http://dollarsandsense.org/blog/2020/05/review-of-matthew-desmonds-evicted.html
Matthew Desmond's Evicted: Poverty and Profit in the American City gives us a dramatic closeup of life on the urban economic margin. Published in 2016, it became a bestseller and won a Pulitzer Prize. Today the coronavirus makes the book doubly relevant. The impoverished neighborhoods Desmond describes will be the hardest hit by the virus, and will become even more politically powerless as residents' shifting addresses keep them from voting by mail.
Desmond, a sociologist, spent over two years living among poor renters in Milwaukee, first in a south side trailer park occupied primarily by whites, and then in the north side black inner city. In both places he interviewed and followed several tenants as they moved through the process of eviction, in some cases multiple times. The book fully deserves its acclaim for its sympathetic depiction of the lives of individuals already suffering from poverty, mental or physical illness, addiction, and harsh and arbitrary treatment by public authorities.
Occupants of the trailer park include "Larraine," a deeply religious widow, who keeps her trailer fanatically neat, but won't deny herself tiny luxuries she can't afford. And there's "Scott," a nurse turned drug addict following an accident, but who eventually makes it through rehab. Inner city residents include "Arleen," middle-aged with two little boys. The older boy has behavior problems, possibly because he attends several different schools each year. The younger boy has asthma, necessitating frequent trips to the emergency room. And there's "Lamar" and his sons. Lamar, who has lost his legs below the knees, spends his days playing cards and smoking pot with friends and neighbors.
Desmond also follows Arleen and Lamar's landlady, "Sherrena" a remarkable black woman slumlord. Sherrena is proud of the business she has built with her husband, "Quentin," buying one small decrepit property at a time until she owns over a dozen. She is often kind to her tenants in small ways, and sometimes flexible, but that doesn't stop her from evicting when they get too far behind.
As Desmond points out, most of the very poor like his subjects live in private rental housing, not in public housing or shelters—though they reluctantly resort to shelters in an emergency. All his subjects receive some form of stingy public assistance: disability payments, welfare to mothers with small children, food stamps and sometimes emergency rent assistance —all subject to being cut off for an infraction like failing to show up for a meeting with an agency representative. In the inner city they may live doubled or tripled up with others, sometimes three generations in one apartment. Some of them work part time for wages, or do odd jobs in the informal market. Eighty or more percent of their incomes go for rent with the result that they easily get behind on the rent and utilities. Desmond describes conditions in some of the apartments, mostly in two to four-unit buildings: grimy carpets, clogged pipes, broken appliances, holes in windows and walls. Sometimes tenants lose apartments not for falling behind on the rent, but because the city condemns the property or a fire destroys it. Landlords tolerate tenants staying behind on the rent for long periods; they seem to make an implicit bargain: we won't immediately evict you but in exchange you won't complain about conditions.
The eviction axe falls soonest and hardest on single women with small children, especially in the northern black slum. Desmond follows Arleen and her two boys as they're pushed from one dreadful apartment to another with stopovers in a shelter. Landlords especially dislike children, both because they may cause damage, for example by throwing a toy down the toilet, and because they bring authorities' attention to the property. Landlords dislike single women too, because if they complain of abuse by a boyfriend, that also attracts unwelcome attention of authorities. Tenants rarely show up in court to challenge eviction proceedings, even when they might have a good claim that their apartments weren't habitable. They may be ignorant of their legal rights, or intimidated, or lack childcare, or afraid of losing time from work.
Desmond's subtitle, Poverty and Profit in the American City, suggests that slumlording is a very profitable enterprise. The limited data he presents, on close examination, doesn't necessarily support the case. Slum rents are not significantly lower than rents for middle class housing elsewhere in the city, which seems perverse and unfair. However, slumlords face higher costs, including the cost of collecting rent, of constant small repairs, and fines for violating codes. The also face higher risks, such as the risk of having a property condemned and demolished, or destroyed by fire or flood. Still the question lingers, why will tenants pay the same price for run down housing as the going price for decent housing in better neighborhoods? Answer: these aren't middle class tenants. Slumlords accept tenants with little or no background checks, tenants with a criminal history, or a drug history, or a history of evictions. Slumlords give month to month leases, without the protections built into formal leases in better neighborhoods.
Desmond provides data on the owner of the trailer park, "Tobin." Tobin had bought the trailer park, with its 131 run-down trailers in a bad neighborhood, for $2.1 million in 1995, and paid it off in nine years. After property taxes, water bills, regular maintenance, staff salaries, advertising, vacancies and eviction costs, Desmond figures Tobin took home roughly $447,000 each year, approximately 21% return. However the true return should be considerably smaller taking into account the depreciation of the trailers, unreported expenses paid in cash, and substantial risk. At the time Desmond lived in the park, a local Alderman was trying to shut it down, and did force Tobin to engage more "professional" management—leading Tobin to sell out and retire. Moreover, a big chunk of that $447,000 is Tobin's own imputed wage for his intensive hands-on management, further reducing the return on the capital he put in.
Desmond gives no such accounting for Sherrena. She and her husband Quentin make enough to live in a nice house, drive a fancy car and take occasional short vacations to Caribbean resorts. Like Tobin, they rely heavily on their own tenants and informal market laborers to make low-quality repairs. As does Tobin, they keep close tabs on every tenant. Rent collection is super labor-intensive: at the beginning of the month, when tenants have just received their assistance checks, Sherrena and Quentin drive around to the properties, barge in, and demand the rent, sometimes bargaining for partial payments or payments as labor, for example, painting an apartment. Quentin carries a gun; there's no telling when confrontations with tenants will get ugly. There are often drug-related killings in the neighborhood. Slumlording in a poor black neighborhood is not for the faint of heart.
Desmond makes two substantial policy proposals:
First, low income people should have a right to free legal representation not only in criminal cases but also in civil cases like evictions. This makes excellent sense, assuming it could be funded when public defender systems are already desperately inadequate.
Second, Desmond proposes a system of universal housing vouchers. The idea has many virtues. It recognizes that all citizens have a basic right to housing. After all, Desmond writes, if mortgage deductibility benefits the middle and upper classes, why not something for the poor as well? Housing vouchers would eliminate much of the arbitrary bureaucracy that determines who qualifies for assistance and who doesn't, as well as the stigma of relying on aid.
Implementation of universal vouchers however raises many questions, such as: What other income supplement programs would vouchers replace? Would landlords be limited in additional rent they charged and how would such a limit be enforced? Tenants receiving Federal Section 8 vouchers pay some 30% to 40% (depending on location) of their income as rent and the Federal Government pays landlords the difference between that and estimated local market rent—a paperwork-heavy procedure. About 1.2 million people receive Section 8, with a many-year waiting list. A universal housing voucher system would be vastly more expensive than one targeted only to the qualified poor. Who would pay for it and how? In my view, a local voucher system exclusively for primary residents—tenants and homeowners—might be feasible if paid through property taxes. Since slum property is close to worthless, the system would be strongly redistributive, with the burden falling primarily on corporate property.
The Federal 2018 poverty level was $12,000 a year for one person and $25,000 a year for a family of four. In that year, the Census designated as poor 38.1 million U.S. residents, 11.8 percent of the population. Desmond gives a face and personal story to just a few of these. By the time he finishes the book, his subjects have almost become friends, leaving us to worry and wonder what eventually becomes of them.
As for Desmond's slumlords, Tobin and Sherrena, it's easy to see them as villains, exploiting vulnerable tenants for profit. I think that's worse than a mistake: it diverts attention from the real villains. Tobin and Sherrena operate at the margins of the economy, with no political or economic power. They make a good living by hard hands-on work and risk-taking. The real villains are a diffuse lot of corporate CEO's, bankers, lawyers, private equity capitalists, hedge-funders, lobbyists and their dependent politicians. Over the last forty years these have increasingly rigged both the economy and the tax system in favor of the One Percent—who now shelter safely in their summer mansions or super yachts, remote from the misery they cause
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