This topic will be discussed in depth at the 2025 CAI High-Rise Managers Workshop on July 16. If you will be at the Workshop, be sure not to miss this class!
A condo is more than an asset. It is a place in which we may cherish those who live (not just invest) in our shared spaces. Simply selling these spaces to the highest bidders infringes on that core, that heart, of condo ownership.
Unfortunately, we must be aware of a phenomenon spreading like ivy on the façade of modern urban life: corporate ownership of high-rise condominium units.
It is a matter that deserves neither haste nor hysteria, but calm deliberation and honest analysis. For though corporations may carry the outward trappings of progress, we must examine what lies beneath the surface, where the real consequences reside.
What Happens When the Machine Buys the Home?
A high-rise condominium is not merely a structure of concrete and drywall. It is a republic in miniature, a place where neighbors nod in the hallway, where decisions are made collectively, where shared interests bind disparate souls. But what fellowship can one find with a limited liability company? What neighborly bond does one form with a cold, corporate entity? As more high-rise condominium units are snatched up by non-human owners, the people living beside the machines will start to feel the impact.
The Erosion of Community
Corporate owners do not attend potlucks, they do not volunteer for committees, and they certainly do not water the begonias in the common area. Their absence is not just physical, it is civic, and it chips away at the democratic underpinnings of condominium governance. A community association is coming together, but with corporate owners, neighbors are often renters, who are nothing more than a profit center.
Investors Take Control
A corporation may acquire one unit. Then another. And soon, like a poker player flush with chips, it holds a stack so high it threatens the balance of the table. When investor-owners accumulate a significant number of high-rise condominium units, they wield disproportionate influence over the board. Decisions once made in the interests of full-time residents may suddenly serve absentee landlords and their bottom lines. What is lost is the very notion of stewardship. The condo becomes a commodity, not a community.
Neglect and Nuisance
Where corporate interests predominate, the human touch evaporates. A corporation renting a dozen units may not vet tenants with the same diligence as a live-in owner. Turnover increases. Rules are ignored. Hallways echo not with children’s laughter but the shuffle of suitcases from transient strangers. And the building suffers for it, quietly at first, then visibly. Inevitably it becomes a short-term rental Hellscape.
There Are Some Silver Linings
There are, indeed, merits to corporate ownership. For example, humans are messy, inconsistent creatures. We move, we bicker, we break things. Corporations, when managed ethically, can offer a measure of predictability. Their leases are standardized, their intentions clear, and their presence, at least on the ledger, is reliable.
And some corporations, especially those with long-term stakes, will not complain about a much-needed special assessment but rather consider it the cost of doing business.
Then again, there are just as many investors who know so little about community association living that they fail to realize they have dues to pay at all, driving up delinquency rates and plunging communities into financial uncertainty.
What Can Be Done?
At the end of the day, corporations may own property, but they cannot love it. Without knowledge, care, or personal investment, corporate owners are incapable of truly assimilating into the rich fabric of any high-rise condo community.
But that can be addressed.
- Educate them. Teach your corporate investors about the importance of not only their dollars, but their place in the community—when to pay dues, when to attend meetings, when to cast their votes. At the very least, you’ll likely get paid on time and with little brouhaha. But don’t expect a holiday card.
- Change Your Documents. Stop the problem before it even starts to take root. Limitations on investor ownership percentages, and short-term rental restrictions go a long way in preserving community.
- Lobby for Change. State-level rules will help reinforce the power of your governing documents. Motivate your representatives to make changes like short-term rental requirements and community voting rights.
- Bring in Professionals. Don’t go at this problem alone. CAI is a great resource for initiating legal change, and Axela is always at your disposal when dealing with difficult delinquencies.
Don’t let your high-rise condo community fall victim to the downsides of corporate ownership. If you want to learn more, or are ready to engage a thoughtful, knowledgeable team of experts, talk to Axela today about a no-cost collections analysis.
