Its all a matter of perception I suppose.  

They know they live in a misunderstood neighborhood and the minute perception more closely aligns with reality, county assessments and their property taxes will go way, way up.If you're going to invest in low-C and D-class neighborhoods, you've got to walk the streets at different times of the day and keep notes.

https://www.biggerpockets.com/blogs/9232/55313-intro-to-section-8---your-perceptions-vs-my-realities

And contrary to popular perception, California has a massive amount of stupid people - uneducated college educated, clueless, Pollyannas that think they are special and the entire world should listen them them and their enlightened views.

Perception is reality.

There is no justification for a 4 million dollar home, it's perceptual value and those perceptions change.

I'd suggest you look at a large public housing development and the issues of public perception, which steers your marketing abilities regardless of rent pricing, low, low-moderate or moderate.You also end up competing against yourself, one unit will always be more desirable, you'll learn to stager rents and not show some units until others may be rented.It's great to go in and redevelop an area, improving and increasing values, but it's not just dependent on the dollars like looking at the ARV of one property.

They want it so bad, they're willing to work a crappy job for it, to live in a tiny apartment in Staten Island and pay ridiculous rent, to smell awful smells, to touch grimy surfaces, to be deafened by sirens and traffic day and night, to be assaulted on the subway, to live with rats.

You have to understand "perception" and what that means.

But maybe a more important question to ask (from a real estate investing point of view) is this: What's the public perception of the level of risk?