When politicians try to control free market dynamics with central planning, the only outcome is an economic disaster. Many politicians do not grasp the critical component of local fiscalism and economic development - just around drawing a salary from their elected position.
During the quarantine period in 2020, politicians liberally ordered businesses to close not considering the impact of making such a decision. Many people working in service-related careers or ran service-related business models were immediately out of a job and income source. It is very important to understand the economy is driven primarily by services, not manufacturing. Politicians liberally shutting down businesses had a devastating ripple effect from families losing a source of income to creating homelessness and urban decay in 2020.
Another devastating decision made by politicians is the eviction moratorium. The eviction moratorium was implemented to prevent landlords from evicting tenants who cannot pay rent due to no fault on their own. We all remember in 2008, the huge number of displaced families sleeping in abandoned homes and out of their cars in big box stores parking lots due to mass evictions. However, politicians shutting down businesses contribute to people losing their income and not able to pay rent.
These two short-sighted central planning decisions by politicians, shutting down Main Street and imposing an eviction moratorium on Pine Street will create one type of outcome – the destruction of Black communities. If Black merchants disappear and Black landlords disappear, then Black people are going to find out real quick what marginalization look like and become a stranger in their own country.
The Problem: Withholding Rent and Non-Entrepreneurial
The Black community has two pre-existing conditions that will accelerate the destruction of their own community.
The first is the desire to spend on frivolous and non-essentials when they get a little money, using a false concept called “disposable income” – no African-American has disposable income and there is no such thing. We work very hard for the little money we got and that little money cannot compensate for the huge debts we have as a Black community currently in the hole due to structured inequality.
When the eviction moratorium kicked in, what we saw was a considerable amount of people not paying rent and instead spent the money on lotto tickets, buying get-rich seminars and programs they saw on Instagram. Now, we see people talking about buying Bitcoin, GameStop, and other investment schemes to hopefully make more money taking chances than support their foundational expenses. Landlords are reporting tenants haven’t paid their rent in months but when the landlord goes to the trash cash to do dumpster diving intelligence (evidence for eviction court) – see receipts and empty large screen TV boxes showing their tenants are spending money on a whole bunch of stuff instead of paying rent.
The second problem is commercial real estate that drives retail and service businesses in our communities. We are witnessing a disturbing trend in the Black community business sectors where our own people are walking into Black-owned businesses not wearing masks or caring about COVID-19, the ultimate litmus test of self-hate and no regard for others when the rubber meets the road. This activity turns off real legit customers and while most Black businesses appear successful, those businesses have to deal with dangerous and reckless customers who are likely spending less per transaction.
This goes back to a pathological problem in the Black community, the lack of respect for true entrepreneurial and ventures led by Black people. You and I see this all the time, garbage media like Black Enterprise or your fake friends want to prop up a third-party “inspiration story” or great “rags to riches Black millionaire” narrative. But there is no true focus on creating sustainable local fiscalism as a system within the Black community. There are no narratives on creating a true merchant class and job-creating ventures – Blacks folks are just looking for inspirational clickbait content online about Black businesses.
Let’s look at who is being impacted. Most landlords are retirees or generational real-estate owners in our Black community. Same with commercial businesses, these are likely professionals who quit their job after 10 years and decide to start their own business and serve their community with a sense of purpose. Both politicians and the apathy reckless culture of the Black community has shown their true colors of these critical components that is the backbone of the Black community. Politicians shut down these businesses and then tell tenants they don’t have to pay rent to landlords for an indefinite period of time that keeps being extended.
The Fallout: Corporate Landlords
The Black community is totally unaware of how serious this current predicament is. If Black landlords get out of the game and Black merchants get out of the game, then who will replace them? We already see a pattern in the United Kingdom on what is happening.
In London and Birmingham and other cities like Liverpool and more, we are seeing the governments focusing more on squeezing out small landlords in favor of corporate landlords. Corporate property owners have a bigger liability shield and have the ability to issue bonds and raise cash and pay more to follow regulations. We are quietly seeing this pattern manifesting here in America, especially with the emergence of proptech or property technology innovation.
Corporate landlords will have stricter eligibility criteria such as credit score and rental history or requiring bigger down payments. Corporate landlords will have an automatic rental increase without negotiation with the tenant. What will eventually happen is the Black community is going to see young, non-Black hipsters and millennials with parents’ money start moving in and driving their e-bikes around and walking their little dogs who can afford 1800-2100/month in rent.
As gentrification goes, when those gentrifiers come in paying that much in rent, the cops tend to take the area more seriously. You know why? The majority of property tax – almost 80% goes towards pensions for police officers. Then we going to hear about police arriving because of complaints Black folks are playing loud music, Black folks are gathering at an empty lot hosting an illegal BBQ from an anonymous gentrifier living in a corporate rental apartment complex nearby.
The Price: Marginalization
We are looking at a situation where the pandemic lockdown will accelerate the destruction of the Black community. Black folks are not taking seriously their landlords and that they need that Black landlord to keep their lifestyle intact. Black folks are not taking seriously their commercial district and patronage in a way that is safe and supportive and realize they will have few places to shop. Then just like a slow-moving disease, it quietly drops a few signs then one day, it drops hard, fast, and painful.
Black landlords will quietly sell their buildings to corporations. Corporate rentals will be automated with online payments and credit checks and computerized late payments and eviction filings. The commercial zones will be replaced with bagel shops and other hipster stuff and they won’t hire from the community either. Then we going to see on the news Black folks crying about having to move somewhere else because the rent is too high or the property taxes are too high, acting brand new.
This is where the Black community is headed in 2021 – if Black folks don’t save their landlords, the Black community cannot be saved and there is no other scenario or outlook. If Black folks don’t save their commercial districts, those spots in the hood will become data server hosting warehouses and gig economy job hubs where they hire cheap labor folks from outside the community.
What Can Be Done About This?
This is a real situation that is happening in real-time and things are just being deferred. Here is what needs to be done. If a person cannot afford to pay their landlord, they need to move out instead of playing eviction moratorium games. If it is discovered someone sat in an apartment complex hiding behind the eviction moratorium to delay months of rent payments, that person will lose all credibility and will not get any favorable treatment by any future landlord. That person needs to move out and let that landlord find a tenant who can pay the rent. It is better for that person to move before the eviction moratorium expires as well.
The second thing and most important – acquire leases or acquire commercial buildings in the community before someone else does. You can use commercial buildings in the Black community as pop-up shop rentals, distribution hubs, service centers, data hosting centers, and shared office spaces. The whole community should get together as a cooperative and lease the building out for a year, one person pays one month or two people out of their group pay for the one month and rotate – keep those buildings in your hands.
2021 is an adversity year – hard decisions and smart decisions and survival decisions and sustainable decisions are the only options on the table. We looking at corporations getting richer while those at the middle and bottom are struggling and don’t know what’s next. You want to or better feel you need to do whatever it takes to protect the culture of small landlords who maintain the community and protect your commercial zones as well by supporting existing merchants and capturing unused space for future opportunities.