Study finds that landlords exploit the poor

Landlords aren't the ones getting rich off of renting properties; slumlords are.

Study finds that landlords exploit the poor
Photo credit: MANDEL NGAN / AFP / Getty Images
  • A new study examined the profits of landlords across Milwaukee and compared them to landlord profits nationwide.
  • They found that for every 10 percent increase in neighborhood poverty, renter exploitation increased by 2.2 percent in Milwaukee and 0.8 percent nationwide. What's more, for every 10 percent increase in black residents, renter exploitation increased by 0.8 percent for both Milwaukee and the nation.
  • This effect ensures that the poor remain poor; since the poor have no choice but to pay rent when they can, any money they could save up is instead siphoned away by landlords.

Anybody who's ever been in poverty before can tell you: It's expensive to be poor. Wealthy people can afford to buy high-quality, long-lasting products or to buy other products in bulk. Not true for the poor. With few resources to spare, the impoverished have to buy crappy cars that constantly need repairs and work physically demanding, minimum-wage jobs that can result in expensive healthcare costs. If you're poor and need a loan, the only one you're going to get will come with a high interest rate attached, reflecting the lender's concerns that you won't pay it back.

Now, new research in the American Journal of Sociology demonstrates how rent is another method by which the poor are kept poor. Surprisingly, the researchers found that the best way for a landlord to make money is not to buy a house in an affluent neighborhood and rent it out. Instead, the most money is to be found by exploiting the slums.

Exploitation can be defined as one group excluding another from a useful resource, enriching itself in the process. In this case, that resource is housing. The researchers quantified this concept as "exploitation rates," or what percentage of a property's value renters paid each month.

In low poverty neighborhoods, defined as those where the poverty rate was less than 15 percent, renters faced an exploitation rate of 10 percent. So, each month, a renter paid one-tenth of the property's value. In high poverty neighborhoods, where the poverty rate was between 50 and 60 percent, renters paid a full quarter of their property's worth in rent each month.

What's more, black neighborhoods faced about double the exploitation rate of nonblack neighborhoods: 10–15 percent versus 20–25 percent, respectively.

Using data to identify the exploitation of the poor

Photo credit: Drew Angerer / Getty Images

To discover this, the researchers examined a variety of datasets on the housing market. Specifically, they used detailed datasets focused on the Milwaukee housing market, which provided data on monthly rent; property values; expenses such as mortgage payments, property insurance, and regular maintenance costs; and uncommon, costly expenses like plumbing repairs.

Using this data, the researchers were able to create a model of exploitation that they could compare to a less detailed nationwide dataset, which confirmed that the nature of exploitation in Milwaukee was true across the U.S. In Milwaukee, renter exploitation increased by 2.2 percent for every 10 percent increase in neighborhood poverty. Nationwide, every 10 percent increase in local poverty increased exploitation by 0.8 percent. The similarity between Milwaukee and the rest of the nation was even more clear when looking at black versus nonblack neighborhoods: In both datasets, every 10 percent increase in the number of black residents increased exploitation by 0.8 percent.

Why slums make money

Landlords place higher rent on properties located in slums because they come with higher risk. The less valuable buildings are likely to be in worse condition, and landlords are concerned about nonpayment from the poor. But these concerns are exaggerated. The researchers did find that repairs were more common in properties located in slums and rent was more frequently missed, but the profits of landlords were still significantly higher. Specifically, landlords in Milwaukee made an average profit of $151 per month from a single unit in a poor neighborhood compared to $21 per unit in more affluent neighborhoods.

Part of this is because buildings with lower property values can easily be bought outright, which cuts out the cost of mortgage payments. Coupled with the fact that landlords frequently own multiple properties, being a slumlord can quickly become extremely lucrative:

Because landlords operating in poor communities cannot know with certainty whether a new tenant will cost them money, they may attempt to mitigate that risk by raising the rents of all their tenants, carrying the weight of social structure into price. Poor renters pay double — purchasing the good and the risk — but because losses remain infrequent in absolute terms, landlords typically realize the surplus "risk charge" as higher profits.

The researchers write that "landlords who have invested in a nonpoor neighborhood are not betting on today but on tomorrow. In poor neighborhoods, however, landlords are betting on today." Properties in more affluent neighborhoods are more likely to gain value over the years compared to those in poor neighborhoods. So, landlords hope that the lower profit from affluent neighborhoods will be offset by the increased value of the property over time. But even when the researchers accounted for this, landlords in poor neighborhoods still came out ahead.

This presents the poor with the choice between homelessness or exploitation. Allowing that exploitation to happen eats away at any savings the poor might be able to accrue, guaranteeing that they'll be confronted with that choice again. As the researchers put it, "money made slums because slums make money."

This is what aliens would 'hear' if they flew by Earth

A Mercury-bound spacecraft's noisy flyby of our home planet.

Image source: sdecoret on Shutterstock/ESA/Big Think
Surprising Science
  • There is no sound in space, but if there was, this is what it might sound like passing by Earth.
  • A spacecraft bound for Mercury recorded data while swinging around our planet, and that data was converted into sound.
  • Yes, in space no one can hear you scream, but this is still some chill stuff.

First off, let's be clear what we mean by "hear" here. (Here, here!)

Sound, as we know it, requires air. What our ears capture is actually oscillating waves of fluctuating air pressure. Cilia, fibers in our ears, respond to these fluctuations by firing off corresponding clusters of tones at different pitches to our brains. This is what we perceive as sound.

All of which is to say, sound requires air, and space is notoriously void of that. So, in terms of human-perceivable sound, it's silent out there. Nonetheless, there can be cyclical events in space — such as oscillating values in streams of captured data — that can be mapped to pitches, and thus made audible.

BepiColombo

Image source: European Space Agency

The European Space Agency's BepiColombo spacecraft took off from Kourou, French Guyana on October 20, 2019, on its way to Mercury. To reduce its speed for the proper trajectory to Mercury, BepiColombo executed a "gravity-assist flyby," slinging itself around the Earth before leaving home. Over the course of its 34-minute flyby, its two data recorders captured five data sets that Italy's National Institute for Astrophysics (INAF) enhanced and converted into sound waves.

Into and out of Earth's shadow

In April, BepiColombo began its closest approach to Earth, ranging from 256,393 kilometers (159,315 miles) to 129,488 kilometers (80,460 miles) away. The audio above starts as BepiColombo begins to sneak into the Earth's shadow facing away from the sun.

The data was captured by BepiColombo's Italian Spring Accelerometer (ISA) instrument. Says Carmelo Magnafico of the ISA team, "When the spacecraft enters the shadow and the force of the Sun disappears, we can hear a slight vibration. The solar panels, previously flexed by the Sun, then find a new balance. Upon exiting the shadow, we can hear the effect again."

In addition to making for some cool sounds, the phenomenon allowed the ISA team to confirm just how sensitive their instrument is. "This is an extraordinary situation," says Carmelo. "Since we started the cruise, we have only been in direct sunshine, so we did not have the possibility to check effectively whether our instrument is measuring the variations of the force of the sunlight."

When the craft arrives at Mercury, the ISA will be tasked with studying the planets gravity.

Magentosphere melody

The second clip is derived from data captured by BepiColombo's MPO-MAG magnetometer, AKA MERMAG, as the craft traveled through Earth's magnetosphere, the area surrounding the planet that's determined by the its magnetic field.

BepiColombo eventually entered the hellish mangentosheath, the region battered by cosmic plasma from the sun before the craft passed into the relatively peaceful magentopause that marks the transition between the magnetosphere and Earth's own magnetic field.

MERMAG will map Mercury's magnetosphere, as well as the magnetic state of the planet's interior. As a secondary objective, it will assess the interaction of the solar wind, Mercury's magnetic field, and the planet, analyzing the dynamics of the magnetosphere and its interaction with Mercury.

Recording session over, BepiColombo is now slipping through space silently with its arrival at Mercury planned for 2025.

Study helps explain why motivation to learn declines with age

Research suggests that aging affects a brain circuit critical for learning and decision-making.

Photo by Reinhart Julian on Unsplash
Mind & Brain

As people age, they often lose their motivation to learn new things or engage in everyday activities. In a study of mice, MIT neuroscientists have now identified a brain circuit that is critical for maintaining this kind of motivation.

Keep reading Show less

Scientists discover why fish evolved limbs and left water

Researchers find a key clue to the evolution of bony fish and tetrapods.

Surprising Science
  • A new study says solar and lunar tide impacts led to the evolution of bony fish and tetrapods.
  • The scientists show that tides created tidal pools, stranding fish and forcing them to get out of the water.
  • The researchers ran computer simulations to get their results.
Keep reading Show less
Coronavirus

Optimism may be dangerous in a pandemic, say behavioral psychologists

Most people believe themselves to be less at risk from COVID-19 than others similar to them, according to a recent UCL survey conducted in the U.S.

Scroll down to load more…
Quantcast