We need to take a short detour to define our terms. If I am going to spend an entire year talking about community, just what does that mean?
For example, I could talk about
- the LGBT community globally,
- the LGBT community in America or in a specific nation,
- the LGBT community in Florida,
- the residents of East Wilton Manors, or
- the residents of a particular gated community or condo association,
and they could all be considered communities at some level.
So basically, a community is either a diverse group living in a common area, or a group with common interests living over a scattered area. Or maybe a close knit group living in a common area.
For our purposes this year, I think the best definition will be a diverse group living in a relatively common area – like a neighborhood association, for example. A more-detailed case with better statistics could be a census tract (as defined by the Federal government). Even more discrete would possibly be a high-rise building or three. I have an idea I am playing with concerning that.
Now we can move toward the Geekery(SM) and the statistics, and back to where I left off last time.
The notion of community, I think, implies a degree of stability and not transience. Five-star hotels, and streets full of AirBnBs, commodious as they may be, are not communities. To create a community takes time, patience, and investment of of financial and human resources. It is more than a maximization of a rate of return.
The initial position, which the National Association of Realtors still holds, is that of home as investment. There are benefits of building community – yes financial benefits, but also benefits that go beyond the net present value of the transaction for all the parties (including, of course, the Realtors).
And for a very long time this was abundantly clear. As the largest trade association in the country, the Realtors had (and have) influence on public policy at the Federal and state level. Ownership of real estate is encouraged through tax deductions, credits, advertisements, and other societal inducements as being a component of the American Dream.
But various mini housing busts over the years, and then the major crash of 2006-2011, threw all these calculations into abeyance, and brought people like the aforementioned Grant Cardone to stardom. No, Cardone said, real estate in which you live is no investment at all. Rather, it is closer to an expense than an investment!
And he had a point.
I have a neighbor who we can call Charlie. He bought his very nice, large one-bedroom new construction condo, in late 2005, for $300,000 cash. Even today he would be lucky to sell it for $200,000.
So if the thesis was owning a home is always good, and the antithesis is the Cardone position of always bad, then my argument is that the truth is therefore the synthesis. The right kind of ownership, in the right place, over the proper time frame, is not only a great investment, but is absolutely essential and more needed than ever.
Furthermore, a small handful real estate leaders have the information today to guide the market and lead the development of community, better than any other professionals. The vast majority, however, do not presently possess this capability.by