gwern comments on [Open Thread] Stupid Questions (2014-02-17) - Less Wrong

3 Post author: solipsist 17 February 2014 05:34AM

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Comment author: Qiaochu_Yuan 18 February 2014 04:52:58AM 5 points [-]

There seems to be a pretty sharp lower bound on how cheap a living situation (e.g. rent on an apartment) can be in the parts of the United States I'm familiar with. I would have thought that there would be demand for cheap-but-bad housing on the part of people with low income. Here are some hypotheses I've come up with for explaining this, and I'd appreciate anyone who has relevant knowledge commenting if I'm on track:

  • There is in fact very little such demand in the US because people who can afford any kind of rent at all have grown accustomed to a certain standard of living.
  • The cost of complying with health and safety regulations makes it too expensive to price rent below a certain amount even at the worst the rental situation is legally allowed to be.
  • The people who would try to rent as cheaply as possible are also the people who are least likely to pay their rent (e.g. due to job insecurity), and landlords don't want to take on the additional risk.
Comment author: gwern 19 February 2014 04:20:58AM 5 points [-]

The cost of complying with health and safety regulations makes it too expensive to price rent below a certain amount even at the worst the rental situation is legally allowed to be.

There's also zoning and other issues, and subtler ones like licensing of construction trades, etc. But this seems to be a big part of the story. From last year http://www.psmag.com/navigation/politics-and-law/how-the-trailer-park-could-save-us-all-55137/

By any name, they are the largest source of unsubsidized affordable housing in the country. There are seven million manufactured homes housing 18 million people. In some counties they make up 60 percent of dwellings. Approximately one out of every 12 Floridians lives in a manufactured home. Units built since 1976, when the Department of Housing and Urban Development started regulating their construction, can last as long as site-built homes when they’re well built and maintained. Yet they cost far less: $41 per square foot versus $85 per square foot and up. At least one study, from the University of Illinois-Chicago, on trailer parks in Omaha, Nebraska, found that crime rates in mobile-home parks are the same as the rest of the community; the parks do not cause crime nearby; and that the parks appear to depress crime levels because residents own their homes. In one survey, nine out of 10 owners of manufactured homes said they were satisfied with their dwellings. They’ve found a housing option that suited their budget and needs.

Commentary: http://econlog.econlib.org/archives/2013/04/why_trailers_in.html

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