The idea that changed my life

It’s August 17, 2022. Here’s the rundown:

• Trailer parks in the crosshairs

• The idea that changed my life

• Numbers and links

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Investors take aim at trailer parks

Investors have been buying up a lot of homes, further constraining an already-constrained housing market. Now, they’re buying trailer parks.

We have a housing affordability issue in the U.S. Homes cost too much, and that’s mostly because there aren’t enough of them. And we still aren’t building nearly as much as we should. It’s a complicated mish-mash of factors that’s led to one of the worst housing markets ever for certain people.

On top of that, rent keeps going up, like magic.

As a result, people have been looking for cheaper alternatives. That includes trailer parks, which can cost as little as a couple of hundred bucks per month. But trailer parks have recently caught the attention of investment funds — a group that is already causing problems in other parts of the housing sector by purchasing properties to either flip or rent, driving up costs even further.

As my friend Lance writes for Fortune:

In the first quarter of 2022, investors made up a record 28% of single-family home sales, according to a report published last week by the Harvard Joint Center for Housing Studies. That’s up from 19% in the first quarter of 2021. It’s also far above the 16% that investors made up of single-family home sales between 2017 and 2019. (To conduct the analysis, the Harvard researchers analyzed home sale data collected by CoreLogic.)

But back to trailer parks.

Evidently, institutional investors (private equity firms, REITs, and others) are now swarming those, driving up rents, and putting many people on the street. For example, at one trailer park in Washington, rent was $350, and is now being increased to $1,000, according to a Washington Post report. From that same report:

“Mobile homes have long been one of the country’s most affordable housing options, particularly for families who do not receive government aid. About 20 million Americans live in manufactured homes, which make up about 6 percent of U.S. residences, according to federal data. Some experts suggest those numbers could soon rise as more people are priced out of traditional houses and apartments…Overall, they tend to be three to five times cheaper than traditional single-family homes, according to an analysis of census data by LendingTree.”

So, the last bastion — and often last resort — for many people who are simply trying to get by in an increasingly unequal and distorted economy are now being picked apart by the vultures of the investment class. This involves tens of thousands of communities and tens of millions of mostly low-income families and individuals.

A reporter from the Associated Press spoke with a source that says 20% of all mobile home lots across the country have been bought by institutional investors over the past eight years, too — so this isn’t a fleeting, or even new, phenomenon.

Obviously, this is yet another complicated issue without a clear, immediate remedy. But in my mind, it does drive home the fact that there are a lot of people out there who want nothing more than to see green arrows and an upward-trending line when it comes to their investment portfolios, and who may not fully understand the cost of achieving that. In this case, it’s putting millions of people into further financial peril by aiming their money-grubbing vampirism at one of the last places people can live for relatively cheap.

That brings us to another question: Should some things be off-limits to investors? I don’t know, that seems like a stretch. But at some point, with endless rent increases, out-of-control housing costs, and an evident willingness to squeeze every last penny out of anything that the investor class can get its hands on, it’s a wonder how much longer some of these people will be able to keep a roof over their heads.

Add in healthcare costs and everything else? It’s hard to see how people are going to make it work.

Of course, these people always have choices. Limited choices, of course, but choices nonetheless. We’ll have to see how this plays out in the coming years.

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The idea that changed my life

Sometimes a simple, profound concept can change everything.

This is short, and a bit more philosophical than usual, and it’s seemingly at odds with the first part of this newsletter. But it’s something that I’ve thought about sharing for a while, so bear with me.

Sometimes, a thought, concept, or idea resonates with you. It may be a line from a song (“we’re not pretty and we’re not rich,” for example), or a quote that, for whatever reason, strikes a chord. These are relatively rare instances, especially as you get older.

But there was one concept that really hit home with me at one point in my life. I don’t remember exactly when it did, but it really changed my perspective, and I think that it applies to not only me personally, but society at large:

Everything is a choice.

I recall what I consider to be the lowest economic point of my adult life: I worked on the other side of town, three miles away. I typically took the bus to work in the morning. I think the fare at the time was like $2.50. And I couldn’t afford it. I got up at 6 am and walked the three miles in the cold rain because I couldn’t afford the bus fare.

I was frustrated. Cold. Wet. Probably hungry. Unhappy about my situation. And I remember thinking, as I walked the still-quiet city streets, that this was unacceptable — but that my life was the amalgamation of the choices I had made to that point, and this is where it got me. So, it was then and there that I choose a different path.

The next day, I applied to work part-time at a local magazine, and somehow ended up making that work. I also dug in and looked for better jobs — I found one, and incrementally, things improved over time. I look at where I am today, and it’s frankly hard to fathom that I was, at one point in my mid-twenties, unable to put enough money together to get on the bus to go to work.

But again, I had manifested my own reality. I had chosen, in some respects, to be there. And then I made a different choice: To not be there anymore.

I think that we’re all responsible for what happens to us. Obviously, there are things that happen to us that are outside of our control (like the people in trailer parks experiencing wild rent increases with little or no recourse), and there are some people who are in more difficult circumstances that warrant consideration. But ultimately, for most people, it’s on you to dictate your direction.

That’s what was made abundantly clear to me, for whatever reason, that dark, wet, dreary morning. I didn’t like my reality, so I chose a different one.

On a wider, societal level, I think this holds true as well. For instance, I think that it’s entirely possible for us to solve or remedy some of the most pressing issues of our time. We could end homelessness if we wanted to — we choose not to. The cost of doing so, financially and otherwise, is simply too high. We can combat climate change, but we choose not to (for now) for a…reasons. When you end up with a president you don’t like, be it right now or four years ago, who do we have to blame? Us!

Don’t like your job? Get another one — you can choose to go home and have a beer, or you can choose to spend that time filling out job applications or enrolling in a job training program. Time and resources may be limited, but if it’s important, you can find a way to do it. It’s also plausible that you’re enduring the consequences of a choice for a period of time while some ducks find their way into a row — that, too, is a choice.

Naturally, I don’t think anyone chooses to be poor, but we can make choices to improve our financial standing. I can’t tell you how many times I’ve seen people I personally know opt to buy beer, cigarettes, lottery tickets, etc. rather than pay off a credit card balance. And even if you are working at it, there’s always the possibility that something unexpected could happen to set you back to square one.

I also remember a time in my life when I was hung up on some relationship stuff — and I also remember the exact moment that I decided I was over it. For me, it was literally a moment of clarity in that I decided I didn’t care, didn’t want to be affected by it, and chose to move on with my life. Now, I barely feel anything at all! Ha!

While it may feel like you’re being tossed and turned by the tides of fate, it may be worth trying to reframe your thinking — think of everything as a choice. Remember that, no matter what is happening in your life or on a societal level, we’ve opted for this reality. And that you can opt-out, or choose to change it. Those changes may not manifest immediately, but you can change course.

I watched the series finale of “Better Call Saul” last night, and one of the themes of the episode (and show) is that you can choose your course, and change it. That’s what got me thinking about this. It may be a helpful way of framing your thoughts and decisions going forward, or it may not. All I know is that it’s been immensely helpful, and oddly comforting, for me.

I know, I’ll shut up now.

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Numbers, links, and more

• 38%: The percentage of U.S. adults delaying a major purchase because of inflation. (The Balance)

• 12%: The growth in the S&P 500 over the past two months, while the Fed tries to cool the economy — what’s going on? (The New York Times)

• 2X: The growth in “smishing” scam attempts compared to last year. “Smishing” is basically a scam involving text messages. (Proofpoint)

• Dig in: Dissecting a restaurant bill to find out why going out to eat costs so much. (The New York Times)

• “We call it the ‘ick factor’”: The marketplace for used workout clothes is growing. (The Wall Street Journal)

• “Very bad things follow”: When investors get into markets they don’t understand and go overboard (hello, crypto!), it’s…not good. (Morningstar)