Tuesday, May 16, 2023

Real Estate Is Power

Lost in all the talk about real estate markets and real estate wealth generation is one key fact—real estate ownership is one of the surest ways to consolidate influence and power. If you don’t think this is true, simply look up the largest land owners in each major US city and follow the trail of their political contributions and donations. Large land owners can exert a tremendous amount of influence on neighborhoods and local laws. One very public example of this is Dan Gilbert, whose mortgage and real estate empire influences the entire Midwest, but also Detroit and Cleveland in particular. Even former president Trump, who has a less than stellar reputation in the New York real estate market, was able to parlay a real estate empire into a presidency.

The connect between real estate and power goes back to the first inklings of human governance. The person with the most land typically had the most say in how governments were formed. Today is no different. The largest land owners typically have the ability to obtain variances more easily, influence zoning, avoid property taxes and even influence the city plan. This influence is usually asserted through legal tactics, like lawsuits, through para-legal methods, like lobbying and can even be done through direct influence. One instance of direct influence that came to light last year was the situation between Dave Chappelle and his threats to withdraw his business from his town if they didn’t scrap their affordable housing plans. You can read more about that situation here. Needless to say, the affordable housing was never built.

Beyond the topic of influence, the effect of real estate policy on our daily lives is monumental. Zoning determines the quality life of a neighborhood from how much money will be generated, down to the types of people you will see on the street there. Priorities are demonstrated through zoning, as are prejudices. Redlining in lending is one clear example of this, with the situation in Flint, MI being another example. Urban planning affects the lives of billions of people for generations and can be the difference between a stressful, crowded and dirty city and a peaceful, tranquil urban escape.

In light of all that having a massive real estate empire can do for real estate mogul, it is important to keep in perspective that every real estate portfolio starts with just one purchase. So, be it commercial or residential, a house or a mixed-use building, it’s important for you to start. There are so many benefits to purchasing just one property, including the fact that it could be the beginning of your real estate empire.

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