Holistic View to Gated Community Revitalization

Desert Highlands Association

One of the biggest challenges facing gated residential communities today is outdated housing stock.

Many of these communities were built at least 30 years ago; and, when their members age in place, they let their houses age with them. When it comes time to move on, they drop an old and outdated property on the market, depressing values and spoiling the entire community’s image. Most people relocating to a new community don’t want to go through the hassle of a renovation, especially if they are transitioning to the area from a distance. As a result, these outdated and overpriced houses just hang over the marketplace and dampen demand for the club.

There are, of course, limits to what a club and Property Owners Association (POA) can do to force members to renovate their homes; but, they should do everything in their power to make it happen. They’ll never gain full the value of the investments they make in the clubhouse or recreational facilities if the houses don’t turn over. In order to get things moving again, the club/POA leaders should think like developers and create financial incentives to get enterprising home builders to buy up these houses, renovate them back into first-class condition and then resell them to new residents and club members.

The residential remodel program allows a third-party developer or investor to buy a distressed house to renovate and sell it in a way that makes sense, economically.

This is exactly what they are doing at Desert Highlands Association in Scottsdale and it’s working! The residential remodel program allows a third-party developer or investor to buy a distressed house to renovate and sell it in a way that makes sense, economically. To stimulate this activity, Desert Highlands waives the builder’s obligation to pay the Community Club’s membership fee until a new buyer purchases the renovated house. While the Community requires the developer/contractor to pay the monthly costs during construction, they do not require the large upfront membership fee. The program encourages the restoration of properties by developers/contractors who do it for a living, do it well and in a cost-effective way that provides good return on their investment.

Desert Highlands has been successfully restoring its housing stock in this way for the last four years. There are always buyers for attractive, well-maintained houses located in outstanding residential communities like Desert Highlands. If your gated community (with mandatory club membership) has outdated housing, develop a residential remodel plan of your own. Communities with less overall appeal than Desert Highlands may need to be even more aggressive, potentially suspending all fees during construction. A market analysis can help shape the parameters of your plan and lead to a solution for one of the major problems facing many gated communities today.

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About Frank Vain

Mr. Vain provides consulting and planning services to private clubs throughout North America and Asia. Through use of specialized services including membership surveys, strategic planning, operational analysis and facility long range planning, Frank assists clubs in developing individualized strategies for their unique situations.

Mr. Vain joined McMahon Group in 1988 and has more than forty years of experience in the management and development of hospitality properties including private clubs, athletic clubs, resorts and restaurants. Frank is a Past President of The Country Club of St. Albans, an 800-member, 36-hole country club located in Missouri and he is the former owner of Concord Sports Club, a 1,700-member family athletic club in St. Louis. Frank was elected to the Board of the National Club Association in 2011 and served as Chairman in 2018-19.

Mr. Vain is a native of Philadelphia and a graduate of Franklin & Marshall College, Lancaster, Pennsylvania. He is a featured speaker at the annual Club Managers Association of America World Conference, National Club Association National and Regional Conferences, Major Golf Associations and at regional chapter meetings of club managers and leaders.

He has written numerous articles that have been published in Club ManagementClub Director andBoardRoom magazines. Frank was named the Gary Player Club Educator of the Year for 2012 and 2015 by BoardRoom magazine. He is the co-author of McMahon’s Club Trends®, a recognized industry benchmark on the trends and issues affecting private clubs.

More articles by Frank Vain
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