Meh, so I'm jumping in on a side I never thought I would in this debate, but anyways...
I make financial decisions with the best interests of my family in mind. That includes purchasing a house in a location which offers a good environment in which to raise my kids (let me finish...), and in a location which I believe will steadily rise in value so that the financial stability of my family increases over time. I do that in order to be a responsible father and husband (and my wife would think along the same lines).
So...how to judge a good location?
- First, I looked at schools and transport.
- I also looked at the natural-ness of the area. Ugh, I'm making up words again. I live in a very green area, by suburban standards, with plenty of history (it was originally a satellite town, not a 'burb), a pretty decent artistic/hippy community close by, a mix of housing types (I hate cookie cutter suburbs), etc.
- One of the things that counted against it a little is that it's pretty white, actually. I like my kids to be exposed to a variety of cultures.
It's not a cheap area. We started with a small place (2 beddy unit) and I was on a miniscule wage (it was just after I'd thrown in teaching). We only had the deposit because I went overseas and worked for a year.
I did well at my career. It involved another stint overseas (18 months) although my girlfiend (now wife) could come too, which was great. I worked hard. I mean...really hard. It sounds conceited, but I am quite sure most people would have struggled with the combination of high-pressure, difficult work involving lots of travel. I was working 4 days a week in Sydney whilst living in Auckland, then doing the same from Melbourne. I left that job, on my own terms, and eventually we bought a modest 3 bedroom house in the same suburb.
Mortgaged ourselves up, but kept the unit as an investment property. We set the rent lower than the real estate agent suggested. Frankly, we thought the whole market was overpriced, and we were trying to be responsible. From a selfish point of view, it also gave us lots of renters to choose from, so you can read that either way.
Single female with pets we accepted. She had been having trouble finding a place that allowed animals, but had good references otherwise. She was great, so we froze the rent for most of the time she was there. The time we put it up, we went and discussed it with her, and basically said 'If we can put the rent up x, we'll replace the heating (which was working...just old), and a couple of other things...' We just wanted some cash to reinvest in the property. The rent increase didn't cover it, but it helped, and obviously also helped capital value.
When we wanted to renovate our house, add an office so I could work from home and not have to travel away from my kids, etc, we sold the unit. But again, we included the renter in the process, introduced them to the prospective buyer prior to any signing, and all talked about what the future plans would be.
Years later, the renter is still there, still gets much better rent than the area demands, and is still doing a good job looking after the place.
That money we made was invested back into our family home, and then some. It left us pretty much flat broke, plus I've quit work and am working for myself to try and improve the amount of time I see my kids, etc. If it all goes well, we (me and my business partner) are hoping to employ someone in the next 12 months or so. Because of the nature of the industry, there is a high chance that will be a first generation immigrant, but obviously I'm projecting there.
If I buy my home for (let's say) $500000, and then invest another $200000 in trying to improve it, work my ring off trying to service that, and then see the price plummet by $100000 for ANY planning decision, you can bet I'd be asking questions. I very carefully looked at planning for the area when I moved here, and did my due diligence.
Now...am I saying to keep ghettos, and not disperse immigrants, etc?
Nup. You're gonna have to trust me on this, but I am in no way racist. I have lots of friends of various nationalities (mostly sub-continent, and Scandanavians, few Brits, couple of Americans...), and as I mentioned earlier, I would love for this area to be a little more diverse than it is in a racial sense. I've also taught in amongst what could be described as the ghetto-ish parts of Melbourne, and have a first hand understanding of at least some of the issues. But planning has to be considered and reasonable.
I already take plenty of hits in terms of funding social programs and the like. And, as you mentioned, house prices go up and down. That is different to having a politician decide to place something next door to me, be it government housing, needle exchange, or whatever. I'm not saying I'd be against it, but I would certainly have the right to ask questions, and to protect the investment I've worked so hard to gain.