Contractual Communities in the Self-Organising City

“At this regard, we can imagine that cities more free than now could potentially provide numerous work opportunities, attractions, and leisure activities: such offerings could convince the citizens not to transform themselves into recluses inside of the contractual communities that they belong to. Instead, these communities could be best understood as sorts of ‘‘cells’’ inside an urban world that is lively and pluralistic, a world still worth perceiving and inhabiting for its wholeness. In other words, we might manage to promote the formation of cities which, in their entirety, continue to have diversity and plurality as their distinctive elements. These are their distinguishing marks and their engines of economic and social development. If we promote such cities, any inevitable pockets of small-scale homogeneity are nothing other than pieces in a complex and dynamic puzzle that has a global worth. A greater degree of homogeneity inside of the little environs of a neighborhood can very easily blend in with (and even foster) a broad degree of plurality and differentiation among the various neighborhoods that make up a city.” — Grazia Brunetta and Stefano Moroni

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This book by Grazia Brunetta and Stefano Moroni introduces the reader to the most relevant topics regarding contractual communities. There are three different types of contractual communities: Leasehold, freehold and commonhold, with the most prominent instances of each of those being proprietary communities, homeowners’ associations and cooperatives. The book analyses the first two types, exposing both similarities and differences between the types, as well as their pros and cons.

The data presented in the book makes evident that contractual communities are on the rise, not only in size but also in scope. What is the reason for this growth? The conclusion is that the hindrances commonly characterized as affecting these developments have been overstated and the functions which these communities can perform as well as their advantages have been severely understated.

The authors strongly reject the view that such communities only represent exclaves for high-class citizens to isolate themselves from the rest of society. To the contrary, the authors describe multiple such communities could enrich the urban environment by creating diverse ecosystems inside a city and point to data related to how integrated members of the said communities are in local matters.

Brunetta and Moroni also propose various measures for successful integration between these communities and existing public organizations which both sides could undertake. One of the most developed is that of the tax rebate: To the extent that these contractual communities can provide goods otherwise provided by public organizations, they should receive a tax rebate accordingly. That means, for example, that a homeowner’s association providing infrastructure to its residents do not have to pay for the respective taxes that anymore. This is showcased as a potentially effective way to spur market production of public goods without generating a single penny of costs for existing municipalities and states.

Summing up, the authors see many opportunities for further expansion of the described entrepreneurial associations, but do not consider that they will replace or end existing state municipalities, which in their view will now have the possibility of instead reviewing their current functions and evolving in a way as to better embrace this phenomenon.

The book is split into 3 parts consisting of 2 chapters each, in which the authors describe the characteristics of the different models of multiple-tenant income properties, analyze the ideas of the precursors of such models, and provide key insights about how public institutions could profit from such communities, creating a framework for their development.

Creators of zones and societies can refer to chapters 1 and 2 to understand the differences between leasehold and freehold communities and figure out which type is best suited for their endeavors, along with what incentives and hurdles are involved with the chosen model.

Policymakers and analysts will find the most value in chapter 4, which explains how private communities can play a complementary role in governance and what actions the public sector can take to create adequate incentives which maximize the advantages and minimize the disadvantages of such organizations.

Scholars and experts should take a look at chapters 3, 5 and 6 for the main academic objections to the matter and how the authors respond to them, as well as to understand the proposals of Spencer Heath and Ebenezer Howard, the initial idealizers of the entrepreneurial community.

The book can be found here.

Written by: Francisco Litvay