The Art of Community

“Each successful multiple-occupancy income property in real estate, beside comprising a community, is a growing island of profitable proprietary administration, a point of health in the world social fabric.” — Spencer MacCallum

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In this work, Spencer MacCallum further develops the concept of proprietary communities and contractual community organization.

First of all, what is a proprietary community? MacCallum defines this term as any multiple-occupancy income properties in real estate. This includes hotels, industrial estates, shopping centers, office buildings and so on. More specifically, he focuses his research on whole ownership, rent-extracting and thus self-sustaining communities.

Spencer argues in favor of this subset of communities on two main grounds: First, because rental income communities, unlike subsidized communities, provide a quantitative measure of their success — that is, the total amount of rent commanded from its tenants. Also, having a single undivided property title under the ownership of one business or landlord allows the owner to coordinate development in a way as to increase the value of the community as a whole.

The author views the value aggregated by the community proprietor as coming from the fulfillment of three main functions: Member selection, land planning and leadership. Having a unified leadership is viewed as a special competitive advantage of these communities in relation to others with divided property titles.

The book also follows the historical development of multi-occupancy income property developments, from the earliest inns to modern hotels and mobile home parks. MacCallum analyses the trends affecting the real estate industry, identifying two main trends: first, a shift away from specialization towards complementary land uses, and second a shift away from the “build, subdivide and sell” mentality towards a the usage of leasehold models to keep a unified title and offer community administration to their tenants as a service.

Lastly, Spencer compares sovereignty-based and contract-based communities, demonstrating that the latter outperform the former in terms of integrity and role definition. The author views sovereignty-based communities as entities which emerge where society could not properly organize land uses without use of force, and concludes with his hopes that the renaissance of proprietary communities in the 20th century and their subsequent growth could provide the way forward towards more diverse communities and a higher level of societal integration.

The book is split into 8 chapters, in which Spencer explores all kinds and aspects of proprietary communities.

Creators of zones and societies should go to chapters 3 to 5 to understand in more detail the different community types, structures and functions, as well as understand macrotrends in real estate development.

Policymakers and analysts may read chapters 7 and 8 to understand the differences of sovereignty-based to contract-based communities and how the latter may represent the next stage in societal organization.

Scholars and experts can refer to chapters 2 and 8 for the historical evolution of proprietary communities and a comparison to primitive clan and kinship-based communities.

The book can be found here.

Written by Francisco Litvay