Investor · Atlanta, GA · Member since 2017 · 184 posts · 204 votes
This question is one I pose to anyone who has an opinion on the topic.
Obviously we're all here because we like something about the idea of REI and passive income. As the process goes, we find a "good deal" in some area, maybe make an improvement or 2 to the "deal", and if all goes well, we sit back watch the fruits of our labor grow through rental income, increased property value or equity. Now, multiply this by 100... 100 of us have found 100 deals, made 100 improvements, and raised 100 property values.
Boom. We just gentrified an area. A community that used to live there can no longer afford to be where they've grown up because there were a lot of good "deals" for investors to take advantage of and help our families and bolster our investment portfolio.
Granted, we may not have intentionally displaced a community, but collectively, we do. We just saw an opportunity and took advantage.
The question(s) I pose:
Do you think gentrification is an issue?
Do any of you ever struggle with the reality that we collectively price people out of their communities?
Do you ever think of it that way?
Do you ever feel bad about contributing to the gentrification of communities?
What are the alternatives?
This is just a philosophy question and some things that I think of, not pointing fingers or trying to be accusatory, or maybe I am. Just wanting to get a conversation started!
Rental Property Investor · Fort Collins, CO · Member since 2015 · 158 posts · 327 votes
7y
"Gentrification" is not wrong.
A neighborhood is either desirable or expensive or undesirable and inexpensive. It can move in either direction for a variety of reasons.
Maybe a community loses its industry and there are no more jobs, so prices go down, but it's still a bad place to live because there are no jobs and no future. Maybe hot new industries come to town and the opposite happens.
Maybe crime goes up, and people who can afford to leave move away. Maybe crime goes down, and people who used to avoid the neighborhood start moving in.
The list goes on and on.
Suppose we have a low-cost area that is in reasonable commuting distance from high-paying jobs. Why is it low-cost if it's so well-located? The obvious answers include crime and dilapidation. There are two ways things can go from here: The conditions improve and the prices go up, or the conditions stay lousy and the prices stay low. The "anti-gentrification" crowd tells you that price increases are immoral, but are they really ok with crime-ridden slums? Of course not. They promote magical thinking - the idea that we can get rid of crime and fix up the buildings without increasing the prices, even though the only reason that the prices were low was the conditions!
All of this without even mentioning that everyone who OWNs in a "gentrifying" neighborhood wins the appreciation lottery.
Shorter commutes are more green. It's better for society as a whole if the people working the high-paying jobs live near them. People doing little to no work don't have any particular reason to prefer one area to another, nor should we pander to them. The idea that you are more entitled to live in a particular area if you "started out there" has terrible implications and quickly becomes oppressive.
Finally, of course, the elephant in the room is identity politics. Most ant-gentrification rhetoric usually stems from toxic identity politics. People who get very angry when Identity Group A is displaced by Identity Group B don't care one whit when the opposite happens somewhere else. At best, such people are consistent in supporting the displacement of "richer" people by "poorer" people, or at least those they imagine to be so, while opposing the displacement of "poorer" by "richer." But adding emotional rhetoric doesn't change the facts above.
There is no good reason to keep crime in place, to keep dilapidation un-remedied, or to maintain filthy hovels when better alternatives are available.
@Jonathan Anderson Can you please explain how your "privilege as a straight, white, male" has any implication on your ability to see "effects it has on the communities being displaced because of the rising home/rent prices."? I am not sure how your sexuality, gender and color of skin have anything to do with your ability to "see" and/or understand effects "on the communities being displaced...". Unless of course you are saying that the only communities being displaced are gay, minority and female. Which would mean you are making assumptions and that would be stupid. That said... nice virtue signaling!
Insane.... how does being a straight white male interfere with your ability to see that if you can’t afford something then you don’t get to have it...? It’s a very simple concept but for some reason society feels the need to interject.
You completely miss the point of what I'm saying. And I can tell by the way you're responding to this thread that we have wildly different outlooks on life. So we'll have to agree to disagree. Best of luck.
Flipper / Landlord · Tyler, TX · Member since 2016 · 255 posts · 126 votes
7y
@Jonathan Anderson LoL they getting on to you for saying you are privileged because you are a straight while male. LMAO how is that privileged? I don't think BP is a place for you to be using political context so absurd like that.
@Jonathan Anderson LoL they getting on to you for saying you are privileged because you are a straight while male. LMAO how is that privileged? I don't think BP is a place for you to be using political context so absurd like that.
It's literally about as privileged as a human being could be. Not sure what's political or absurd about that. It was and is relevant to the point I was making in my post.
Flipper / Landlord · Tyler, TX · Member since 2016 · 255 posts · 126 votes
7y
@Jonathan Anderson I'm straight up mexican or chicano whatever you want to call it but i find it crazy to call yourselves privileged just because you're white. I'm sure most of BP would agree. We each create or build our own wealth, i'm not about that life were i'd be blaming others for my misfortune. That is where this "white privelage" came from in these last few years, others blaming and pointing fingers for THEIR misfortunes.
@Jonathan Anderson I'm straight up mexican or chicano whatever you want to call it but i find it crazy to call yourselves privileged just because you're white. I'm sure most of BP would agree. We each create or build our own wealth, i'm not about that life were i'd be blaming others for my misfortune. That is where this "white privelage" came from in these last few years, others blaming and pointing fingers for THEIR misfortunes.
I fundamentally and wholeheartedly disagree. I do not subscribe to the "pull yourself by the bootstraps" mentality. Best of luck with all that you do.
Investor · Willow Spring, NC · Member since 2009 · 5k+ posts · 3k+ votes
7y
I've always wondered how you tell if an LLC is white, black, or Mexican. Membership can be white, black, or Mexican and members can hire property managers so that tenants won't ever interface with the 'owners', whatever color they are.
A few more serious questions I have: 'does gentrification always involve race? If not, ethnicity? Can white neighborhoods gentrify? Does the citizenry makeup change from area to area?' I ask these in all seriousness because I have spent, literally, zero dollars investing in gentrifying areas. I do know what they are, but until very recently haven't ever considered this property category for me and/or partners. And, yes, I'll start a new topic if that is more appropriate....
If you choose to fix up a neighborhood that is ugly and unsafe and falling apart there will be some people that complain that you are pricing people out that live in that area.
If you choose to avoid those kinds of neighborhoods and invest in more upscale communities some people will complain that you are being a snob and that you don't care about the people in need who have an unsafe and ugly and falling apart community and that you should be helping them.
You have to do what's best for you because you can never please the easily offended.
Rental Property Investor · Memphis, TN · Member since 2013 · 61 posts · 21 votes
7y
Great topic! I am not going to rant for paragraphs on end, but I do believe gentrification is an issue. However, simply stated, it helps revitalize neighborhoods that would probably become slums and attract crime.
@Jonathan Anderson I'm straight up mexican or chicano whatever you want to call it but i find it crazy to call yourselves privileged just because you're white. I'm sure most of BP would agree. We each create or build our own wealth, i'm not about that life were i'd be blaming others for my misfortune. That is where this "white privelage" came from in these last few years, others blaming and pointing fingers for THEIR misfortunes.
I fundamentally and wholeheartedly disagree. I do not subscribe to the "pull yourself by the bootstraps" mentality. Best of luck with all that you do.
Investor · San Francisco, CA · Member since 2016 · 338 posts · 444 votes
7y
@Evan Parker, Now that I've read all the responses up to this point, I'm starting to wonder what all the folks here think about NIMBY-ism, which really happens at the far end of gentrification (the flip side of the coin). This is what we are dealing with in many parts of CA right now. Eventually, when enough gentrifying happens, many mid-level to expensive neighborhoods/regions could actually serve a better use to alleviate the housing crisis. From an investment perspective it would be equal or even more lucrative to redevelop the wealthy areas. In a way, that could point to another inequity, where communities are perfectly willing and able to gentrify the poorer neighborhoods, but they happily restrict developing where NIMBYs have power.
Anyway, as @Chris Martin said, this is probably a question for another thread, but I couldn't help thinking it.
This question is one I pose to anyone who has an opinion on the topic.
Obviously we're all here because we like something about the idea of REI and passive income. As the process goes, we find a "good deal" in some area, maybe make an improvement or 2 to the "deal", and if all goes well, we sit back watch the fruits of our labor grow through rental income, increased property value or equity. Now, multiply this by 100... 100 of us have found 100 deals, made 100 improvements, and raised 100 property values.
Boom. We just gentrified an area. A community that used to live there can no longer afford to be where they've grown up because there were a lot of good "deals" for investors to take advantage of and help our families and bolster our investment portfolio.
Granted, we may not have intentionally displaced a community, but collectively, we do. We just saw an opportunity and took advantage.
The question(s) I pose:
Do you think gentrification is an issue?
Do any of you ever struggle with the reality that we collectively price people out of their communities?
Do you ever think of it that way?
Do you ever feel bad about contributing to the gentrification of communities?
What are the alternatives?
This is just a philosophy question and some things that I think of, not pointing fingers or trying to be accusatory, or maybe I am. Just wanting to get a conversation started!
Your comment: "Granted, we may not have intentionally displaced a community"
Years ago, When I was buying in Seattle, the people in the Central District (poor area, now gentrified) were sure happy to sell their neglected properties for enough to buy a new house in Skyway, Renton and Tukwila. It was so popular that whole extended families sold their places and moved next to each other.
I don't buy the premise that it's anything other than the free market at work. It improved the neighborhood and it improved the lives of the people who moved and who could now live in houses that didn't leak, in safer neighborhoods.
If the market works without bias, why does redlining still have an affect? What's being ignored, is causation.
The onion is there to be peeled, but it gets worse as we get to the core and we'd rather peel the surface, dealing with much simpler perceptions that are rooted in subjecting some to mantras of laziness and criminal habituality.
I grew up in the 'hood. Not my dad nor none of my many brothers finished high school. But, I chose a different path. I think I know better than anyone on this thread the realities of people's thought habits and laziness and criminality. We are the total sum of our choices, hard work and perseverance or lack thereof.
I believe there are 2 sides of this and both are right. What I have experienced is gentrification is an overall good thing for a neighborhood. Who wants old, dilapidated buildings around? What crowd does that attract? No business wants to be in that area. But as the area gentrifies, more business is attracted to the area. More businesses to the area equals more income for the county in taxes. Cost of living rises but also taxes which means the county can allot more social services for the area, if they are hopefully competent. More mental health services and school services. Which by the way seem to be the first programs to be stripped to bare bones when the county has less money. When the schools have more funding and programs, people want their kids to go to said school. Kids go to school with great teachers and programs, can flourish in whatever they have an interest in and become productive adults. Mental health services help vulnerable adults with stability-Meds, counseling, even places to live.
My point is that you can’t have good support and a safe community with no money coming into the county, which is greatly helped by businesses in the area. Which is why Whole Foods coming in to a community would be a good thing, along with the jobs and healthier food they have for the community as well as local taxes they pay.
But if gentrification happens too quickly, prices go up too fast and while that’s good for investors, it’s hard for the more vulnerable populations in the community. For example, I knew an older lady in her 70s who lived in a small apartment complex for the last 25 yrs that got a 60 day notice since the apartment complex was sold to an investor who was going to completely remodel it. Even though she got 60 days notice, she still couldn’t find an apartment in the area that was first floor and wheelchair accessible. She was put on a wait list that was approx 4 months long for an opening and in the meantime, she was living on couches and sometimes in her old car before she got into a different place. Her health suffered terribly while she was waiting for another place to open up because even the local homeless shelters were not set up well for disabled people. It’s a hard life to be poor. She lived only on SSD. Seems that problems just compounds on problems, mostly due to poor planning. I believe this is more a government problem, as they need to provide better programs or more incentives for non profits and investors to help seniors and disabled (mentally or physically) with housing.
Another perspective. About 5 or 6 years ago, the large apartment complex I lived in (before I bought my home) got bought out by investors who raised the rent by like, $300 per month as they renovated units. You know what happened over the next 6 months? A total revolt! People started moving out in the middle of the night, and others bought small homes 30 minutes away since the mortgage was cheaper than the rent! I had a good relationship with the property manager and she was telling me that their vacancy rate was getting way too high since people were leaving and no one was moving in. Then the new owners added move in incentives, dropped credit score requirements and lowered the rent to attract more people. So really, the rental market will change based on the demand.
In summary, Gentrification helps more than it hurts, but for those it hurts (low income seniors and disabled), it can be a pretty terrible experience....I think that’s why so many people have an issue with it.
The only thing consistent in life is change. I agree stagnation is by far worse!
Rental Property Investor · Asheville, NC · Member since 2017 · 44 posts · 49 votes
7y
@Evan Parker let’s take a look at your proposal in reverse... is there something morally correct about watching homes deteriorate and neighborhoods being bad solely because people “grew up” there?
There are actually a ton of people who live in these dump neighborhoods but can afford a $800 a month nicely renovated small single family but they have to live in the bad neighborhood because there isn’t much clean cut “gentrified” cheaper neighborhoods around.
Real Estate Agent · Philadelphia, PA · Member since 2018 · 416 posts · 396 votes
7y
I've had to spend a few days thinking about this question to really give an answer I see as acceptable. It is a great question and I am glad it was asked!
Unfortunately, sometimes progress for some can have unintended consequences for others. Whether it's a neighborhood gentrification or mom and pop shops being forced to close due to big business. We can even go as far to say that Netflix killing Blockbuster and Amazon causing harm to traditional retail(taking jobs away from low level employees) can be seen as consequences of progress. We can't stifle progress in society (or for ourselves) just because others will be left behind. It's selfish, but I truly can't think of another way to answer.
The only thing that I could really think of that would somewhat stifle the effects of gentrification would be that people who lived there for a set amount of time could be essentially grandfathered in. What I mean is their taxes could stay the same or only go up a fraction compared to the rest of the neighborhood.
"Just go get a new job and move" isn't a thing for blue-collar workers and below. In case you weren't aware, doing those things costs money.
Getting up and moving as been an American tradition since the pioneer days. Back then it was hard. You had to risk everything and get in a wagon and have no idea what you might find. Or if you’d make it.
Now you can travel across the country in a few hours for a few hundred bucks. Yet people are moving less in search of a better opportunity.
The attitude toward poor folks you display here is the reason people hate all investors. Seems a bit racially biased as well. Hope you have the opportunity to meet some of these displaced folks and change your opinion about people who don't have the same opportunities as you do.
While I’m not a fan of bagging on poor people, how is that “racially biased” ?
Your claim itself is racially based.
Reminds me of a conference call I was on. Someone was talking about high crime, and a lady on the phone said “oh you mean black people?” She said it wish such condensation like she was “catching” him saying something racist, and the rest of us were thinking “did she just say what I think she said?”
@Jonathan Anderson I'm straight up mexican or chicano whatever you want to call it but i find it crazy to call yourselves privileged just because you're white. I'm sure most of BP would agree. We each create or build our own wealth, i'm not about that life were i'd be blaming others for my misfortune. That is where this "white privelage" came from in these last few years, others blaming and pointing fingers for THEIR misfortunes.
I fundamentally and wholeheartedly disagree. I do not subscribe to the "pull yourself by the bootstraps" mentality. Best of luck with all that you do.
How can you not believe in pulling yourself up by your bootstraps”? It’s the American story. A very large % of the rich were not born to rich families.
I grew up eating cereal for 3 meals a day. Government cheese and powered milk. Know how I made $ as a kid? Got a paper rout before I was technically allowed. Picked nuts off trees and sold them door to door while asking to do odd jobs. Found out how to buy “fundraising” candy bars on my own and pulled them in a wagon too office buildings to sell.
How do you think most wealthy people get that way? How do you think most poor stay that way? Do you discount individual drive and effort and put it at the feet of the mythical systemic racist bogeyman?
Rental Property Investor · Chappaqua, NY · Member since 2015 · 1k+ posts · 947 votes
7y
That’s what I’m saying. Is there another way to get rich other then doing it yourself?
is there another way to even come to this country with nothing and get a house and a car without doing it yourself?
the beauty of life is struggle. Take away that and make everything nice and soft and easy and people won’t get as much done.
Anyone that’s poor should read this a few times..... Free **** is not good for people. learn that right now, if you want to give yourself a chance in life cut yourself off from the stingy handout and go hungry. Got kids? Take it of course but get off it ASAP.
@Jonathan Anderson I'm straight up mexican or chicano whatever you want to call it but i find it crazy to call yourselves privileged just because you're white. I'm sure most of BP would agree. We each create or build our own wealth, i'm not about that life were i'd be blaming others for my misfortune. That is where this "white privelage" came from in these last few years, others blaming and pointing fingers for THEIR misfortunes.
I fundamentally and wholeheartedly disagree. I do not subscribe to the "pull yourself by the bootstraps" mentality. Best of luck with all that you do.
How can you not believe in pulling yourself up by your bootstraps”? It’s the American story. A very large % of the rich were not born to rich families.
I grew up eating cereal for 3 meals a day. Government cheese and powered milk. Know how I made $ as a kid? Got a paper rout before I was technically allowed. Picked nuts off trees and sold them door to door while asking to do odd jobs. Found out how to buy “fundraising” candy bars on my own and pulled them in a wagon too office buildings to sell.
How do you think most wealthy people get that way? How do you think most poor stay that way? Do you discount individual drive and effort and put it at the feet of the mythical systemic racist bogeyman?
Lender · Raleigh, NC · Member since 2012 · 957 posts · 639 votes
7y
Great topic, with essentially two different mindsets. I'm guessing it's not too tough to figure out who the R's and the Dems are, based on the responses. For those who are interested in this topic, read some of Matthew Desmond's works. He wrote Evicted, which speaks to Poverty and Profit in the American City. Very eye-opening, and may cause you to add some compassion for those in difficult situations. For those who are investors and have never been encumbered by rent control (counterpoint to the push just made above), it's no fun trying to generate any reasonable ROI when the government restricts how much you can charge for rent. That's the conundrum, isn't it?
The question Desmond raises, among others, is whether a home is a right or a privilege. That sets the stage for how government should behave.
I wrestle all of the time with this topic, probably don't do as much as I could to help others, and usually look more to the bottom line for myself rather than solutions to help all of mankind.
I was referring to the "reparations" bit in @Dennis M.s post.
And in yours, "How do you think most wealthy people get that way? How do you think most poor stay that way? Do you discount individual drive and effort and put it at the feet of the mythical systemic racist bogeyman?"
If you don't understand at this point that we have a systemic problem with wealth disparity and racial issues, I know there is nothing I can say that could help you to understand. I work in the trenches with poor kids and families every day as a teacher, and I can assure you, they have plenty of drive. The effort many of these families exert just to make ends meet is humbling to me.
The mythology of "rich people are just better people because they're rich" is absolutely untrue. We exhault them in the US, but they often don't have a ****ing clue about what they are talking about. But I would not stereotype all rich people as out of touch ********. Some are, and some are not. Each individual comes with his or her own story.
Charleston, WV · Member since 2017 · 113 posts · 50 votes
7y
@Evan Parker
I never really considered buying undervalued property as anything other than business.
I thought I had helped the community by buying the houses criminals were using for their illicit business. I thought I had helped when I saw kids playing outside again
@Jonathan Anderson I'm straight up mexican or chicano whatever you want to call it but i find it crazy to call yourselves privileged just because you're white. I'm sure most of BP would agree. We each create or build our own wealth, i'm not about that life were i'd be blaming others for my misfortune. That is where this "white privelage" came from in these last few years, others blaming and pointing fingers for THEIR misfortunes.
I fundamentally and wholeheartedly disagree. I do not subscribe to the "pull yourself by the bootstraps" mentality. Best of luck with all that you do.
How can you not believe in pulling yourself up by your bootstraps”? It’s the American story. A very large % of the rich were not born to rich families.
I grew up eating cereal for 3 meals a day. Government cheese and powered milk. Know how I made $ as a kid? Got a paper rout before I was technically allowed. Picked nuts off trees and sold them door to door while asking to do odd jobs. Found out how to buy “fundraising” candy bars on my own and pulled them in a wagon too office buildings to sell.
How do you think most wealthy people get that way? How do you think most poor stay that way? Do you discount individual drive and effort and put it at the feet of the mythical systemic racist bogeyman?
The idea that "I did this, so all 7 billion people on the planet can do it too" is painting with far too broad a stroke. Many born into poverty have absolutely no resources to guide them towards building the skills that lead to self-sufficiency and building wealth. It's like handing someone a plane, a tank of fuel, and a "Piloting for Dummies" book and wondering why they can't figure out how to fly a plane on their own.
