I think lots of people are angry about the bail-out right now, and as we speak it is getting even bigger and more complex. I guess we’ll have to wait and see how this government plan proceeds. Thank you for taking the time to share your thoughts.

Stephan, what you described is pretty much the arrangement I have with my tenant. I wish the city could be creative and broker similar arrangements in the abandoned homes. I would think some revenue and people living in the structures would be preferable to what is happening. Thank you for your thoughts!

A friend of mine in a Southern small city actively bought “slum location” run-down houses for a song (like yours.) Some of the reasons for the creation of the slum neighborhood stemmed from similar reasons as you experienced in the Midwest – closing or shifting employment centers, prejudice (despite the typical protest that racism is on the decline in the US!), public attitudes and unimaginative government buraeucracies.

Instead of looking solely for tenants to create cash-flow and profits, he offered the potential residents (mainly very low income minorities) the following:

1. A monthly rent without profit – simply to cover (fixed) mortgage costs and property taxes. Not too amazingly, many of the “slum tenants” could well afford the few hundred (usually $250 – 300/mo).

2. The tenant is responsible for making specific improvements and maintenance (mow the lawns, clean up the property, paint (he provides materials) etc.
He also provided initial frig/stove, made sure that furnaces, wiring and plumbing were up to standard, ound floors, basemennts etc. when he bought the houses.

3. Here’s the key: As an incentive, he permits the tenants (legally, in writing) to buy the improved property at the end of five years at a pre-set, fixed, cost if they have paid their monthly rent on time and complied with the conditions of maintenance.

In less than the first three years, all five of the houses are rented with many more people wishing to buy.
Unfortunately, he’s not rich and not able to buy another series of houses (he’s retired).

The results:

1. An upgraded and improved section of town with stable residents who were previously marginally or unemployed “slum residents.”

2. A stable neighborhood with a decrease of crime (dope, prostitution, etc.) with children in schools, not on the streets.

3. Previously unheard-of formation of a “community” with residents addressing and acting upon common problems rationally and responsibly..

All of this was done without a cent of federal or state government funding!

It is but one example from true life how the economic theory of “satisfycing” rather than maximizing can not only accomplish a necessary economic and social “good” but provide the owner with a very satisfying monthly income!

If enough people took this one example to heart, the process could be repeated from town to town, city to city.

A journey starts with a single step, as the Asian saying goes. Well, the first step has been taken!

It is now necesssary for individuals to see the practicality of the idea and to implement it in their neighborhood.

Perhaps some wealthier individuals might be interested in applying the “satisfycing” principle on a larger basis???

Unlike our cadidates, this does not require “talk” let alone incorrect or misleading promise, but it requires action and the basic goodwill of people that initially spawned the growth of the United States.

Interested?

My sentiments exactly!

And since you and I have such deep pockets we can bail-out anyone and everyone except ourselves. I don’t know about your pockets, but ours seem to shrink a little more each day.

I’m also in one of those Indiana cities hit by the downturn in the auto industry. People around here were worried enough about that, now they are worried about their bank accounts however meager they are.

Great blog you “amateurs” have here. I just found it through one of my Google Alerts. I’m now a subscriber!

Thank you!