Revolutionary Ideas Part 19 - Ethical Real Estate Investment Trusts (REITs)

Banks of Canada, large and small, this one is for you!

With interest rates on savings accounts having dwindled to miniscule I think more people with bags of cash are probably trying to figure out safe places to put it.  

WHAT IF a bank, or credit union, came up with an investment product which I would like to call "An Ethical Real Estate Investment Trust".  

You see, thinking more about the recent rash of small business closures, it occurred to me that people are starting to notice that the middle class is disappearing and swallowing up a lot of businesses with it.  Diverse shopping districts of independently run shops are being traded for strip malls of chain stores.  Commercial rental rates are getting raised to levels that are not practical for people wishing to take a run at being their own boss.

Now, in earlier posts we all learned that money is pretty much just made up debt anyways.  So how about a bank makes up some of that debt, to invest in affordable residential and business properties.   

This could include a mix of affordable rentals, as well as rent to own scenarios.  The fund could offer mentorship to business owners and long term tenants who wish to own their own buildings.  
If a bank does this, the investment fund could be used for Canadians that can afford to put money into RRSPs.  And this REIT could have a catchy name: "The Canadian Small Business REIT" or "The Ethical REIT" or "The Artists' Trust" (for a REIT that would specialize in helping artists).

The return could come from a combination of cash flow and building appreciation due to inflation and the selection of properties that are likely to go up in value.  A group of savvy real estate investors could help choose desirable properties, based on a few metrics and business sense.

The emphasis of this fund would be providing affordable  housing, as well as conserving Nova Scotian small business owners as though they were as endangered as the Blandings Turtle.  

Rather than building supercentres with insane lease rates that only serve to enslave business owners or cater to big chains, properties in rural communities could be bought and renovated.  

This would be a positive step towards bringing the Middle Class back from the brink of extinction, improving human and community health and wellness, and providing a reasonable return to investors.  

Something to think about.

Bankers reading this, if "The Ethical REIT" turns up in your portfolio I won't cry that someone stole my idea, but rather be very pleased providing that the fund was managed the way I think it should be.