Affordable Housing – A ‘High Calling’?

Real estate investors like everyone else sometimes wonder if what they do adds up to making a difference. To themselves or to anyone else.

Recognizing today’s crisis in Affordable Housing may provide an answer.

Finding your calling

Many well-meaning people struggle–sometimes for years–trying to make what we do for a living add some meaning to our lives. At the end of the day how do we make our job have meaning for who we are or, better, what we were meant to be? Is there anything about what we do on a day to day basis that might be considered a “calling”?

Some people pursue careers in “helping” or service professions. Doctors and health care practitioners come to mind, as do teachers, social workers and the clergy. These folks do what they do out of a commitment to helping others. Income and lifestyle may be sacrificed in the interest of contributing to the well being of others. Some may consider themselves as “called” to their work, or as pursuing their calling. What is not in doubt is some recognition they are contributing members of society.

Who benefits–who is to profit?

In business such altruistic motives sometimes translate into so-called “social enterprise” business models. Investors may fund business startups committed to providing employment opportunities for the unemployed. Cooperatives of every sort are organized to provide profit participation for member-owners rather than sometimes remote stockholder owners. All such initiatives share the common goal of addressing a social or human need in a positive way, to improve the human condition.

Real estate investors have such opportunities as well. Especially those who focus on the distressed housing niche. Low first-cost housing, such as that found routinely in the REO/Foreclosed housing market, offer the opportunity to profitably rent or sell refurbished housing to those in need of Affordable Housing.

A continuing crisis in Affordable Housing

It is by now a commonplace that over the last 20 years wages have remained flat or even declined in real dollars. Meanwhile, the cost of housing has continued to rise. Many renters are paying over 50% of their income on housing, leaving little for other important necessities in life.

As this video demonstrates, the situation has reached crisis proportions and shows no signs of abating absent some major interventions (which are not yet on the horizon).

Real Estate Investors can help

This dire situation offers real estate investors the opportunity to make a difference. Particularly those who specialize in distressed housing.

It doesn’t take sophisticated analysis to figure out a vacant but otherwise structurally sound home can be returned to service for far less (per square foot) than today’s cost of new construction. And this, in most instances, without the need for governmental oversight or subsidy.

All of this is to say real estate investors and rehabbers have before them opportunities to become providers of Affordable Housing. Addressing this problem, this critical need, is opportunity to participate in a private sector-driven social enterprise business model of direct benefit to low and moderate income families.

A Calling for you?

Pursued with vigor the impacts of contributing to affordable housing will prove tangible, observable, and be a model for others. Such activity is socially beneficial (and perhaps a bit redemptive). And, for some, active participation in addressing the need for affordable housing will constitute opportunity to transform what we already enjoy doing into a Calling of real consequence.

Philip Elmes

Urban Rehabber Program