A bill recently proposed in the Delaware state legislature was discussed in the latest Zoom call held by the Dirt Lease executive committee. After the Founder put it up on the screen, the Brady Bunch quieted down and read. The COO moved his lips. The General Counsel frowned. HR pursed her lips and nudged the GC in the ribs with her elbow. The Chief Diversity Equity and Inclusion Officer read attentively, and then made thoughtful but non-creepy eye contact with her computer’s camera. After a few minutes, the Founder broke the silence.
‘What do you think’, he said.
‘I think it is crap’, the GC said.
‘I think it will open a can of worms’, HR said.
‘I think it will be good for equity’, DEI said.
‘How so’, the Founder said.
‘Well, the bill prohibits park owners from increasing lot rent so long as there is a health or safety violation outstanding against the park’, DEI said. ‘There are a lot of park owners who don’t take good care of their properties. This will create an incentive for them to do a better job. When landlords don’t pay attention, poor people, women and people of color suffer.’
‘Very true’, the Founder said.
‘Some deadbeat landlords are in New York State’, DEI said. ‘Some are nationwide.’
‘I can name a few’, the Chief Marketing Officer said. His skin was paler than usual and his linen shirt was wrinkled. He wore a Mad Men-era wide tie, and had lost a lot of weight in the past six months. Standing beside HR in front of the mirror in the women’s room at Dirtlease headquarters, the head of Word Processing had recently told HR that she thought that Marketing had been taking Ozempic. ‘He has lost so much weight so quickly’, she said. ‘And he has Ozempic butt.’
‘Please don’t name any names’, the Founder said. HR regretted that she could not see below Marketing’s waist on the Zoom screen. There must be a way to check for Ozempic butt from the way a guy sits, she thought.
‘These residents are at the mercy of bad actor owners’, DEI said. ‘A mobile home is not very mobile Do you know how much it costs to move a manufactured home?’
‘Very well’, the COO said. ‘I do it every day.’
‘Residents can’t afford that. They are vulnerable to park owners who don’t respond to resident complaints and who let deferred maintenance slide.’ As she spoke, the COO thought, She is, like, twelve years old. She should try running a park. See what she says then. But she is fun to look at.
‘A tenant who doesn’t like where she lives can sell her home’, the COO said. ‘Convert an illiquid asset to cash. Absquatulate. Move into an apartment. He or she doesn’t need to move the home.’ The lines around DEI’s mouth became tighter. She seemed to be struggling not to say something that she would later regret.
‘Do people have anything else to say about this’, the Founder said.
‘I think it’s communism’, the COO said. ‘My property, my rights, my rental hikes.’
‘Anyone else’, the Founder said.
‘I think it might lead to unintended consequences’, a voice from the lower-right corner of the screen said. When people looked down, they saw that the guy who had spoken was the Chief Economist for Dirt Lease. That surprised people, because Economics rarely spoke, and when he did, people’s eyes glazed over.
HR remembered that, the last time she had been in the office, she had eaten lunch with the regional manager for the Southern Tier. When they met, HR noticed that the Regional Manager was wearing brighter colors than usual and seemed to levitate rather than to walk. ‘Who are you screwing’, HR asked her. ‘He must be something else’. The Regional Manager had made a sign of zipping her mouth shut, smiled and glowed. After the third martini, she admitted that she had been screwing Economics. ‘Omygod’, HR giggled. ‘Really? Is it true, what people say about economists?’ She reflected on her fifteen-year marriage to the GC. What people said about lawyers, she thought, sadly, was true. ‘Oh, yeah’, the Regional Manager said. ‘And more’.
‘It is motivated by admirable policy goals’, Economics said, ‘But think of the secondary effects.’
‘Go on’, the Founder said.
‘A law like this creates an incentive for residents to complain about health issues. The bill freezes rent hikes if, at any time during a twelve-month period, one resident files a complaint with the court. That means that, if one person does not want their rent raised, they can file papers with the applicable court. A group of five or ten or twenty tenants could even rotate the task, one doing it this year, the next doing it the next, and so on.’
The Founder put the text of the statute back on the screen. The Brady Bunch furrowed their brows and squinted their eyes. The COO moved his lips. ‘Son of a bitch’, he said.
‘And that’s not all’, Economics said. ‘Rent increases are stayed for the whole year. So this is, in effect, a get-out-of-jail-free card for residents who want to freeze their lot rent in perpetuity – and who doesn’t want to do that?’
‘Son of a bitch’, the COO said. Marketing turned his video off so that he could snicker without the rest of the inner circle seeing. He did not think much of the COO. He thought he was a knuckle-dragger who stuffed guys like Marketing into lockers in high school. The COO’s failure to come up with new content was proof of that. The GC asked himself why the hell he hadn’t made the observation that Economics had just made. HR wondered if the Regional Manager could keep notes, or draw a picture for her of what economists are like in the sack. Economics went on.
‘It gets worse’, he said. ‘It is like Russell’s Paradox’
‘Russell who’, the COO asked.
‘To illustrate a paradox baked into set theory, Bertrand Russel came up with the following paradox. In a small town in, say, New Jersey, the barber is the person who shaves all those, and only those, in town who do not shave themselves. The question is – does the barber shave himself? Assume that the barber either shaves himself or does not shave himself, and he cannot both shave himself and not shave himself.’
The COO began to snore. DEI smirked. Everyone else furrowed their brows.
‘Assume the barber shaves himself. That can’t be the case, because he shaves only people who do not shave themselves. So – the barber can’t shave himself.
‘But – since the barber does not shave himself, then he is someone who does not shave himself. Therefore, he must shave himself, because he is the guy who shaves everyone who does not shave themselves.
‘But – we know that the barber cannot shave himself. So, he both shaves himself and does not shave himself. A is the case, as well as -A.’
‘I thought that a proposition cannot both be the case and not be the case’, Marketing said.
‘It can’t’, Economics said. ‘That’s the problem’. HR remembered a male model from the eighties and nineties who had made a career of posing for romance novel covers. When she googled him, she saw that he was still rich and single, living in California, and that his father had been an industrialist in Turin. Maybe he had taken an economics degree, she thought.
‘In set theory, some sets, such as the set of all sets, are members of themselves’, Economics continued. ‘Other sets, such as the set of all penguins, do not contain themselves, because they are not penguins. However, the set of all sets that are not members of themselves are like the barber. If the set is not a member of itself, then it is a member of itself; but if it is a member of itself, it is not a member of itself, because it is the set of all sets that are not members of themselves. This contradiction was initially discovered by a bunch of academics at Göttingen in the late nineteenth century, but Russell was the first to publish a paper about it.’
‘Isn’t that like a catch-22’, Marketing said.
‘That is a shitty book’, Economics said. ‘There is no plot to hook the reader, no sense-writing, no representation of a narrator’s consciousness. The book is summed up in the title. But, yeah, Heller was getting at the idea of paradox. The main character, Yossarian, an American pilot in Italy during the Second World War, wants to go home. To go home, he has to fly more missions. The doctors tell him that, if he is crazy, they will give him a discharge – but you have to be crazy to fight a war. He resolves to live through the war, even if he dies trying. Now you know everything there is to know about the book. Spend the time you would have spent reading it reading Never Let Me Go, by Kazuo Ishiguro, old copies of Mad Magazine or the Wretched Mess News, Sophus Helle’s translation of Gilgamesh, or anything by Kevin Barry.’
‘Can we stick to the question at hand’, the Founder said. ‘How is the proposed Delaware statute like Russell’s paradox?’
‘Because it puts park owners in the impossible position of having to obey and not obey a law at the same time.’
‘How so’, the Founder asked.
‘Well, a lot of parks have deferred maintenance problems.’
Marketing snapped his fingers like a beatnik. The COO nodded exaggeratedly.
‘And a lot of these parks have below-market lot rents. For a long time, mom-and-pops didn’t raise lot rents consistent with inflation’.
‘M-hm’ the chorus murmured. DEI looked uncomfortable.
‘Capital improvements cost money. You can’t fund infrastructure upgrades without raising lot rents. But under the proposed law, if you need to upgrade a park’s infrastructure – if the roads need to be paved, say, or the septic tanks need to be replaced, or if sewer lines are Orangeburg – you can’t raise lot rents. So, effectively, if you buy a park with infrastructure problems in Delaware, you will have to raise lot rents and not raise lot rents at the same time.’
‘The fuck’, the COO said.
‘But –‘ DEI said.
‘Can you think of anything similar in this state’, the Founder asked.
‘Oh, yeah’, Economics said. ‘The Nakba Law’
‘The what’, the COO said. HR imagined measuring Economics’ inseam while she fitted him for a bespoke suit.
‘Sorry- the Housing Stability and Tenant Protection Act of 2019. It contains two provisions that are different in substance but similar in effect to the proposed Delaware law.’
‘Explain’, the Founder said.
‘First, it instituted rent control for manufactured housing communities. Park owners can only increase rents of right by three percent annually. This can be augmented to six percent, in the case of capital expenditures or increased operating costs. These numbers are not indexed to inflation.’
‘That keeps greedy out-of-state owners from raising lot rents on tenants on fixed incomes’, DEI said.
‘There are greedy in-state investors, too’, Marketing said. ‘I know some.’
‘Rent control does not work’, Economics said. ‘The first person to write about this was Milton Friedman in an article that was published during the forties, but pretty much every economist agrees on the point now, not just Chicago School fundamentalists. Rent control reduces supply, creates a disincentive for owners to repair property, and causes misallocation of resources. Rent control makes renters suffer.’
‘Hmph’, DEI said.
‘In the case of manufactured housing communities, rent control does two things. First, it only benefits tenants who are resident in applicable parks on the day the regulation becomes effective. When homes trade hands on the secondary market after that, the benefit of low lot rent is baked into the price of the home. Effectively, that means that people who buy homes after the regulation is passed – a large portion of the people who are meant to be protected by the regulation – are not protected by it.’
The COO’s eyes got wide as mince-pies. ‘I never thought of it like that’, he said. HR felt warm and gooey inside.
‘The second is that it creates an incentive for owners to convert parks to another, non-regulated use. If lot rents are capped at $350 a month, say, a rational owner will tear down the park and build luxury apartments that rent at $2,500 a month. That makes sense even if you halve the number of units.’
‘But – apartments are not rent-regulated in most towns in New York’, the GC said. ‘Why has this not led to a mass closure of parks?’
‘That is the legislative paradox. The Nakba Law also contains a provision that says that, if a park owner converts a park to a use other than manufactured housing, she is required to pay each resident up to $15,000 to offset the cost of moving the resident’s home.’
The COO opened his hands and started to count on his fingers. ‘Wait – so, if you have a hundred lots, that’s –‘
‘One point five million’, Economics said.
‘How many lots do we own’, the COO asked the Founder.
‘I lost count in 2018’, the Founder said. ‘A lot.’
‘Would it ever be profitable to convert a park to another use under that regime’, the COO asked Economics.
‘Depends on the numbers’, Economics said. ‘If lithium or gold were discovered under the park, then yes. It is doubtful that Amazon would pay a million and a half extra to put a warehouse on the site of a hundred-lot park, if it could avoid that cost by buying the land next door. It would almost never be profitable to convert a park to apartments.’
‘So you need to keep a park operating as a park’, the Founder said.
‘Correct’.
‘Even if that is not the highest and best use of the land.’
‘Yup.’
‘And you need to continue to operate the park even if it is a shitty park?
‘That’s right.’
‘And you can’t make it into a non-shitty park, because you can’t fund upgrades?’
‘Yes.’
‘Is that misallocation of resources of the type that Friedman and other economists have said is an effect of rent control?’
‘I believe so.’
‘And under the law, you can’t increase lot rents enough to fund, say, a new septic field?’
‘Nope.’
‘But you can’t convert the park to a type of property that would not be affected by aforesaid septic issues?’
‘No.’
‘So, park owners are required to maintain shitty parks as shitty parks.’
‘Exactly.’
‘What the fuck’, the COO said.
Economics scratched his head. ‘Can you rephrase the question, please’, Economics asked.
‘I am not sure it was a question’, the COO said.
‘But this will keep housing costs low’, DEI said. ‘Housing costs in New York State have exploded in the past decade. More than half the population of the state spends more than a third of their gross income on housing. When the shit comes down, it is old people, the poor, and people of color who suffer the most.’
‘I agree about the problem’, Economics said, ‘But not about the solution. Making residents live in shitty parks is not the best course of action. Sticking it to the man is salient, it scratches an itch and it provides a dopamine boost to people in Albany, but it does not produce the most utility for the widest number of people.’
‘But you need to consider equity’, DEI said.
‘I thing that ‘equity’ should be defined as the outcome which provides the greatest benefit to the least-advantaged members of society’, Economics said. ‘It has been perverted to mean the outcome that causes the greatest harm to the most-advantaged members of society. Sticking it to the man doesn’t do any good for tenants. It just, well, sticks it to the man.’
‘Hmph’, DEI said.
‘A better solution to the housing crisis would be to increase supply’, Economics said. ‘When supply increases and demand stays steady, prices fall. It is almost impossible to get new manufactured housing communities permitted, because nobody wants what they perceive as trailer trash in their backyard. Minimum lot sizes and setback requirements make building multifamily housing in most suburbs impossible. Get rid of the NIMBYs and you could make a dent in the housing crisis.’
Marketing snapped his fingers. From the way he fidgeted on his chair, HR thought he might, in fact, have Ozempic butt.
‘If you are a big-government advocate’, Economics continued, ‘You can institute support for renters through direct grants or insurance. You could also institute rent control indexed to inflation, but provide direct grants to park owners to upgrade their infrastructure.’
‘Why aren’t we doing that now’, the GC asked.
‘The politics are difficult’, Economics said. ‘There is rarely money to fund direct grants. Zoning laws are local, rather than state-wide, and NIMBYs don’t like to change them. It takes patience and luck to game out potential secondary effects of legislation. It is fun to stick it to the man, but it is not terribly fun to write well-crafted legislation intended to maximize utility.’
‘The time for the meeting is up’, the Founder said, ‘But I would appreciate it if everyone would stay on a bit longer, so that we can explore this issue in depth.’
‘Sorry, I have to drop off’, Economics said. ‘Continue without me. I need to do a photo shoot for the cover of a new romance novel called Touched by the Invisible Hand. After that, I need to get my Porsche out of the shop and save some widows and orphans in sub-Saharan Africa.’
Wretched Mess News…🤦🏻♀️