R e z i n

We all see desperate people living on the streets and panhandling on drugs, but many folks lack a clear understanding of how we got here and how basic greed has created this condition.

The first stage of homelessness is somebody losing their housing and then not being able to afford to get into a new place. Most landlords require 2 to 3 months worth of rent upfront to obtain the keys to an apartment, if you pass a credit check. The average credit score in the United States is a 715, and the average score required to rent and apartment is 650. That leads a very significant amount of Americans in a predicament. If someone does have the credit, with the average rent running $1675, one needs just over $5000 up front. At $20/hr, that would require over 400 hours worth of wages. It would also take about 140 hours worth of wages a month just to afford rent. a lot of folks just can’t make that happen.

Why are rents so high when compared to wages? One word answer, algorithms.

Another one word answer, greed. Many property management companies use algorithmic price collusion to drive up rents, and RealPage is being sued by the federal government over it. It doesn’t stop the property managers from using it. It doesn’t stop average Americans from working from the companies that do. The real estate companies that hold these properties play games with neighborhoods to artificially drive up prices. They will buy a property and put too much into it for the neighborhood that it’s in on purpose. Even if it doesn’t sell, it will raise the comps in the area. That will give them an advantage on the price on other properties that they have in their portfolio in the same area. This will affect the algorithm and effectively drive up rent.

As rents go up, working folks are no longer able to afford to renew their lease and lose their housing. Now they don’t have the upfront money necessary to get a new place. Now this necessitates getting a storage unit, which is another predatory business that takes advantage of people when they are down. One is reduced to staying with friends or family, if they are lucky, or a variety of other unsavory situations. This can be a severe hit to the ego and self-esteem. Also, being involved with other people in the name of shelter, may lead to exposure to negative consequences such as substance abusers or physical abusive people. It becomes very easy for things to spiral quickly for people in these situations. Many times they were hard-working individuals, just trying to get by like anybody else that went through a bad situation. The person you see walking up to your car at the traffic light is not the person that they are to their family, or the people they grew up with knew. Something happened to them, and it was done by the people around us.

Yes, it’s the corporations that are doing this to our communities and causing these people to be put on the street, but they cannot do that without agents in the streets. Everybody knows somebody that works in real estate. Maybe your cousin sells houses. They get hooked up with a lender and start managing bank owned properties. They have a partner that’s a contractor, but because they’re not married, they keep the businesses separate. This allows the property manager and contractor to parasitically bill each other at the expense of the bank. When the bank is ready to let the property go, they are in the prime position to snatch it up and profit some more. We view these people as successful, hard-working members of our communities, but often don’t think of the schemes of their employing and the harm that it causes the economy.

A perfect example of this is Mr. Tesla Houseflipper. This guy recently remodeled a house in an economically disadvantaged part of the city that I work in. I see him stuffing his little truck with all the supplies straight out of Home Depot. He took a house in a neighborhood where the average value is under $100,000 and most people are renting, and turned it into an ostentatious disaster that does not fit the neighborhood at all. The entire thing was painted shades of gray, the front yard was filled with gravel, and the backyard was turned into a huge inground pool with a high fence around it. Most people who would want that kind of house would not want to live in that kind of neighborhood. If there were kids growing up in that house, they would probably have issues with the kids in the neighborhood around them. It’s questionable whether or not this house is even intended to sell, or just raise the comps in the neighborhood. A lot of people would see this man as a hard-working individual that’s just making a honest living fixing up dilapidated houses, others might see him as the Angel of Death to a community, squeezing it for profit at the cost of the people that live there.

One of the hardest truth for us to confront in our society is the harm that we do to each other by trying to get ahead. Some folks see prosperity as a reward for effort, but sometimes it relies just on much on being willing to participate in a system of exploitation or profiteering. Just because people are prosperous, does not mean that they are good people or they are making their money in an ethical way. Unfortunately, our society is designed to reward these people and people with less money depend on them to make their money which artificially elevates the status of the exploiter.

So yeah, every time you see somebody kissing somebody else’s ass because they have a little bit of money, there’s a possibility that they might be part of the root cause of the homelessness problem.