, you think that people are plotting how to induce scarcity in the market so that they will work harder? That doesn't seem like a useful framing of the problem.

I think it's a a convenient accident more than an intentional outcome, but one that established homeowners and assetholders benefit from so it's encouraged. If nothing else, can you actually imagine a politician celebrating houses going down in price? Picture yourself walking up to a podium and announcing that the average 3 bed 2 bath in San Jose is now only $200,000, and what a fantastic achievement this is and how…

> If nothing else, can you actually imagine a politician celebrating houses going down in price

This is a big part of the problem imho - its a treadmill that you can't get off. With an ageing population that all own houses and getting generally more conservative, I can't see it changing any time soon. It strikes me as odd that everything is getting cheaper except houses - and you may say its land, but if thats the case apartments should be getting cheaper.

Re: What happens when investment firms acquire trailer parks

#139

Post by throwaway0a5e »

refurb wrote: post #132
mike_d wrote: post #56

Earlier quoted context omitted.

Many countries have solved this problem by providing near zero interest loans to individuals purchasing a primary residence, while maintaining higher interest rates for investment properties and corporate purchases.

How does that solve the problem if there is enough primary residence demand to push up prices to unaffordable levels? I mean, NZ is crazy unaffordable and foreigners can’t own real estate there from what I gather. It’s purely organic demand driving up prices.

>How does that solve the problem if there is enough primary residence demand to push up prices to unaffordable levels?

That mostly doesn't happen because sid countries don't generally have California style zoning (though their byzantine permitting and regulatory compliance processes are just as good as CA or NYC's when it comes to raising construction costs).

Re: What happens when investment firms acquire trailer parks

#140

Post by [deleted] »

lucasmullens wrote: post #70
1996 wrote: post #65

Earlier quoted context omitted.

So true. This is why the US is so much better than Asia. What worries me however is how there are more and more laws and regulation to not let people crash and burn - like forcing people to have health insurance. Stupid code for building houses - etc EDIT: and I'm not being sarcastic. I admire how by taking the correct decision to apparently sacrifice the poor, we have made the pie bigger for everyone including the p…

Wait, what? You're against building codes? A lack of building codes is in no way why the US has been successful. They prevent people from literally burning.

[deleted]
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