For most of us who are reading this, I'm sure 80% of us are relatively fortunate in life, have good jobs, roof over our heads, and a full stomach when we go to sleep at night. Most of use have the basic necessities and are seeking the next level of financial security, buying a home or building a property portfolio. The more advanced amongst us are also developers and investors(I put myself as an investor and budding developer), and along the way reaped the benefits of saving hard, taking calculated risks and investing well.
My question for those of you who are sitting comfortably in life, what's the moral role we should play for the new, spiralling underclass of poor and homeless that are struggling with rocketing rents, lack of housing and a welfare and housing system that turns away as many as 95 out of 100 applicants? The irony of the great economic boom Australia is having is this massive pressure on the have-nots to keep up with rising mortgage costs/rents, higher petrol cost, groceries AND rising utilities. By gleefully raising the rents as landlords, there is a certain morality even though we could hide behind the "well rents in the market are up and I have to recover my rising interest costs" line.
This is now entering my psyche as a property investor as I am part of the "problem" that's caused property to rise significantly. If you're thinking, the poor and homeless is not my problem, think again. The magnitude will eventually lead to greater desperation, alcohol/substance abuse, crime etc that will place greater burdens on our taxes, and even economic productivity and hence prosperity. The new underclass is apparently decent citizens that have pretty good jobs, but for whatever reason are unable to cope with the rising costs of living.
What are the big and little ways that the wealthy and in particular property investors and especially the developers can do to ease the burdens? What are the short and long term things that you know of here and overseas? After all some of us have the power to develop more properties and thus ease the supply constraints, or have negotiated some non-monetary benefits from tenants in order to keep them on a discounted rent? Is anyone doing something clever with affordable housing? I for one do not believe the government's role sole or with large developers is not the magic bullet, though it'll certainly help.
For my part, not doing anything special as yet however:
1) My partners and I recently renovated an existing but run down 3 br unit at the back of one of our investments and rented out to students, instead of keeping it empty(it was line ball whether we would make anything out of it, however payback is probably within 3 years)
2) One of my tenants is a mother who relies mainly on social welfare, however is a model tenant in house upkeep and pays rent promptly without fail. She has indicated she can't afford much more of an increase after a recent $10/wk increase. When the rent next requires an adjustment, I am thinking of keeping her rent at the level she can afford rather than losing her, by negotiating for me to store some of my belongings in her shed or the house understorage (as I will have a need for storage space soon). So I recover any discount in her rent by offsetting my cost of having to hire a storage space (the items I store will be of low value, low risk)
Easy; we can supply more rentals, that's where the issue is at present.
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