Is the Self-Storage Industry Predatory?

I'm just asking questions.

I'm also pissed off, because I rented a self-storage unit when we moved three months ago.  Then I got a notification that the self-storage facility would be increasing my monthly rental fee by 100%.  Yup.  100%.  I called and left a message just saying that I got the notification and wanted to discuss.  They called back and offered to increase my monthly rental fee by only 50%.  I said, well, if we're just making up numbers here, I will offer you to pay you 50% of what I currently pay, and I will stay in your facility for six months.  Otherwise, I'm giving you my thirty-days' notice.  It was no surprise to learn that I had absolutely no bargaining power.

Image by Hankwang - Own work, CC BY-SA 3.0, 

So now I have to find space in our new house for the stuff in storage.  After twenty-plus years in the academy, I am financially comfortable.  I have options.   Which made me wonder whether the business is structured to take advantage of those who don't.  A quick search turned up Gaby Del Valle's 2018 article from The Outline.  According to Wikipedia, one in ten American households was using self-storage as of 2005. Ms. Del Valle's column suggests it was about the same over a decade later.  

Ms. Del Valle's story is a common one.  She moved in with her boyfriend to save money and put some stuff in storage.  The advertised price was somewhere around $20/month, but when you added fees and insurance, it was double that.  Already the story has the ring of familiarity to it.  My self-storage facility wanted to charge me for a lock and for insurance.  The price they wanted to charge for a lock was absurd, so I brought my own lock.  They refunded my money for the lock, but mine was the only private lock I saw in the facility.  After an initial investment, the lock charge is pure profit, as the locks are sturdy and pretty unlikely to go missing.  

And then there's the insurance.  I have homeowner's insurance that covered my storage facility.  Most people probably do, but you have to be willing to do the research, which I was.  And so I knocked another made-up number off of my monthly rent for my unit.  When my facility quoted me a new number for my monthly bill, they didn't even notice that I don't pay insurance.  That's the level of care they devote to finding just the right price for each customer.  

Ms. Del Valle had a good reason to store things.  The things she stored were not valuable, but they had value to her -- high school yearbooks, a build-a-bear, seasonal clothes she would not need now, but could in a few months.   But there was also junk, and she just couldn't face sorting through her stuff and making choices. She ended up using the storage for 2 1/2 years and spending over $2000 on the unit.  

Image by Hankwang, CC BY-SA 3.0 via Wikimedia Commons

When we moved, we put some of our daughter's things in storage.  She has graduated from college now, and she hasn't lived with us for four years, but we retain a room for her occasional visits, and it serves as a shrine to our time together as a family.  The shrine is a rotating exhibit.  We have more artifacts from her childhood than we can display.  You get the idea.  These are precious mementos for her and us, but they take up space.  

As of Ms. Del Valle's writing, self-storage was a $38 billion business, with the average unit going for $87.15, a number suspiciously close to what my self-storage unit proposed charging me when our negotiations broke down.   And I rented the smallest possible unit.

Although my first instinct was to credit my ability to get my stuff out of storage after three months to my relative affluence compared with Ms. Del Valle.  But the difference may be constitutional.  Ms. Del Valle cites Derek Naylor, former president of Storage Marketing Solutions, who told The New York Times in 2009, that “Human laziness has always been a big friend of self-storage operators.” People don't want to sort through their stuff, and so once they're in, they'll leave their stuff in storage forever, if they can afford it.  That's not me, at least not when a sudden 100% price increase alerts me to the fact that I am being swindled.

By Downtowngal - Own work, CC BY-SA 3.0

Ms. Del Valle concludes that "Big Storage" is only semi-predatory.  It preys not on poverty but on precarity.  Its' a valuable insight, well expressed.  The industry models its business on the "four Ds," although there is some dispute about which Ds are relevant.  Take your pick: Death, Divorce, Dislocation, Disaster, population Density, Downsizing (that's us!).  Don't get me wrong.  There's nothing wrong with an industry that helps people store their property while they are dealing with some combination of the four Ds.  There is something wrong with a industry that is structured as a bait and switch, with people's earthly possessions used as bargaining chips.  Ms. Del Valle points out that gyms also profit from people who pay their monthly fees but rarely use the facility.  The difference is that gyms won't sell or junk your cherished possessions if you cancel your membership.  

Ms Del Valle's experience was both better and worse than mine.  The company she dealt with never increased her monthly rate, so that's better.  She had set up autopay on her credit card.  That eased the pain of paying $41/month to store things that she, by this point, clearly did not need in her life.  The only reason she got out of the contract was that she lost her credit card, and so the company stopped getting paid.  They then threatened to auction her stuff.  But she had tried to get out of her contract previously, and she could not reach anybody at the facility.  That's worse.  My unit is very responsive, and they have people out front during regular business hours.

Ms. Del Valle's reporting also includes horror stories made possible through contracts of adhesion.  Apparently, some storage facilities place upper limits on the value of goods you can store there.  If you exceed that limit and then stop paying, they will sell your things and keep the difference to the extent that the proceeds exceed the upper limit, which is quite low.  They put indemnification provisions in their contracts so that if you or a friend are injured at their facility, you will cover any damages they incur.  

My takeaway is that the industry is regulated, but not closely enough.  I would offer the following statutory fixes:

• Advertised rates must include all fees, including insurance
• Introductory rates must state in advance how long they last and set a ceiling for increases
• After the end of the introductory rate, further price increases shall occur no more frequently than every six months

I'm not sure how I feel about a maximum value for stored stuff.  Given the insurance fees they collect, the provision seems like a swindle.  I would think that the solution would be to link insurance costs to the stated value of the contents of the unit.  I am also unsure how to address Ms. Del Valle's difficulty of dealing with an unresponsive company.  Not to be judgy, but a less avoidant person could have sent a cancellation letter by registered mail or gone to the facility and talked with someone in person.  She was going to have to go there anyway to get her stuff.  Ms. Del Valle's article is about her own "laziness" -- her word, and to the extent that she incurred expenses because of her own lack of initiative, it is hard to know how the law could help.