Our Ever Evolving Industry

Our Ever Evolving Industry

By Clint McClure, President & CEO of MMI

The community management industry has evolved significantly since its beginnings more than 50 years ago, and the pace of change has accelerated dramatically in recent decades. We should all be proud of how far we have advanced in a relatively short period. 

Today's community managers are professional and proactive. As their role has grown in complexity, they have needed to become skilled and knowledgeable across a growing list of disciplines. They must be dynamic and adaptable in order to meet the varied and expanding needs of their clients' and workforce. And somehow, they must maintain a personal touch when providing service and meeting the demands of hyper-connectivity that resulted from improvements in technology. 

Past to Present

A number of forces came together in driving the formation and early expansion of our industry. In the late 1960s, our state and federal governments pushed for large-scale community development, which coincided with a growing number of people coming to live in the Golden State. In 1970, California became the most populous state in the country with a population of nearly 20 million people. That growth in population created a high demand for housing and development, and as land became scarce, driving up costs, developers increased the density of homes in their communities.

In 1978, California enacted Proposition 13, otherwise known as the “Peoples Initiative to Limit Property Taxation.” Prop. 13 limited the source of revenue streams for state and local governments to expand infrastructure for housing. As the population continued to grow, the demand for housing continued to be high and developers wanted to ensure that their new communities were sustainable. Developers came up with the idea that a community should be self-sufficient and maintained by an association. This resulted in a dramatic rise in the number of associations from a relatively few in the 1970s to more than 50,000 in 2015.

Today, California is unrivaled in terms of population and is the unquestioned leader of the community management industry. Take a moment and think about the following: 

  • Today, one out of every ten people in the United States lives in California.
  • If California were its own country, it would be the 34th largest in the world.
  • The population of California is larger than Canada.
  • One out of three Californians lives in a common interest development (CID).

As California's population grew, so did its community management industry - not only in size but also in responsibilities. Associations were originally borne out of the need for professionals to help associations administer their finances. However, with the CID model in full swing for developers in the late 1970s and into the 1980s, the next decade of development brought an increase in responsibility for associations. The focus on accounting services expanded to include managing property including association assets, ensuring membership compliance and assisting the board in administering their corporation. 

Growing client demands caused service to expand and specialize. Companies whose purpose was to manage associations gained traction, while members of the industry began to sharpen their skills and make improvements to existing processes. Computers started replacing the long-standing accounting ledger books, and simple computer databases were created to track information in addition to the rows and rows of file cabinets. Additionally, the development of the internet forced association managers to become more responsive and adapt to a much faster pace of business. As management professionals, our commitment to improvement and success year-after-year has resulted in some remarkable changes in our professional qualifications. 

The Only Constant is Change

The demands of our communities and boards also have changed over time. We all recognize the complex communities of today require an evolved manager to practice in areas of our profession that were not a part of a manager's skill set a few years ago. Community managers also are now responsible for far more tasks per day than in the past. 

This means today's manager needs to have the skills and education in place to rapidly respond and advise their board when needed. More importantly, managers need to stay ahead of board demands and advise their board proactively. Proactive strong and marketable for the future. For example, consider the most populated area of the state, Southern California. In the 13 counties of Southern California, the average annual reserve for an association is estimated to be $235,000 (according to HOA information). There are more than 21,000 associations over 21 years old compared to only 1,553 new associations, making the average age of an association 19 years old. For 63 percent of the associations in Southern California, their older age calls for a proactive management style when it's time to replace aging infrastructure and when dealing with a major capital replacement project.

Today's Community Manager

Today, our managers are ready to provide solutions to the financial needs of their clients, work with them on the operations of their community and help communities stay ahead of their needs, you might as well dig a hole, jump in and get out of the way. Many of our communities simply require professional proactive management and a skilled professional to tell the boards what they need to hear and not what they want to hear. At times, the association's needs may be complex, and decisions require guidance from a team of experts. Today's managers are able to help assemble the right expert team for their board. Boards of today appreciate managers that are networked to work with all types of professionals and that can help the board care for their community. 

 The innovative spirit that drove community managers to distinguish themselves from the property management industry only a short time ago continues ever strong. Managers are now expected to enter the workforce with the accounting basics of our past, as well as the management consulting expertise to address every aspect of the community they serve. As managers, we are prepared to address legal, financial and administrative issues while anticipating future and current maintenance needs. By embracing technology and using it to improve the ways in which we conduct business, and by continually educating and improving ourselves, we are providing superior service to our customers. Our goal is always one hundred percent customer satisfaction. 

The manager of today has evolved into a professional asset vital to the success of any community. 

This article was previously published in CACM's Vision magazine.

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