Extra: Car Colors & Storage Units | Freakonomics Radio

Presenting two stories from "The Economics of Everyday Things": Why does it seem like every car is black, white, or gray these days? And: How self-storage took over America. FOLLOW FREAKONOMICS RADIO: YouTube: https://freak.ws/3yIl6dl Apple Podcasts: https://freak.ws/3yAvQh0 Spotify: https://freak.ws/3TsdCmV ABOUT FREAKONOMICS RADIO: Discover the hidden side of everything with host Stephen J. Dubner, co-author of the Freakonomics books. Each week, Dubner speaks with Nobel laureates and provocateurs, intellectuals and entrepreneurs, and various other underachievers to uncover things you always thought you knew (but didn’t) and things you never thought you wanted to know (but do) — from the economics of sleep to the future of education, from markets for marriage to the surprising utility of wolves. ABOUT THE FREAKONOMICS RADIO NETWORK: Freakonomics began as a book, which led to a blog, a documentary film, more books, a pair of pants, and in 2010, a podcast called Freakonomics Radio. Hosted by Stephen J. Dubner, it’s one of the most popular podcasts in the world, with a reputation for storytelling that is both rigorous and entertaining. Its archive of more than 500 episodes is available, for free, on any podcast app, and the show airs weekly on NPR stations. Freakonomics Radio is now the flagship show of the Freakonomics Radio Network, which includes the podcasts No Stupid Questions, People I (Mostly) Admire, and The Economics of Everyday Things. FREAKONOMICS RADIO NETWORK PODCASTS: Freakonomics Radio: https://freakonomics.com/series/freakonomics-radio/ No Stupid Questions: https://freakonomics.com/series/nsq/ People I (Mostly) Admire: https://freakonomics.com/series/people-i-mostly-admire/ The Economics of Everyday Things: https://freakonomics.com/series/everyday-things/ Special series: https://freakonomics.com/topics/ CONNECT WITH US: [email protected] https://twitter.com/freakonomics https://www.instagram.com/freakonomics/ https://www.facebook.com/freakonomics/ https://www.tiktok.com/@freakonomicsradio https://www.linkedin.com/company/freakonomics-media Subscribe to our newsletter: http://eepurl.com/bKm0cf

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:04Stephen J. Dubner?

  Hey there. It's Stephen Dubner, and this is a bonus episode, actually, a pair of episodes from The Economics of Everyday Things, another show that we make here at the Freakonomics Radio Network. The host of this show is Zachary Crockett, a journalist who loves to explore and explain, well, the economics of everyday things. For instance, car colors and storage units. I am hoping that after you hear these episodes, you will start listening every week to The Economics of Everyday Things, which you can find on any podcast app. Here's Zachary.

• 0:43Speaker 01

  Like a lot of men his age, my dad likes to talk about how everything used to be better. Shoes used to last longer. Musicians used to be more talented. Movies used to cost a couple bucks. And cars?

• 1:00Speaker 01

  They just had a lot more character.

• 1:03Speaker 02

  My first car was a 1965 Chevy Impala. And this was a real car. It was a real car I bought from a neighbor. It had 25,000 miles on it, and I paid $400 for it. I mean, the personality that it had. Every detail about it. The headlights, the taillights, the fender, the bumper, the doors. You could punch the '65 Chevy, and you'd break your hand.

• 1:44Speaker 01

  As Tom Crockett tells it, a big part of that character was the multitude of colors that you'd see on the road back in the 1960s and 70s.

• 1:53Speaker 02

  In the old days, we had variations of green and variations of brown, tan colors. There were light blues, lots of different shades of blues. My Uncle Guy had like a canary-yellow Cadillac. He'd drive it with the top down.

• 2:11Speaker 01

  But these days, he says, it seems like all the cars on the road look the same. Black, white, silver, black, white, silver, black, white. There is some truth to that. Today's cars are a lot less colorful than they used to be. Eighty percent of vehicles sold in North America are now what's called achromatic, white, black, gray, or silver. That's up from just 36% 50 years ago. Now, if you're like my dad, you might say that the automobile industry has lost its flair. But according to car color designers, there are more color options than ever before.

• 2:51Speaker 01

  It's just that those mundane tones are what today's young buyers actually want.

• 2:59Speaker 03

  We know that boomers and Gen X are definitely looking for some of those pops of color. So they're more interested in like the tangerine orange. And we found that millennials are gravitating to gray.

• 3:13Speaker 01

  For the Freakonomics Radio Network, this is The Economics of Everyday Things. I'm Zachary Kracke. Today, car colors.

• 3:22Speaker 01

  For the earliest mass-produced cars, paint was more of a practicality than a form of expression. Throughout most of the 1920s, Henry Ford's famous Model T only came in one color. Ford was rumored to have said that a customer may have a car in any color he desires, so long as it is black. Ford's affinity for the color was rooted in economics. Black paint was cheap and durable, and using only one color sped up production.

• 3:54Speaker 01

  As cars became more common, consumers wanted theirs to stand out. Automakers responded with different color options. In the 1930s, the first metallic finishes hit the market. They were made out of fish scales, and it took 20,000 herring to make a pound of paint. In the 1950s, you could find cars in pink and turquoise. The 60s and 70s were populated with yellow and green muscle cars. And by the 1980s, vehicles came in just about any color you could dream up.

• 4:26Speaker 04

  The 80s was a very colorful decade. There was a lot of green cars, red cars, blue cars.

• 4:33Speaker 01

  That's Marc Gutjar. He's the global head of design at BASF, one of the largest car paint manufacturers in the world.

• 4:42Speaker 04

  And achromatics, the colors that are black, gray and white and silver, they were not so dominant.

• 4:49Speaker 01

  But Gutjar says that around the beginning of the millennium, car colors became a lot less colorful. Silver quickly became the color of choice, largely thanks to emerging technologies.

• 5:02Speaker 04

  You know, mobile phones were silver. Your stereo was silver with a lot of buttons and things to turn. And then this famous American company came in and invented a tool and the product was white.

• 5:16Speaker 01

  That famous company was Apple. And the device, of course, was the iPod. It came out in 2001, around the same time the company opened its first retail locations.

• 5:27Speaker 04

  White was the transporting color of being advanced, high-tech, forward-thinking. The color took over in rapid speed. And it's still number one globally.

• 5:40Speaker 01

  Today, 34% of all cars in North America are white. After that comes black with 22%, silver with 14%, and gray with 10%. No other color cracks double digits. Now, there are practical reasons to buy a white car. Lighter colors reflect more sunlight, which reduces the need for AC, increasing fuel economy and decreasing carbon dioxide emissions. But the main reason people buy achromatic cars is that they're just sort of inoffensive.

• 6:14Speaker 04

  We did some research on, you know, new car buyers, like what they were looking for and what people like personally as a color actually has nothing to do with what they buy.

• 6:26Speaker 01

  There are a few possible explanations for this. For starters, cars are often shared within a family, and achromatic colors make good compromise picks. Dealerships also tend to stock more white, black and gray cars because they're easier to sell than a niche choice like turquoise. If a customer comes in looking for a color that's not in stock, a salesperson can often convince them to buy the gray model on the floor instead.

• 6:54Speaker 04

  Gray colors please a lot of people. That's why they're so successful. We have around 120 different shades of gray. 50 shades is not enough.

• 7:06Speaker 01

  Whether you have a gray car or a pink car, it's likely that BASF was involved in the color. More than 50% of all cars produced globally each year have at least one layer of BASF paint.

• 7:20Speaker 04

  We work with nearly everybody in the industry to develop colors every year. It's roughly 900 colors that are currently running in the market.

• 7:30Speaker 01

  Every major car manufacturer also has its own in-house design team. And when a brand wants to develop a new color, the conversation usually starts with someone like Nikki Rydel.

• 7:42Speaker 03

  I'm a car line planning manager at Subaru of America.

• 7:46Speaker 01

  Rydel's job is to help oversee all of the little design choices that go into creating a new Subaru model, from the color of the stitching on the seats to the color of the exterior paint. The first thing Subaru's team does is look at what's popular in the spaces where their customers are interacting.

• 8:04Speaker 03

  We're really lucky at Subaru because we know our customer really well. Definitely people who want to take the path less followed. They're always looking for their next adventure. So we're looking at snowboards. We're looking at skis. We're looking at skate decks. We're looking at all of the clothing, like ski jackets and that sort of thing.

• 8:24Speaker 01

  A few years ago, they noticed a trend.

• 8:28Speaker 03

  We started seeing everything kind of shifting toward cooler tones. And so we developed Cool Gray Khaki.

• 8:37Speaker 01

  Over the past couple of years, you've probably noticed cars in this color. It's a light gray with a bluish tone, and it's got kind of a ceramic look to it. No sparkle. Cool Gray Khaki is Subaru's invention. But many manufacturers, from BMW to Honda, have introduced very similar shades.

• 8:57Speaker 03

  Cool Gray Khaki is a cooler muted tone. It has a very flat finish, so it doesn't have a lot of metallic or pearl in it, which also suggests a rugged aesthetic and a more modern, younger look. When we all saw it, we just kind of knew it was a hit.

• 9:16Speaker 01

  Before a color like cool gray khaki is finalized, it's tested in a light studio that simulates different settings.

• 9:24Speaker 03

  Light is really important, especially when you're talking about a vehicle. The sunlight that you see in Southern California is going to be very different from Maine. The other consideration is that these cars will be seen in showrooms. So one of the settings that we have that we check are what our retailers are using for overhead lighting in the showroom. Make sure that that also looks as good as we want it to.

• 9:48Speaker 01

  They also have to make sure the paint formula can hold up in different environments. Many car manufacturers send painted car parts to weathering facilities in Florida, where they're put out in the sun to see how the paint is affected. Florida has high intensity sunlight, lots of rain, and high humidity, which makes it an ideal place to test for cracking, peeling, and moisture sensitivity. Once a color has passed all the tests, manufacturers work with paint suppliers like BASF to produce the color at scale. Again, Mark Gutjar.

• 10:23Speaker 04

  So what they get from us is like a mixed material with all the ingredients that are in?

• 10:30Speaker 01

  Even a seemingly plain color, like white or gray, is a lot more dimensional than it seems. When a car is painted at a factory, the process begins with something called an e-coat. The car parts are often dipped in a bath of zinc phosphate, and an electrical current binds a layer of resin to the surface. The parts spend time in an oven, and then robots spray them with primer and a base coat that includes all kinds of effects.

• 10:58Speaker 04

  So you have this glitter sparkles that you could put in, like, you know, very different textures, very soft silky textures you can generate.

• 11:07Speaker 01

  The final step is typically a clear coat that gives an extra glossiness to the finish, but also protects the paint from UV lights and burp poop.

• 11:17Speaker 04

  All the layers together, they make a thickness of a hair. So it's extremely thin and it's extremely technical.

• 11:26Speaker 01

  From conception to production, bringing a new color like Cool Gray Khaki to the market can take up to six years. So in 2024, Subaru's team might be working on the new colors for the 2030 lineup. And even after all that work, Rydel says that there are still slight variations in the final product of any given color.

• 11:48Speaker 03

  Every time you formulate the color, it's not going to be 100% exact. They're virtually imperceivable, but if you put, you know, one body panel next to another, there's a chance that you could see the difference. So the way that they're spraying our white in Japan could look slightly different from what we're spraying in the US factory.

• 12:08Speaker 01

  So will every hit new color be another variant of gray? Probably not. Some industry experts are predicting a more vibrant future. That's coming up.

• 12:23Speaker 01

  Car manufacturers like to keep their offerings fresh and trendy. So most new car colors only have a lifespan of three to four years, even when people love them. During its run from 2018 to 2023, Subaru's Cool Gray Khaki accounted for around 18% of sales for the models that were available in the color. If you go to Subaru forums, you'll still find customers singing its praises. But in the end, it was phased out to make room for its successor, an earthy shade called Alpine Green. Nikki Rydel says Subaru fans are a little more open to bold colors than the typical car buyer.

• 13:05Speaker 03

  We're able to sell bright blues and greens and orange colors. We're lucky because we have always been kind of that quirky, fun car. So we kind of lean into that and make sure that we're offering really fun colors as much as we can.

• 13:20Speaker 01

  Take, for instance, a color called Geyser Blue, which debuted on some of Subaru's 2022 models.

• 13:27Speaker 03

  We took blue and mixed a little bit of green into it. Green is not usually a great seller for cars, but Subaru does it really well. And then we took all of the metallic flake out. So that kind of psychologically signifies that it's more of a rugged off-road color. It's beating out black, white, gray, and that's pretty tough to do. Yeah.

• 13:52Speaker 01

  Cars are an expensive product, and color has a big impact on sales. So car companies like Subaru have to make sure they produce the right amount of models in each color.

• 14:04Speaker 03

  We don't want to have too many colors in the lineup. We have to make sure that we've got just enough choice so that our owners can kind of pick what they want and personalize their car, but not so many options that we can't get the car to the right place, to the right customer.

• 14:19Speaker 01

  Subaru keeps a close eye on data from dealerships. If they see demand for a particular shade slowing down, they adjust accordingly on the factory lines. And dealerships tend to keep reliable colors like white, gray, and black on hand.

• 14:35Speaker 03

  It's a lot easier to convince somebody to buy a white car than it is a bright orange car.

• 14:40Speaker 01

  Some colors tend to sell better in certain regions.

• 14:44Speaker 03

  The sunbelt area, so the southern part of the country, is going to sell more white cars than they would black cars, just because of the heat. So we would probably allocate maybe more white cars down there.

• 14:57Speaker 01

  Rydel says there are also some generational differences in who buys certain car colors.

• 15:03Speaker 03

  We know that boomers and Gen X are definitely looking for some of those pops of colors. So they're more interested in the tangerine orange, the bright oranges. And we found that millennials are gravitating to colors that are closer to like the cool gray khaki. They're always attracted to more muted colors compared to other generations.

• 15:24Speaker 01

  But even millennials are starting to come around to more colorful cars.

• 15:29Speaker 03

  I think we've maybe bottomed out on minimalism. And I think people are starting to look for character now and personalization.

• 15:37Speaker 01

  Some research has suggested that there's a correlation between car colors and how the economy is doing. Somber tones like gray and black rise during times of hardship. And when things are looking up, brighter colors tend to reemerge. At BASF, Mark Guchar has noticed a slight shift away from the dominant achromatic colors.

• 15:59Speaker 04

  What we see is a huge diversity in colors. So there's more and more color shades coming in. The last year's production showed in every region of the world, purple, violet colors. And that was something really not there for a long, long time.

• 16:14Speaker 01

  Nearly every car brand on the market has experimented with an adventurous color or two in recent years. Fiat Chrysler offered the Jeep Wrangler in what they call Snazberry, kind of a reddish maroon. Toyota released a forerunner SUV in an extremely vivid voodoo blue. BMW had Sao Paulo yellow, which looks like a highlighter. Colors like this can raise the price of a new car.

• 16:42Speaker 03

  There are different pigments, and pigments vary in cost. There's also the application process. If it's a single coat, dual coat, or a tri coat, there's all different effects. So we call a metallic, a pearl, or a silica finish. Every time you add another layer of paint, you're adding time to the line.

• 17:01Speaker 01

  These bolder colors may cost more, but they could also pay you back in the long run. The vehicle search engine iSeeCars analyzed pricing data on more than a million used cars and found that color has a surprisingly strong impact on resale value. The colors that retain the most value? Yellow, orange, and green. But at least for now, most car buyers still spring for the less exhilarating hues. And a few years ago, when he found himself in the market for a new car, even my dad, Tom Crockett, joined the club.

• 17:39Speaker 02

  I bought a used 2014 Subaru Impreza.

• 17:44Speaker 01

  What color did you get?

• 17:45Speaker 02

  I bought a white car because it was the only used car on the lot.

• 17:54Speaker 02

  Believe it or not, I actually like the color white. The only problem is, you know, now when I go out and look for my car, I have to sort through multiple white cars to make sure that I'm getting in the right car.

• 18:17Speaker 01

  Hey, it's Zachary here. Thanks for checking out these episodes of The Economics of Everyday Things. Let us know what you thought of our look at car colors. We're at [email protected]. And you can find more of our weekly show in your podcast app. All right, here's our second episode on a kind of business that's been springing up like crabgrass all over the country.

• 18:44Speaker 01

  When Cara Koloji went through a breakup six years ago, she had to move out and get a place of her own. The new place was smaller, so small that she didn't have room for all of her stuff. And she didn't want to get rid of it. So she decided to rent a storage unit.

• 19:01Speaker 05

  Mainly, things I stored were books, kitchenware. I have a lot of clothes and gear, you could say. So winter clothes, or summer clothes, or snowboards. As people in my family started moving out of their homes, I started inheriting a lot of knickknacks, heirlooms, which I just didn't have room for.

• 19:25Speaker 01

  Koloji isn't alone in her quest for more space. It's estimated that 1 in 5 Americans rents a storage unit. High housing costs, urbanization, and rampant consumerism have made self-storage into an estimated $45 billion industry in the US alone. And real estate investors are clamoring for a piece of the action.

• 19:54Speaker 06

  Self-storage has become sexy because people have recognized what a strong fundamental business it is. Americans love their stuff and they don't want to get rid of it.

• 20:05Speaker 01

  In the second part of this special episode of The Economics of Everyday Things, Storage Units.

• 20:14Speaker 01

  The modern self-storage industry traces its roots back to the 1960s. The earliest facilities were more about investing in land than building a viable business.

• 20:25Speaker 06

  It began with folks who have good vision, and they imagined where population was going.

• 20:31Speaker 01

  That's Anne-Marie DeCosta. She's a consultant who's been in the self-storage industry for 22 years.

• 20:38Speaker 06

  They tended to buy land outside of city centers, anticipating that the population would move there. And in the meantime, they put a self-storage facility on it so that they could generate cash.

• 20:50Speaker 01

  For these early entrepreneurs, storage units were what's called a covered land play. You buy some cheap land not too far from a growing population center and wait until there's enough people nearby to build a hotel or a shopping mall. In the meantime, you need to cover taxes. So you set up a business that's cheap to operate and brings in a little cash, like a storage facility. But a funny thing happened.

• 21:16Speaker 06

  Investors realized that self-storage is among the highest and best uses. So instead of selling those, they kept them.

• 21:27Speaker 01

  Today, there are around 52,000 storage facilities in the United States, more than 20 million individual units. About 2/3 of those facilities are owned by small to midsize operators. The rest of the market is controlled by a handful of large national corporations like Public Storage, U-Haul, Cube Smart, and Extra Space Storage.

• 21:51Speaker 07

  My name is Zach Tikkens, and I am the Chief Investment Officer with Extra Space Storage.

• 21:57Speaker 01

  Tikkens has been with Extra Space Storage for more than two decades. During his time there, he's watched the company grow into one of the largest self-storage operators in the world.

• 22:07Speaker 07

  We're around 283 million leasable square feet today, and 2.6 million units.

• 22:14Speaker 01

  Those units vary in size. On the lower end, some are just 25 square feet. Those are generally good for someone like a college student. They hold a twin mattress, a dresser, and maybe a few boxes. On the bigger end, you've got units that are around the size of a two-car garage, and it goes up from there. The monthly rental on a unit varies based on size, location, and how fancy it is. Some are climate-controlled, others get hot in the summer and cold in the winter.

• 22:44Speaker 07

  The average unit price today is somewhere around $180 a month per unit. And that's probably on a unit that's a little bit bigger than a 10 by 10 unit, or 100 square feet.

• 22:57Speaker 01

  For the facility owner, most of that rent is profit. Operators have to pay for things like property tax, insurance and utilities. And many facilities have a manager on-site during business hours. But as far as real estate goes, storage is a pretty low-maintenance business.

• 23:14Speaker 07

  If you looked at residential, when somebody vacates a property, you have to go through a process of doing a lot of tenant improvements. Whereas on the storage side of it, you simply roll up the door, they take their belongings and we sweep out the unit and it's ready to rent for the next person.

• 23:31Speaker 01

  It's also a business in constant demand. Around nine out of every 10 units tend to be occupied at any given time. And tenants are easy to replace when they vacate.

• 23:43Speaker 07

  If you are in a retail space and you have an anchor tenant go out of business, like a Bed Bath & Beyond or some of those that have had issues, it changes your economics dramatically. Whereas if you lose one or two storage customers, it's a small loss to the property and we can quickly replenish that with another customer.

• 24:05Speaker 01

  Most self-storage units are offered on month-to-month leases. Dickens says that most people think they'll only have to use a unit for a couple of months, but they'll actually end up staying much longer.

• 24:16Speaker 07

  They typically stick around 14 to 16 months on average.

• 24:20Speaker 01

  A move into a storage unit often revolves around some kind of major life event. Self-storage consultant Anne-Marie DeCosta says it could be a college student graduating, a military officer being deployed, or a family moving into a new home.

• 24:36Speaker 06

  People need storage when they're in transition. When life events happen like having babies or maybe their parents are growing elderly and they need to move in with you. When divorce happens, often there's a period of uncertainty in transition. When people move, they need storage. They're going to sell their home, they have to get the clutter out so they rent storage.

• 24:58Speaker 01

  But another large chunk of the customer base is people who simply don't have room to store all of their stuff.

• 25:05Speaker 07

  We find a lot of use between people that are renting because they don't have a lot of space within their apartments. And, you know, we're like an extension of their apartments, where they can store their holiday belongings, their decorations and all that.

• 25:20Speaker 06

  This is especially true of millennials, who now make up the largest share of storage renters in America. Baby boomers, they tend to store memories. They store grandma's living room furniture or china. They don't visit that stored property very often. But millennials and Gen Z, they tend to use self-storage as an extension of their home. They leave in the morning, they get their kayak, they go kayaking, they come back late in the day and they put it back in the storage unit because they don't have any place else to store it.

• 25:55Speaker 01

  With the rising cost of housing, many renters are downsizing. Across the nation, the size of new apartments in urban centers is also decreasing, partly because developers are building more studio apartments. At the same time, Americans are buying more stuff than ever before.

• 26:15Speaker 06

  It's the American love affair with their stuff that creates the demand for self-storage. We are a wealthy country with a lot of things and we want to keep them.

• 26:24Speaker 01

  So what exactly are all of these things that people are storing in their units? And what happens when they stop paying rent? That's coming up.

• 26:37Speaker 01

  During his time at Extra Space Storage, Zach Dickens has seen people use storage units for all kinds of things.

• 26:45Speaker 07

  You see a lot of couches, that sort of thing. We have musicians that have to store their equipment in a temperature-regulated environment. People with vehicles that want to preserve those vehicles, people with heirlooms that don't want to store them at home, small businesses that want to store excess product. Pharmaceutical reps use us because they're not allowed to store their medicines on their own property at home, and so they'll use us as a secure alternative there.

• 27:12Speaker 01

  Tenants are almost always required to get insurance on their unit, and they're generally prohibited from storing more than $5,000 worth of stuff. What you put in there, though, is entirely your business. That is, until you stop paying for it. In that case, your stuff goes to the highest bidder.

• 27:34Speaker 01

  In most states, when a customer is late on rent, storage operators are required to send out multiple notices over the course of 30 or 60 days. When the notices go unanswered, the unit's contents are seized and auctioned off. Reality TV shows like Storage Wars and Auction Hunters often make it seem like storage units full of hidden treasures are abandoned on a regular basis. Anne Marie DeCosta, the storage industry consultant, says the truth is a little less glamorous.

• 28:06Speaker 06

  It is very, very rare that a foreclosure sale at auction generates enough money even to cover the rent due. Because for the most part, people store memories. You know, your children's schoolwork and your grandmother's dresser and clothing, furniture, household goods. And those are not things that sell high in a public auction where the consumer is determining the value of it.

• 28:35Speaker 01

  That's not to say there isn't the occasional crazy find. In 1989, a contractor in Long Island paid $100 for a unit and found a futuristic car used in the James Bond film The Spy Who Loved Me. He later sold it at auction for just under $1 million. The winning bidder was Elon Musk. DeCosta has a few tales of her own.

• 28:58Speaker 06

  We had a whole unit of coffins that needed to be auctioned off because the business had gone out of business. So the owner-operator contacted mortuaries. And then, you know, five or 10 of them bid.

• 29:10Speaker 01

  That doesn't mean the storage facility operator got a windfall.

• 29:15Speaker 06

  Any proceeds from an auction that are in excess of the rent owed are returned to the renter. And many times, the renter can't be found. They moved, they died, they are in jail. Typically, if money's not claimed, it reverts to the state or the county.

• 29:34Speaker 01

  Other items don't have any monetary value, but still require legwork from the storage operator, like an urn full of cremated human remains.

• 29:44Speaker 06

  Those are the cremains of a loved one who maybe died 40 or 50 years ago. And they were very well cared for for 10 years, 20 years, 30 years. And then there's this dilemma, you know, what do you do with them? And many, many operators will call one church and cemetery after another to find a place where they can bring the cremains.

• 30:05Speaker 01

  The relative secrecy of storage units sometimes leads to more morbid finds. A unit in Colorado contained a pile of police evidence, including a bloody rope and an axe. The buyer of a Seattle unit discovered the bodies of a woman and her two sons, who had been missing for 12 years. There have been units that contained meth labs, boxes full of stolen passports, and illegal firearms. But stories like this are pretty rare. Industry experts say that only around 1 to 3% of storage units are auctioned off in any given year. And every state has laws that require plenty of notice before an operator can sell someone's stuff.

• 30:47Speaker 06

  No one goes into self-storage to sell renters' belongings. They go into self-storage to rent space. And when a renter is not paying rent, what they really want is to be able to rent to someone who will.

• 31:01Speaker 01

  And there's usually a new tenant waiting in the wings. Because storage is a business that bucks economic trends.

• 31:12Speaker 06

  When things are good and people are buying more things, self-storage does very well. But when things are not as good and people are hurting, storage does well under those circumstances, too, because that's when people have to combine households, or they have to move into smaller living quarters. So one of the great dynamics of the industry for an investor or an owner operator is that regardless of the business cycle, self-storage tends to do well.

• 31:39Speaker 01

  Most storage facilities are still owned by small-time operators. But in recent years, the industry has followed the path of nursing homes, mobile home parks, and car washes. Institutional investors have been consolidating smaller businesses in a bid to gain market share. And that has led to expansion. In 2023, operators built 49 million square feet of new storage space, nearly 16% more than they built the year before. In some high-growth cities, storage units have been popping up so fast that legislators have enacted moratoriums temporarily banning new construction. The industry has been fighting back.

• 32:22Speaker 06

  I think it's short-sighted to try to prevent self-storage development. It's a great way to use space that's not otherwise used. You know, the triangular-shaped piece of land that has a funeral home on one side and a 55-plus community on the other side and a retail business on the third side, that's a great opportunity for self-storage because they don't have to be a specific size or shape.

• 32:49Speaker 01

  Storage units may be a symptom of overconsumption, high housing costs, and shrinking apartments. But for tenants like Karakalogi, they're a home away from home, a place to put all of the things we don't really use but can't seem to part with.

• 33:05Speaker 05

  You're not getting a house, you know, and even if you are, you're sharing living space with another person. At least 50% of my friends have storage space. If you want to keep stuff, you're going to have to put it in storage, whether it be for two years, five years, or longer, which isn't a bad way to be because you can really get down to the core of what is super important to you in the long term.

• 33:34Speaker 01

  For the Economics of Everyday Things, I'm Zachary Crockett.

• 33:41Stephen J. Dubner?

  And I am Stephen Dubner. I hope you like The Economics of Everyday Things as much as I do. Please go to your podcast app and start following it. There's a new episode every week. And if you have an idea for Zachary, send an email to [email protected]. And we can always be reached at [email protected]. And we'll be back very soon with a regular episode of Freakonomics Radio.

• 34:11Stephen J. Dubner?

  Freakonomics Radio and The Economics of Everyday Things are produced by Stitcher and Renbud Radio. This episode was produced by Sarah Lilly and Zachary Crockett, with help from Daniel Moritz Rabson and Julie Kanfer. Our staff also includes Alina Coleman, Augusta Chapman, Dalvin Abouaji, Eleanor Osborne, Elsa Hernandez, Gabriel Roth, Greg Rippon, Jasmine Klinger, Jeremy Johnston, Lyric Bowditch, Morgan Levy, Neil Carruth, Rebecca Lee Douglas, and Zach Lipinski. If you'd ever like to read a transcript for one of our shows or sign up for our newsletter, all of that is at Freakonomics.com. As always, thanks for listening.

• 34:50Speaker 01

  I bet that operator is pleased to find that those coffins are empty.

• 34:54Speaker 06

  Yes, very much so. You don't want to find one that isn't, that's for sure.

• 35:02Speaker 08

  The Freakonomics Radio Network, the hidden side of everything.

• 35:10Speaker 03

  Stitcher.