The Investor's Shelf — one book
Evicted

Evicted

Matthew Desmond
2016
448 pages · about 7h 28m to read OL17828326Wgoodreads

Summary

Desmond, a sociologist, lived in a Milwaukee trailer park and in a rooming house on the north side of the city between 2008 and 2009, following eight families and two landlords through repeated evictions. The book won the Pulitzer Prize and is based on ethnographic fieldwork combined with original quantitative data he collected on eviction rates.

His central argument is that eviction is a cause of poverty rather than only a consequence of it. He documents the mechanism: an eviction record makes subsequent housing harder to obtain, which forces families into worse and more expensive units; each move costs money and possessions; children change schools repeatedly; job loss frequently follows; and the record follows people for years.

The economic material is the part most relevant to investors. Desmond documents that landlords in poor neighbourhoods frequently earn higher returns than those in affluent ones, because rents do not fall proportionally with property values or with maintenance standards, and because tenants with eviction records and poor credit have no alternatives. He follows two landlords in detail and reports their finances.

He also documents the effect of nuisance ordinances, which penalise landlords for tenant calls to police and therefore produce evictions of domestic violence victims. Desmond writes as an advocate and the concluding policy chapter argues for universal housing vouchers. Landlord organisations disputed the characterisation. The ethnographic method captures depth at the cost of generalisability, though the quantitative work supports the wider claims. The finding that poor neighbourhoods produce higher rental yields is the most commercially uncomfortable and best documented.

Key takeaways 8

  1. Eviction causes poverty rather than only resulting from it, through job loss, school disruption, lost possessions and a record that restricts future housing.
  2. Landlords in poor neighbourhoods frequently earn higher returns than those in affluent ones, because rents do not fall proportionally with property values.
  3. Tenants with eviction records and poor credit have no alternatives, which removes the market discipline that would otherwise constrain conditions.
  4. Most poor renting families spend more than half of their income on housing, which leaves no capacity to absorb any unexpected cost.
  5. A single unexpected expense triggers the sequence that ends in eviction, since there is no margin anywhere in the household budget.
  6. Nuisance ordinances that penalise landlords for tenant calls to police produce evictions of domestic violence victims.
  7. Eviction is far more common than the housing policy literature had recognised, which Desmond established with original data collection.
  8. The vast majority of eligible poor families receive no housing assistance, which makes the private rental market the actual housing policy.

Who should read it

Investors in residential property and anyone examining the economics of low-income housing, alongside readers wanting the ground-level account.

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