Non-Profits and the Real Estate Industry

Non-profit organizations and the real estate industry represent polar opposites when it comes to their respective missions. Non-profits seek to serve a public good, while the real estate industry exists to provide housing products and services for a profit. The former provides services to meet social needs that may not easily be quantifiable, while the latter is ultimately concerned only with the quantity of money left over for those who own the company after expenses are paid -- the proverbial bottom line.

There is a public perception that among the least ethical occupations after one acknowledges lawyers, politicians, and used car salespeople, are realtors. Non-profit organizations can be seen in this light as Daniel in the lion's den, do-gooders trying to swim in shark-infested waters.

But while there may some truth to the analogy when it comes to small community-based charities who are barely able to survive from donations, grants, and government programs, the fact is that non-profit organizations such as hospitals, retirement funds, nursing homes, labor unions, political organizations, universities, foundations, religious organizations, and museums and their ilk are often major financial players with endowments in the billions and enormous real estate holdings.

This paper will focus on the trends and relationships between not-for-profit organizations and the real estate industry in Los Angeles, with reference to their rele

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ax, senior staff writer for CNN/Money, "Over the past five years home prices in the Los Angeles area appreciated 125 percent, with prices in a handful of zip codes up nearly 200 percent" (2005). But there are definitely signs that the local housing market in the City of Angels is cooling off. "aFiserv CSW is predicting that prices in the greater Los Angeles area will increase by only 5.8 percent in 2005, with slightly better appreciation in some L.A. markets and price declines in others. 'There is anecdotal evidence that the market there is weakening,' said David Stiff, a senior economist with Case Shiller Weiss. 'It hasn't worked its way into our model yet.' For that reason, the firm declined to give a forecast for individual zip codes in Los Angeles. 'We are very uncertain about what will happen to home prices in Los Angeles this year,' Stiff added". Los Angeles presents a unique demographic situation compared to other cities in the United States, and it affects the housing market non-profit organizations must navigate in order to fulfill their real estate needs. While Los Angeles is the ultimate polyglot multicultural city, it now has a majority population of Hispanics, dominated by people of Mexican descent, who make up 63%

Category: Business - N