Liebling said, ‘A girl can sleep with one guy but not be called a trollop. I covered one war but I am labelled a war correspondent’. Ten years ago, Frank Rolfe said, ‘Owning a mobile home park is like owning a Waffle House where the customers are chained to their tables.’ Frank is the fifth-largest owner of manufactured housing communities in the country. Before he bought parks, he had a successful billboard business. He has done more to introduce the business to the broader community than anyone. Because of him, hundreds of thousands of mobile home park residents live in cleaner and safer communities. He has done a lot of things – many of them, good – but his gravestone will say that he said that owning a mobile home park is like owning a BDSM Waffle House.
There used to be a bar in the West Village where you could drink for free, if you consented to being handcuffed to the bar. Maybe there is a Waffle House in Cleveland, where you can eat all the pancakes you want, if you allow yourself to be chained to the table.
Like many great men, Frank is flawed. He is thin skinned. He is a MAGA Republican – except when he is a Reagan Republican. He assumes away some of the problems of mobile home park management. When the market turns – when park prices go down – because everything that goes up, goes down – his evangelism will veer close to pumping and dumping. He says ‘a-FLEW-ent’, instead of ‘A-flu-ent’. He went to college at Stanford.
But – like most great men, he is right about many things.
(It is ironic that the last Republican primary debate happened at the Ronald Reagan Presidential Library. The current Republican party is nothing like Reagan’s party. Reagan backed trickle-down economics, free trade, small government, a balanced budget, a strong military and conservative social policies. I don’t agree with all of these positions, but reasonable people can disagree about that type of thing. Reagan had lost mental acuity by the time he made it to the Oval Office, but he still had some of the qualities that make a good leader. He was tough and personable, he was willing to work across the aisle, and he was a good communicator. He had significant legislative victories including the 1986 reform of the Internal Revenue Code. To the extent Trump has policy positions – his main policy is Trump – he backs tariffs, isolationism, large deficits, government intervention for his cronies and entitlement programs. He has sucked up to the evangelicals and appointed socially conservative judges, but he is divorced three times, bankrupt five times, and has refused to pay for countless abortions. He has ADD, is pathologically narcissistic, can only read paragraphs that contain his name, and is stupid enough to proclaim unironically, ‘Health care is complicated!’.
In the boot camp that I attended, Frank said that it costs three to five grand to rehab a home, and that, if you want to get rid of a resident who is a bad citizen, you merely ‘non-renew’ them. It costs significantly more than five grand to rehab most homes, and you have to go through an elaborate kabuki in New York State to get rid of a bad-neighbor resident. He also said that he does not use an attorney when he closes deals. Property conveyance is usually straightforward, but even simple home surgery is ill-advised.)
Frank appeared on Freakenomics Radio recently. Before the episode made it to my podcast app, he accused the podcast of being ‘woke’ and issued a rebuttal on his own podcast. When I saw that, I thought, ‘Frank is being thin-skinned again’. Then I listened to his podcast and listened to the Freakenomics episode. On balance, I think Frank is right. His statements were taken out of context in a way that distorted their meaning.[1] But that is not the whole problem.
Frank did not bring up the Waffle House metaphor on the episode – he never uses it now, because it has been used to rake him over the coals so many times – but one of the opposing viewpoint speakers mentioned it. ‘If an apartment owner raised the rent on me’, the other guy said, ‘I would just move to another apartment around the block. But if a park owner raises lot rent, tenants can’t afford to move their homes. Like Frank Rolfe said, it is like being chained to the table of a Waffle House’. What he meant is that apartment tenants can vote with their feet when rent goes up, but residents of manufactured housing cannot, because of the transaction costs involved in moving a manufactured home.
Frank called bullshit on that. A mobile home resident can move, if he or she doesn’t like where they live. They can do that by selling their home. Cash is a portable asset. Mobile homes can be converted to cash the same way anything can be converted to cash, i.e. through a sale. When the issue of the portability of mobile homes came up, Frank mentioned that to the interviewer. He said that, in fact, the customers are not chained to the table. They can get up and leave. They can move the same way the owner of a stick-built house can move – by subletting their home or by selling it. That part of his interview was edited out of the final version of the podcast.
Evil Park Owner makes good copy. Reasonable Park Owner Considering All Sides of the Issues and Doing His Best in a Difficult Business is ‘Dog Bites Man’, or ‘Worthwhile Canadian Initiative’.
It gets worse.
Early in the podcast, Frank tells a story about the first person he evicted. That person was a disabled veteran with cognitive differences, a middle-aged woman who was, Frank said, quite pleasant to spend time with. Frank’s quote is not played as a response to a specific question posed by the interviewer. Instead, it is played as background, like mood music in a haunted house. Most importantly, it is cut off in the middle. That distorts the truth. Every discussion of an evicted tenant contains at least two clauses, separated by a ‘but’. For example, a park owner might say, ‘I felt sorry for Junior but it was not fair to his neighbors to live next to him’. He might say, ‘I hate to do this, but it is the only remedy I have’, or, ‘The guy is a scumbag, but I hate to do this because his wife is OK’, or, ‘I know that things are tough, but if everyone doesn’t pay rent, it is not fair to the people who pay into the pot.’ Frank’s testimony is cut off before the ‘but’ clause. Because of that, the clip that is played is presented out of context. I have not heard the whole clip, but I suspect that Frank said something like, ‘This woman was a disabled veteran and a nice person, but she had not paid lot rent in two years, the park needed significant capital repairs which I could not perform without revenue coming in and I did not have any other remedy. It was difficult, but it would have been unfair for her neighbors for me not to do it.’
But that would have been boring.
Frank is a big boy. He does not like to be maligned by the press, but G-d knows he is used to it by now. That said, the real problem with the podcast is not how it treated a certain rich man from Missouri, but rather that it missed the core issue. Steven Levitt teaches behavioral economics at the University of Chicago. When he wrote the first Freakenomics book, he did not intend to push a progressive agenda. Instead, he wrote it to show how the law of unintended consequences plays out in everyday life. He is an economist who dabbles in psychology, not a politician. He looks at data and draws conclusions. He calls his observations ‘freaky’ because they are counterintuitive – not because they support any specific policy agenda.
The manufactured housing industry is a great laboratory for observing how the law of unintended consequences plays out in an environment that is consequential for a large and vulnerable section of the population. Because of that, it deserves economist eyeballs. Want to see what happens when you impose rent control? Look at manufactured housing communities in New York post 2019. Want to see what happens to residents when so-called ‘good cause’ eviction laws are passed? Ditto. Want to see how the regulation of consumer-protection laws affects consumers? Observe changes in the ability of manufactured housing residents to obtain financing in the wake of the passage of applicable sections of the Dodd Frank Act in 2015. Want to see how residents fare under mom-and-pop owners, private equity firms, and in cooperatively-owned parks? Don’t grind your ax. Go out and gather some data! That is what Steven Levitt is a master at, and that is what this podcast episode did not do.
I am a devoted Freakenomics listener. I listen to the podcast when I drive to my parks. When Freakenomics plays on NPR on weekend afternoons, I turn up the volume and ask my wife to shut the vacuum cleaner off. But I think they missed the boat here. They let their policy prejudices get in the way of truth-finding. That would be wrong for any publication, but it is particularly troubling for a podcast that was started by a behavioral economist who warned us to guard against cognitive fallacies like confirmation bias.
[1] Readers who click on the link to Frank’s podcast are encouraged to bait the pop-up bot. I am unsure whether the bot is in fact a bot, or a woman in the Philippines. I believe that Dirtlease readership is massive enough to cripple it in a brute force attack.