By Richard Reep
More employment sectors are increasingly migratory and less fixated on a particular place. Many of us are instead working from home, or from places where we prefer – it might be a coffeeshop, or it might be a vacation condo. Housing’s rigid systems belong to the Old Economy.
Meanwhile, a new form of housing less than 2 generations old has quickly gained ground as a part of the luxury leisure lifestyle of the middle class: timeshare. Unfortunately, during the real estate boom in the last several years, timeshares have been severely overbuilt, and the market is years, perhaps even decades, away from filling this oversupply. This form of housing is based not on real estate mortgages - although one or two companies still practice this – but based upon points. And the genius of the points-based residence is its transportability, which served the vacation market extremely well.
By applying a points-based approach to primary housing, a developer will be able to take advantage of the increasing percentage of workers that move frequently for their careers. This unchains workers from their mortgages and lawnmowers, and enables the nomadic nature that has defined several segments of our economy where project-based employment has replaced company-based employment.
Most timeshare developers privately agree: “The party’s over. It won’t be anything like it was, even if the economy comes back. At least not for a long, long time,” confessed one senior developer for an international timeshare company privately. Meanwhile, many of the communities who assumed a vast market of affluent customers need to start asking big questions.
One of them is to refocus on the quality of places. Gated condominium developments, with little or no connection to the communities where they reside, are a study in self-absorbed lifestyles. Turning these into real homes and communities will require opening them up, integrating them into the local culture and civic life of their places, and making timeshares something other than...well, simply a commodity.
It will also require some fundamental changes that are overdue in the timeshare industry itself. The points-based system was originally fabricated as a customer-loyalty system. It will need to be adapted to suit a worker wishing the flexibility to travel from place to place and stay for longer periods of time. Perhaps a more ominous dilemma that the timeshare developers have created for themselves, however, is the crushing maintenance fees, running often $750 to $1000 a week or more.
The credit-backed future dreams of luxury and leisure remain idle, but the physical properties sit on some pricey and fundamentally attractive real estate at ski area bases, golf courses, desert getaways, and beaches. Few may be in the mood these days to buy a bunch of ephemeral points for a vacation, but the same system would serve well any project-based endeavor that assembles workers for an assignment and disbands these workers when the assignment is completed.
The movie industry has operated on this model for years, and other industries have begun working in this same manner. In the Old Economy, this was rare, and most pursuits encouraged a young college graduate to put down roots as fast as possible: Start a career, start a family, and buy a house. Increasingly, however, entry-level workers have resisted this, preferring instead to experiment with multiple careers, often moving from place to place, sometimes until well into their thirties. In the technology industry, software developers have tended to work on this model, and especially in digital media, the permanent nature of jobs and companies has given way to temporary alliances and co-ops to get things done – the so-called Digital Nomads.
Yet even as the workforce and its physical plants adapted, the housing industry instead has trudged along its same path, with mortgages or rental property as the two options. It is time for timeshare to fill the gap in between these two extremes and offer this as a third option. At this point, the timeshare industry has little to lose. Market contraction and the loss of its credit foundation have rendered these companies dormant. There needs to be a paradigm shift to recover at least some of these investments and, over time, create long-term value.
Timeshare developers built plenty of beach resorts, which are still fairly active, but still can be turned into more semi-permanent communities. Their interior resorts – desert, golf, and ski areas – have an even more urgent need for reinvention. A stronger and more stable sense of community, safety and security, and higher quality of life could draw more workers away from the large metropolitan areas, as baby boomers downshift and global corporations onshore their workers.
All this adds up to an opportunity for a timeshare developer who wants to fill his units with paying customers. When digital media employment is studied, it might resemble the timeshare model more closely than one thinks. Dominated by no one single old-economy company, digital media assignments are often accomplished by a temporary alliance of multiple small studios that work together, then decamp and move to the next assignment. This is a perfect scenario for a points-based housing system. Freed from the chains of the mortgage banks and from the landlord-lease situation, the points-based system enables free flow of workers who enjoy sampling the tastes of different cities and have no real interest in setting down roots, mowing lawns, and fixing leaky gutters.
Ski timeshare properties in particular are quite ready for this shift in focus. Ski towns were built upon timber or mining town functions. They already have reinvented themselves and need to do this again. If these towns were to partner with their timeshare properties and incentivize technology and research employers, a new story and a new model could revitalize them.
Marrying this desire to move to more low-density regions combines what timeshare developers do best – create amenity-laden residential communities – with a free-flow form of ownership. This approach is worth a closer look. We need to thaw the frozen residential concepts and look at new models and new stories that are happening in America and elsewhere. By adapting timeshare to the New Economy at this critical point, an industry can be repurposed and a new sustainable housing option can be born.
Richard Reep is an Architect and artist living in Winter Park, Florida. His practice has centered around hospitality-driven mixed use, and has contributed in various capacities to urban mixed-use projects, both nationally and internationally, for the last 25 years.