Monday, July 24, 2017

The Moral Responsibilty of Commercial Property Owners

Here’s a column that invites conversation.  Several weeks ago I posted a question on one of our local Facebook news pages about the moral responsibility of downtown property owners to the community from which they profit.  It came up because several successful businesses had been told by their landlords that rents would be doubled or tripled.  Moreover, it was not open to negotiation.  Take it or leave it.  I talked with two of them.  One has closed up shop and left.  The other is considering what to do.  As for the landlord, the immediate impact of prime downtown property sitting vacant is not much to him or her.  It’s just a tax write off.  On the other hand, a new tenant capable of paying the higher rent might be waiting in the wings.  Either way, the impact on the community raises questions worthy of discussion.  

The question I asked erupted in a cascade of comments on all sides, some quite angry.  There were the predictable harangues about our award winning downtown being taken over by the wine industry, which overlooked the reality that it is wine tourism driving downtown prosperity.  At the same time, is a downtown that caters only to tourists, offering little to the lower middle income majority of residents, a healthy downtown?  Does it make for a healthy community?  There was plenty of room for anger for those who said no, but even more irate comments came from those who claimed that a property owner can do whatever he or she wants with his or her property, it’s nobody else’s business, so butt out.  Knowing a few of them, they might as well have added, “you socialist pig!”    

Insults aside, what is property ownership?  When we say we own something, what does that mean?  Does the community (whether local, state, or federal) have a right to regulate what property owners can do with it?  Do property owners have a moral obligation to the community in which they do business and from which they profit?  Is a moral obligation enforceable?  By whom?  

The brutal truth is, we never really own anything.  We just take possession of it for a time.  We can own something in the legal sense that we have exclusive right to its use until we sell or give that right to someone else.  We never own anything in perpetuity, only a season if you will.  Someone owned it before us, and someone will own it after us.  The best we can say is that our legal ownership gives us temporary custody.  As custodians, we are its stewards, and stewardship always brings complex accountability to others.  If there is one principle agreed to by conservatives of every stripe, it’s the principle of accountability.  People should be accountable for their actions.  Right?  Maybe they should, but in reality there are good stewards, bad stewards, indifferent stewards, ignorant stewards, and stewards who deny they are stewards.  There are all kinds of stewards, but there’s no getting out of being one.  The thing about accountability is that it makes one’s actions other peoples’ business, but which people and to what extent?   

Among those to whom accountability is due is the community in which a property owner does business, and from which they profit.  What is the community?  It’s the historical creation of people who desired to live in a certain place, in a certain way of life, and in as much security as they could muster without jeopardizing individual freedoms.  By definition, it has the right to set standards and enforce regulations that guide development in directions the community deems appropriate for the kind of place they want it to be.  In our American way, who speaks for the community are its elected representatives, and they have the legal power to enforce their decisions.  The fundamental truth of that is celebrated in the mythology of every old Western movie and t.v. show where the hero rides into town to rid it of the selfish rancher, banker, or casino operator who is intent on usurping community values to set his own rules for how things will be run.  He runs roughshod over the good people who want nothing but the peace and security of a law abiding place where other good people will want to live and raise their families.  He does it until the community, backed by the hero, runs him out of town, or kills him.  It’s a powerful myth, and like all myths it carries a light of truth.  If you don’t like Westerns, consider the Mayflower Compact of the Pilgrims.  It works the same way.

The whole point of the myth is that the moral responsibility each person bears toward the community includes the stewardship of their property, and the way in which they do business.  Have you never watched reruns of Little House on the Prairie?  The greater truth, of course, is that we have never lived into the fullness of our American myth.  The historical record is one of preserving it for some, keeping it from others, and destroying those who get in the way.  Nevertheless, it is our myth, and it does proclaim the best values we hold for ourselves. 

Can you do whatever you want with your property, as some of my interlocutors insisted?  No, you can’t!  We enact building, sanitation, and fire codes to save lives, and protect the collective property value of the community.  For better or worse, zoning regulations dictate the kind of land use permissible in different parts of town.  We even allow private home owner associations to enforce more stringent restrictions, such as colors of paint, outdoor decorations, quiet hours, and the like.  All of this after the Lone Ranger, Matt Dillon, and Clint Eastwood have taken care of the bad guys, making the town safe for the good people to take root.   That we often as not mess it up and do it badly, is beside the point.

So what about downtown property owners who jack up rents that force desirable businesses out of business, just because they can do it if they want to?  Do they have a legal right?  Yes.  Do they have a moral right?  Now that’s a question.  What kind of downtown area does the community want?  In my community there are many who want a nostalgic return to a 1950s that never did exist.  All those stores whose memories they treasure so much, they went out of business for a reason.  The community did not spend enough in them to keep them going.  Heartless property owners may have contributed, but they were not the primary reason things changed.  The world was changing.   It still is. 

The wine industry began to take off in our area about twenty years ago.  At the same time, community leaders were determined to resuscitate the downtown area, with no clear idea of what that might mean.  What it meant was the advent of fine dining, wine tasting shops, boutiques offering quality goods, and the decline of low end retailers in search of cheap rent.  Downtown not only boomed but earned a collection of prizes for being one of the best small city downtowns in the country.  It continues to do so.  In the meantime, property owners complain that second and third floor space remains vacant when they could be used for residences, and it’s the city’s fault because the city demands sprinklers and fire resistant reconstruction owners are unwilling to invest in.  Can the city do that?  Yes!  Because the community does not want to risk unsafe conditions jeopardizing lives.  Are owners being prevented from taking full advantage of the income producing potential of their property?  No!  Because the community does not recognize the possibility of an unsafe potential.  The rule in commercial real estate is always highest and best use, but what an owner thinks that is, and what the community thinks that is, is negotiable, with the community having the final say.  What remains to be said is how mixed uses that cater to a wider array of customers from a variety of economic means can be incorporated.

It’s all about the conservative principle of accountability in which moral accountability has a role, ill defined though it may be. 



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