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Detroit gentrifiers face daunting task buying $500 homes evicting poor residents

theguardian.com

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Re: Detroit gentrifiers face daunting task buying $500 homes evicting poor residents

#51

Post by krakensden »

jordanb wrote: post #42
themartorana wrote: post #40

Earlier quoted context omitted.

Edit: rant ahead, not aimed directly at bluedino I will never understand this. I agree life-time pensions are unsustainable. I argue constantly for a) all new public employees being enrolled in a 401k and pensions being phased out and b) offering younger workers buy-outs, allowing them to invest their contributions themselves in reward for opting out of the pension system. But that said - every pensioner out there wo…

Why is a pension "unsustainable" and what's the difference between a pension and a 401k that makes the latter "sustainable"?

401ks put the burden of investing wisely- and tightening your belt during recessions- on the pensioner and not the employer. This is bad in many ways, but, they are at least immune from the problem of crooked and moronic administrators investing in rare coins (http://en.wikipedia.org/wiki/Coingate_scandal) and sticking taxpayers with the fallout forever. It would be funnier if it wasn't so regular an occurrence.

Re: Detroit gentrifiers face daunting task buying $500 homes evicting poor residents

#52

Post by sitharus »

thrownaway2424 wrote: post #45
themartorana wrote: post #40

Earlier quoted context omitted.

Edit: rant ahead, not aimed directly at bluedino I will never understand this. I agree life-time pensions are unsustainable. I argue constantly for a) all new public employees being enrolled in a 401k and pensions being phased out and b) offering younger workers buy-outs, allowing them to invest their contributions themselves in reward for opting out of the pension system. But that said - every pensioner out there wo…

The question is whether the pensioner provided enough benefit during their career to justify their pension. In a lot of cities the retirement benefits are completely out of proportion to the benefit provided by the government employee. The social contract works both ways. We're supposed to provide for the security of old people in retirement, but they were also supposed to leave a better future for young people. If t…

The problem with that is these people planned for what was promised to them.

As a younger person in a skilled occupation, like most HNers I expect, I have no expectation on the state to provide for me and consequently have my own provisions for retirement savings. I've been placing a percentage of my income aside for a while now to fund me later in life.

My grandparent's generation (in the UK) however were promised state pensions. They paid higher taxes than I currently do for this, secure in the knowledge that when they retired the state would cover them. They don't have any retirement savings.

You can't just pull out the cover for these people, because they have no backup. They were told they'd be covered and they planned for that.

Re: Detroit gentrifiers face daunting task buying $500 homes evicting poor residents

#53

Post by justin_vanw »

xpaulbettsx wrote: post #2

If there was anything worth starting a KickStarter for, it would be to raise money to buy as many of these homes as possible, and give the deeds outright to the people who already live there. That'd be a really great thing.

Why would that be in any way good? If someone can't manage to pull together $500 to buy the house they already live in, they also can't pull together $500 to fix anything that breaks in the house. Giving these houses to the people living in them is EXACTLY the same as encouraging people to live in houses that we know are not going to be maintained, and have them evicted in a few years, leaving the city with the cost of condemning and tearing down the house.

Re: Detroit gentrifiers face daunting task buying $500 homes evicting poor residents

#54

Post by tedunangst »

corysama wrote: post #16
icebraining wrote: post #4

Earlier quoted context omitted.

Why? These houses are getting foreclosured due to owed taxes. If they got the deed back, they'd just get foreclosured again to pay the rest, no?

I agree that throwing money into tax auctions every three years is a band-aid. However, there is certainly an 8-figure opportunity here for whoever can come up with a more permanent solution. Perhaps instead of paying $500 each to boot out poor grandmas to the streets, some low-income apartments could be built for those grandmas based on the expected values of flipping their houses and a govt tax break promise.

The upside for a flipped home in Detroit is about zero. There's a reason these homes are (barely) selling for $500. And buying a home for that and booting granny is a lot cheaper than building granny a new apartment. Not sure where the eight figure upside is going to come from.

Re: Detroit gentrifiers face daunting task buying $500 homes evicting poor residents

#55

Post by cyphunk »

Are you kidding me? Why isn't this a thing:

    He had made a previous purchase in the yearly tax foreclosure auction. 
    His coup turned less appealing as he was confronted with the reality of
    removing the owner and then-occupant from her home. Goldenberg sold the
    house back to its occupant for the bargain price of $7,000 – twice what
    he had paid for it, but half what she had owed in property taxes.
Meaning why isn't there a protection agency or service that buys houses from these foreclosure auctions and sells them back to their owners at a bargain???

Re: Detroit gentrifiers face daunting task buying $500 homes evicting poor residents

#56

Post by gred »

jordanb wrote: post #42
themartorana wrote: post #40

Earlier quoted context omitted.

Edit: rant ahead, not aimed directly at bluedino I will never understand this. I agree life-time pensions are unsustainable. I argue constantly for a) all new public employees being enrolled in a 401k and pensions being phased out and b) offering younger workers buy-outs, allowing them to invest their contributions themselves in reward for opting out of the pension system. But that said - every pensioner out there wo…

Why is a pension "unsustainable" and what's the difference between a pension and a 401k that makes the latter "sustainable"?

People often criticize "defined benefit plans" like pensions, where the employee is guaranteed a certain pension payment by the employer. This guarantee means that the employer, rather than the the employee, takes on most of the market risk. Employees (via e.g. unions) often push for pension guarantees that are likely to exceed realistic market returns, further increasing risk to the employer (as has happened in many municipalities in the US). Politicians who are here today, gone in 20 years, are sometimes incentivized to provide expanded pension guarantees (to make employees happy today) without adjusting funding (to keep taxpayers happy today).

Defined contribution plans like 401(k)s, which have become much more popular in the past 20 or 30 years, move the risk to the employee -- nobody is guaranteeing anything, and your fortunes move with the market. Obviously there are downsides, but one of the big upsides is that it keeps everyone honest by forcing employers to fund plans today as needed (e.g. 401(k) matching is not a hypothetical cost to be faced in 20 years, it's something that must be paid out today).

http://en.wikipedia.org/wiki/Defined_benefit_pension_plan

http://en.wikipedia.org/wiki/Defined_contribution_plan

Re: Detroit gentrifiers face daunting task buying $500 homes evicting poor residents

#57

Post by gajomi »

cyphunk wrote: post #55

Are you kidding me? Why isn't this a thing: He had made a previous purchase in the yearly tax foreclosure auction. His coup turned less appealing as he was confronted with the reality of removing the owner and then-occupant from her home. Goldenberg sold the house back to its occupant for the bargain price of $7,000 – twice what he had paid for it, but half what she had owed in property taxes. Meaning why isn't there…

I agree. This seems like a no brainer. Barring any legal barriers that might arise in the implementation of such a scheme, it seems like the main bottlenecks would be

(1) verifying that the current occupant was indeed the original title holder (2) transferring the purchased title to said previous occupant without incurring substantial fees

From a the technology standpoint it seems to me like everything else could be fairly standard CRUD. There might be a bipartite graph between lenders and the foreclosed upon, simplified by averaging the resources of the former across all nodes.

Can anyone keen on the Detroit scene pipe in on the legal aspects?

Re: Detroit gentrifiers face daunting task buying $500 homes evicting poor residents

#58

Post by jordanb »

gred wrote: post #56
jordanb wrote: post #42

Earlier quoted context omitted.

Why is a pension "unsustainable" and what's the difference between a pension and a 401k that makes the latter "sustainable"?

People often criticize "defined benefit plans" like pensions, where the employee is guaranteed a certain pension payment by the employer. This guarantee means that the employer, rather than the the employee, takes on most of the market risk. Employees (via e.g. unions) often push for pension guarantees that are likely to exceed realistic market returns, further increasing risk to the employer (as has happened in many…

This is a good definition of "pension" and "401k" but it doesn't explain why the former is unsustainable and the latter is sustainable.

Why is it sustainable to shift all the risk of bad investment, mismanagement and unexpected longevity away from institutions and onto individual workers?

Are workers in a better position to shoulder those risks than institutions are? Or are they in a better position to minimize the risks? Do they have better access to the investment market or greater ability to choose good and trustworthy managers? Are they in a better position to pool longevity risks?

Re: Detroit gentrifiers face daunting task buying $500 homes evicting poor residents

#59

Post by pfisch »

fidotron wrote: post #47
pfisch wrote: post #44

Earlier quoted context omitted.

I agree with you but I would like to point out that the US was basically founded on the idea of getting out of a bad contract instead of paying the money we owed. It has been spun in a lot of other ways because yay america, but really we didn't want to pay England back for financing the French and Indian War and for ongoing stationing of troops because of that conflict. So we didn't and that was that.

Not really. Had the colonists had better representation in parliament then the case for separation would have been non-existent, but as it stood even Burke, who famously opposed the French Revolution, thought they had a point.

Most of the English population didn't even have representation in parliament.

Its very convenient how this wasn't an issue until America owed England a huge amount of money. What about all previous import/export taxes up until the revolution?

Re: Detroit gentrifiers face daunting task buying $500 homes evicting poor residents

#60

Post by rayiner »

themartorana wrote: post #40
bluedino wrote: post #36

Earlier quoted context omitted.

Not to mention the insane amounts that municipalities are paying towards the massive pensions and benefits for retired workers. How many existing police officers are cut in order to pay the pensions of the previously retired?

Edit: rant ahead, not aimed directly at bluedino I will never understand this. I agree life-time pensions are unsustainable. I argue constantly for a) all new public employees being enrolled in a 401k and pensions being phased out and b) offering younger workers buy-outs, allowing them to invest their contributions themselves in reward for opting out of the pension system. But that said - every pensioner out there wo…

Contracts aren't inviolate. When you contract with an entity to receive money in the future, you always take on the risk that the entity will discharge the obligation in bankruptcy. And people who have unsecured obligations, like pensioners, would normally be low on the totem pole in bankruptcy.

Ultimately, there's an inter-generational conflict. Voter participation at the state and municipal level is low, and its not inaccurate to say that the pensioners voted themselves these unsustainable benefits, and also voted not to put money away to fund them. Why should our generation come along and pick up the difference?

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