Photo courtesy of Burst
Consider a city in which a group of investors come up with the idea to purchase an apartment community in a low-income neighborhood. A business model is created to be implemented in three stages: the first stage begins with renting out remodeled apartment units to low-income persons, allowing them to bypass certain credit checks that prevent them from living in other places within the city. Covertly, a system is established to lease certain units to individuals whose credit checks reveal a high debt to income ratio-making it more likely that they will default on their leasing contracts. Because these investors understand the economics of profiting off the poor, they are sure to be successful; there is no sense of immorality in their actions because they believe the poor to be willfully ignorant decision -makers anyway. The city acts as a stronghold for this secret discrimination, since outside of the necessary federal guidelines, there are no rights firmly upheld to protect the poor.
The second stage begins after the necessary filing fees and late charges have been added to the defaulting tenant’s outstanding rent, further preventing the poor citizen from being able to ‘pay and stay.’ People working on behalf of the investors are able to drag the tenant into court to fight what is guaranteed to be a winning fight-in this court, the judge is known to be considerate of landlord rights, even tacking on a gratuity of at least 2% interest for every year the judgment goes unpaid. Appreciation for this thoughtfulness is shown through monetary donations to the judge’s campaign during election years.
The final stage of the plan is the most rewarding. In certain years, after interest has compounded, resources and attorneys are compiled to begin calling in the balance on outstanding judgments. Again, because these investors understand certain economics, they know that those indebted to them often anticipate receiving a large sum of money each year during tax season. Again, these debtors are dragged into court and judgments are issued to garnish wages and tax refunds. Because the indebted are often waiting on their taxes to get caught up where their wages fail throughout the year, a garnishment such as this can be devastating. Now, those who are unable to get caught up on certain debts seek government assistance to supplement the increased gap between their wages and the cost of living, and a new wave of homeless with stained rental histories hit the streets in search of a merciful landlord-and the cycle for the three-stage business model begins again.
Could you imagine?