Real estate owners need to engage more with communities as price increases, poverty and crime could soon escalate into something far bigger.
The cost of living crisis is causing havoc in communities across the UK and in many other places in the world. Certainly, it is the poorest who are suffering the most as they are the most vulnerable to changes in price rises in food, fuel and other basics, writes Sarah Coughlan of sustainability services company Evora Global
For real estate owners, this is not just a problem on their doorstep. It is one which could hit owners hard in terms of rents, insurance premiums and, eventually, valuations. But there is action which you could take to limit the harm to your assets, as well as help the communities living nearby.
One of the most unsettling aspects of poverty and deprivation is that there is so much of it in close proximity to prime real estate. Some of our shiniest and most impressive buildings overlook sad and dispiriting scenes of urban decay and disadvantage. Major cities across Europe and North America contain incredible levels of wealth but also extreme poverty.
Costs and crime
But the current cost of living crisis is seeing prices rise at a scale not seen in decades. Many will never have lived through such a challenging time. People are feeling desperate, and when this happens, they tend to do desperate things. Price hikes are already being linked to an upsurge in crime – society is likely to suffer much damage in the months ahead.
Crime harms everyone, including businesses and property owners. A car park, building or a part of town deemed to be risky or unsafe is simply less valuable than one which isn’t. It attracts less footfall and investment and can soon spiral downwards. Attracting talented staff to a company is a challenge for any business and one which is made harder if staff start to feel unsafe where their work is situated.
Once the rot sets in, it can be hard to stop. Here are some actions you can take.
Do more of what you do best
But many real estate owners do take their social responsibilities seriously. So how might they do more? The best approach is often to do more of what you already do well. For instance, I worked with a company which already had a significant history in employing veterans. My advice was for them to double down on that. They already had the contacts and systems in place, so it was simply a case of scaling up. Perhaps the best thing you can do today is to email or phone a group you’ve already been helping and ask: ‘Can we do more?’ Right now, I expect many will say: ‘Yes’. So, whether it’s veterans, apprentices or a social enterprise you work with, drop them a line.
Look for win-wins
There are some great partnerships to be found when you start to explore. A developer I worked with was keen to broaden its supply chain to be more inclusive. After an examination of its projects, we spotted an opportunity for the developer to take supply from a social enterprise which primarily employs the disabled community. The work of this organisation is excellent. However, it was the first time it had ever made a deal with a tier-one contractor. Meanwhile, the developer gained significant kudos for choosing to work with a social enterprise – win-win.
One of the best ways for asset owners to make a meaningful contribution to the local community is through procurement and employment. Reaching out into a local community isn’t always easy and is mostly about making contacts and word of mouth. Finding people to employ on your doorstep creates a direct connection between an asset and the community. It’s surely one of the best things you can do.
Offer free space
Of course, many property owners do engage with their local communities in an attempt to see off the worst aspects. In fact, many are proud to be seen to be supporting the local community. Real estate owners regularly make their properties available to charities, local community groups, sports teams, schools and social enterprises free of charge or at a highly reduced cost. This is the simplest and often the best way to help communities. Once again, I urge you to pick up the phone and try to offer a bit more. Community leaders will thank you.
The cost of living crisis won’t last forever, and markets will rise again. Perhaps that’s the time you’ll be selling your assets. But why will a buyer want to purchase from your portfolio? Hopefully, it’s because you’ve added some social value and, as a result, your assets are looking the better for it. Not all assets will be regarded as having a socially beneficial aspect. However, once this crisis abates, those that do will have a stronger presence in the market.
Sarah Coughlan is the head of social well-being at Evora Global and advises clients on strategies that improve their community impact. She is a fellow of the Institute of Corporate Responsibility and a Fitwel Ambassador.
source: open access government