There's lots that nobody tells you when you first become a property manager: how many midnight phone calls you'll get over the years, how many tenants you'll find yourself evicting, how many rules you'll find yourself bending in certain circumstances. What most seasoned property managers fail to mention to new colleagues, though, is just how much power you'll have over your community's future in your role. While every property owner or manager would like to imagine themselves as fairly important, the reality is that the choices we make as community leaders can have serious consequences on the daily lives of our neighbors and tenants.
Gentrification is a term often used to describe the gradual transformation of a low-end area into a high-end one. This can have positive effects, like a reduced crime rate and more opportunities for locals, but it can also force out the families who have called the neighborhood home for decades. Scott Safadi of Cal Bay Property Management was recently interviewed on the subject by the Palo Alto Daily News. The community is undergoing gentrification at lightning fast speeds as Facebook moves into town. There are more jobs than houses, so real estate has become fiercely competitive.
As gentrification occurs, property values go up. While some may see this as an immediate win for property owners and managers, the benefits don't come without drawbacks. As cost of living increases, you may find yourself facing the difficult decision of whether or not to raise rental prices. If you have a family that has rented from you for a long time, it can feel like a betrayal to increase their rent because your property value has increased. It's your job as property manager to determine what is best for your community, so these decisions shouldn't be made lightly.
Gentrification can force families out while increasing the number of singles and couples in the area. While this speaks to a general trend, it should be kept in mind as new tenants apply. It's important not to discriminate against applicants with children, as they are protected by the Fair Housing Act.
No one property manager can start or stop the spread of gentrification. By educating yourself about the drawbacks and possibilities that can occur, you can make the important ethical decisions that you may face.
- Scott Safadi, Cal Bay Property Management
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