Community
VALUE ADDITION:
A 15-YEAR LOOK AT COMMUNITY ECONOMIES by Steven Blank
I
I’ve seen this industry’s evolution firsthand through
working as a community operator over the past 15 years. As we are amid an economic boom in our industry and everyone’s focus is on value addition, I believe it is important to understand how we got to this point by taking a holistic view of our industry since the 2008 recession. By understanding where we are coming from, we can make the best decisions on how to add value moving forward in this ever-changing environment.
The Old World Flash back to 2006, when you could purchase a community with 90%+ loan to value, there were multiple non-recourse chattel lenders to finance new home sales, and very few operators were renting houses. As such, selling homes could be done at volume (and for a nice profit). Then came the Great Recession, with chattel lenders going out of business overnight, our resident bases losing their jobs, and community financing becoming more difficult to obtain. Communities lost occupancy through resident loan defaults with home inventories purchased, sold, and removed by third party home wholesalers. »
22 | JANUARY / FEBRUARY 2022 EDITION
