By Loura K. Sanchez, Burg Simpson Eldredge Hersh & Jardine, P.C.
A mere five years ago, CAI undertook an extensive project to speak with over 50 different stakeholders about the future of the community association industry, which resulted in a report entitled Community Next: 2020 & Beyond. Here we are, about to close out 2020, so it is time to look into the next five years. There are currently 70 million residents in community associations nationwide, and 69% of all new construction is within a community association. Our industry's evolution will continue to change and will be driven by many factors beyond our direct control.
As leaders in the community association industry, we must think and plan how to best respond to the evolving trends, including how we govern, lead, support, and manage our associations.
Below are ten trends that should not be ignored:
1) Millennials - The Millennial generation is now the largest generation in the world (72.12 million as of 2019). In five years, millennials will be 29 to 44 years old. They will be residents and owners in our communities. Millennials believe in civic duty and are often motivated to engage on a grassroots level. They are used to working in teams and seek positions of influence without formal structure.
2) Ethnic Diversity - By 2060, it is predicted that 39% of the United States population will be Hispanic or Asian, and there will be no clear majority. Our political climate continues to raise awareness of bias and needed improvements to be inclusive.
3) Working From Home - Experts say that the work from home flexibility that the COVID pandemic necessitated will continue to be a part of our culture in the foreseeable future.
4) Obsolete Community Infrastructures - Communities formed in 1970-80 are now 40+ years old. Most have not been maintained or updated to be fully usable and functional, thereby necessitating high assessments, large special assessments, or economic failure of communities.
5) Connection Demand - While virtual meetings may be here to stay, the pandemic has heightened the importance of human connection and community belonging.
6) Baby Boomers - This generation represents the second-highest segment of our population, and as they continue to age, they prefer to do so in place.
7) Community Association Management Profession - There is a growing recognition that community association management is a profession. With this comes formalized education with multiple colleges, including Arapahoe Community College, offering course work to train community association managers. In addition, the demand for specialization and broader skill bases will grow.
8) Conflict Resolution - The push towards less litigation and more alternative dispute resolution, either voluntarily or mandated by courts or governing documents, continues but with seemingly little effectiveness in community associations.
9) Urban Migration - Migration from urban/metropolitan cities to smaller towns was predicted over 20 years ago but has been slow to materialize. Now it is in warp speed. With remote workforces commonplace post-COVID, 5G wireless communications rolling out, and a national infrastructure bill likely that will make connectivity even easier, there is no need to live in an urban area with high housing costs and low quality of life. The National Association of Homebuilders reported its housing index (used to track single-family home sales expectation over the next six months) at 78. This is the highest in 35 years.
10) Cancellation Culture - Ghosting. Bailing. Cancelling. The trend of committing then not showing up means you can't count on a "yes" at all, so we must figure out how we can curate community volunteers and those we rely on to get stuff done.
While there is no guarantee that any of these trends will continue, using them to strategize how a given trend may impact your community or business is prudent. Without the benefit of a crystal ball, it may be worth considering these potential and many other outcomes from the above trends:
- Technological demands of millennials and future generations must be met.
- Transparency and non-hierarchical leadership is expected;
- Inclusion of all people requires more than just words.
- Language and cultural differences must be embraced to create community.
- More accessory dwelling units will be used as "offices.”
- More in-home businesses.
- New home floor plans will change to meet the needs of home offices and aging in place.
- Naturally occurring retirement communities create a demand for assistance with daily life activities as well as instrumental daily activities of living.
- Future developments may be hybrid models with investors owning common areas and the association leases the common areas for use of the owners.
- In-house or private ombudsmen resolve covenant enforcement issues.
- Community is more important than amenities.
- Community association managers with specific skills such as engineering, finance, and technology backgrounds, as well as multi-lingual, conflict resolution and community building skills are in high demand.
- Single-family communities being built in small towns.
- Less multi-family communities in metro areas.
- Paid board members to guarantee decisions are made.
- Increased salaries for community association managers because of education and specialization.
As with all trends, you can ignore it, lead it, buck it, or be impacted by it. Your choice - but, as leaders of community associations, it is our responsibility to do so with knowledge and thoughtfulness.
Loura K. Sanchez, Director of Marketing Construction Defect Group, Burg Simpson Eldredge Hersh & Jardine, P.C. Burg Simpson helps community associations remain healthy by addressing problems with construction of both new and major renovations.
