Prospecting for Real Estate Gold? Follow the Artists
In Mark Twain’s 1892 novel, “The American Claimant,” the enigmatic Mulberry Sellers utters the famous phrase, “there’s gold in them thar hills.” That oft-repeated cry sent many a 19th-century prospector off in pursuit of the precious metal.
Today, evolving artist enclaves point developers and investors to modern-day “real estate gold.” Typically, artists attract other artists, and restaurants, galleries and other small businesses quickly follow. In short, growing cultural capital begets rising real estate values. In turn, new real estate projects typically follow.
This is no isolated phenomenon. The overall impact of artists and this nation’s creative industries is substantial. For example, the Miami Herald cited a study by the U.S. Bureau of Economic Analysis that quantified the productivity of creative industries. The bureau calculated the contribution at 4.2 percent of GDP — more than $700 billion. Another study found that Miami’s relatively new arts scene helped support nonprofit arts and cultural organizations that employ 30,000 people.
Americans for the Arts has a calculator which helps arts organizations assess their economic impact in the community. Its Arts and Economic Prosperity Study calculates that the nonprofit arts and culture industry sustains 4.6 million full-time equivalent jobs and results in $166.3 billion in direct expenditures. Nationwide, more than 340 entities contributed the data for this economic impact study.
Ultimately, the best way to “follow the artists” is to invest in a sustainable neighborhood where these creative forces remain in place for the long haul. There is only one really good way to accomplish this — transform artist-renters into homeowners.
After all, the image of the migratory bohemian artist is more imaginary than real. In fact, artist departures are frequently involuntary — a successful artist enclave often generates a cycle of development and rising rents that eventually force artists out. Ironically, they are pushed out by the very economic forces they unleashed through their creative presence. When they move on to another neighborhood, the cycle often repeats itself.
A Better Way
Since high-rent projects drive artist-renters from the very neighborhood they first popularized, one must ask if there is a better way. Why not stabilize artist housing enough to keep these creative, culturally adept individuals there long-term? Transform artist-renters into homeowners, and make them true stakeholders in the neighborhood. Position them to benefit from rising property values, then let them enjoy the asset appreciation that so often comes from owning residential real estate. One innovative model to take note of is ArtCondo, brain child of arts advocate and real estate agent, Michelle Gambetta. There are a lot of ways that we can be working to address the vitality and stability of neighborhoods in our cities and this is just one approach that has risen to the top. This one project brings hope to the landscape, as it seems to be addressing the needs that are percolating at the nexus of art and real estate.
Artists who remain in neighborhoods, through projects such as ArtCondo, sustain a productive cycle, and the “cool factor” is then more than fleeting. In fact, an invigorated, dynamic neighborhood survives and thrives when artist-renters find a path to homeownership. And at some point, isn’t laying down roots the point?
Read the original article published on November 13, 2017.