I’m a believer in capitalism and have no problems what-so-ever with business offering quality products and service and being paid for them and making a profit. But there are some ‘products’ which are essential to living that must be managed judiciously and with compassion for the critical place they have in the lives of the average person.

Charge all you want for cosmetics, soft drinks, alcohol, prepared and processed foods, cigarettes, etc. – and if someone wants to purchase them that’s their business, but please let’s be reasonable when it comes to the costs for essentials. Like health care, medicine, basic foods and such. Certainly the owners and producers of these products and services should make a profit – but not an obscene one nor should these essentials be out of the financial reach for regular working people.

To that end, this article in the Puget Sound Business Journal caught my attention.

Washington apartment complex fetches $13.2M

Bellevue real estate investor Stanley Xu wrapped up 2008 by purchasing another large apartment complex.

An investor syndicate led by Xu paid Triad Investment Co. $13.2 million for the 190-unit Brittany Park Apartments at 1451 NE 8th St. in Auburn. The complex is 94 percent occupied.

I don’t know either the people or businesses involved and don’t have a stake in the outcome of this transaction – or possibly I do. You see this investment group is purchasing an apartment building in Auburn and plans some quality upgrades to the units (applause inserted here) like new paint, flooring and appliances. That’s great.

But then, as quoted in the article:

“Meissner expects that once the renovation is complete, Xu will be able to boost rents roughly 20 percent, or from about 88 cents a square foot to between $1.05 and $1.07 a square foot.”

OK – I’m certainly operating in the dark with only partial facts  as reported here  but a 20% increase in rent sounds pretty solid doesn’t it? Especially if the people renting are blue collar workers who make the minimum wage (recently raised in Washington state to a bit more than $8.50 an hour I believe.) or are working for one of the companies like Safeway that only allow employees to work less than 35 hours a week so they don’t qualify for full benefits and never make overtime.

You do the math. If a 1,000 square foot apartment in this place is currently going for $880.00 a month the new rate will be between $1,050 and $1,070. While that’s ‘only’ an increase of $170 – $190, chump change for real estate moguls…it represents a big chunk of change to a single parent making $15 an hour and bringing home less than $2,500 a month after SS and taxes – trying to juggle clothes, food, transportation, insurance for health care (If some is making $30,ooo a year you can bet they are paying for a large portion if not all of the health care insurance!) and all of the basic needs of life.

If you have more facts or information – I’d love to learn more about these types of situations. As I say, I have no reason to think Mr. Xu, the man mentioned in the article, is doing anything underhanded or inappropriate. For all I know this could be a god-send to the current residents and I’m way outta line in my thinking.

But reading the story just make me wonder what I can do about this type of situation – or should I not care?  I don’t want to be one of these  crazy radicals who say businesses and investors shouldn’t make money, nor do I want to prevent folks from recieving quality upgrades to their homes…but from my view-point – the ture costs are far greater than a percentage increase on a spread sheet.

What do you think?