Where is Oakmont headed?
By Steve Spanier, President, Oakmont Village Association Board of Directors
In 1983, when I first met my wife-to-be, she was living in what she called “the slums of Cupertino.” After telling her I wasn’t aware of any slums in Cupertino, she quite correctly said, “No, I live in Rancho Rinconada.”
In fact, in those days, it was easy to find inexpensive housing in “Rancho Rinky-Dink,” as some called it. This then-unincorporated area had a great location, convenient to just about everything in the Silicon Valley, but was less upscale than just about every surrounding area.
My wife’s house cost less than $100,000. As I write this, Zillow shows six homes for sale in Rancho Rinconada. They range in price from about $1.7 million to about $2.9 million. The $1.7-million-dollar home is just over 1,100 square feet – very close to the size of Oakmont’s smallest homes.
Over the last 10 years, San Francisco became a technology center. Wealthy, young people moved in, drove up real estate values and forced some potential residents to look elsewhere for more affordable homes that still provided ready access to their workplaces.
They found those homes across the bay in Oakland. As San Francisco transformed, Oakland real estate values increased dramatically. Many poverty-stricken, depressed areas were transformed.
How do long-term residents of Rancho Rinconada and Oakland feel about the rising costs of real estate in their communities? Some are very pleased about the significant increases to their net worth. Others rue the development as unwanted gentrification.
Oakmont is currently being shaped by economic influences beyond the control of any Oakmont residents, including the board. At first blush, this may seem to seriously underestimate what any board can do to influence where Oakmont goes, so please allow me to explain.
The following facts about Oakmont seem incontrovertible. First, it’s located in a beautiful part of the world. Second, its Mediterranean climate is very appealing. Third, it features a high percentage of detached homes, so housing density is significantly lower than most other retirement communities. Fourth, it offers virtually every amenity and well over 100 clubs. Fifth, it’s located close to two places (San Francisco and the Silicon Valley) where housing values are outrageously high. Sixth, it offers some upscale view homes that are worth well over a million dollars. In summary, it’s an extremely attractive retirement spot.
Meanwhile, the average Baby Boomer is 63 years old and preparing to retire. An enormous Boomer retirement wave is about to crash onto the shores of retirement communities across the country.
The stage is set. Oakmont is an attractive place to retire in a wealthy part of the world, just as many people are looking to retire. Oakmont is becoming, and will continue to become, a wealthier community.
Can any Oakmont board change this dynamic? If an Oakmont board tries to govern too frugally, it’ll get tossed out. If an Oakmont board tries to govern too lavishly, it, too, will get tossed out. And the tossing will not take long, since on average, half of every Oakmont board turns over each year.
Oakmont boards must govern within a reasonably narrow range, or they’ll get tossed out. This is the “Goldilocks Theory of Oakmont Governance.” Not too lavish. Not too frugal. Just right. Meanwhile, wealthier people will continue to move here and, in increasing percentages, run for the board.
Let’s say a relatively frugal Oakmont board decides to not fix anything. Oakmont buildings continue to age and things begin to break. Open spaces turn brown. Oakmont becomes a fixer-upper community.
Despite this, Oakmont’s incontrovertible facts still apply, so potential residents conclude its “bones” are good and Oakmont becomes an attractive investment to go along with its other positives. People buy homes at relatively low prices, invest lots of money to fix them up and run for the boards so they can then fix up the community.
Oakmont IS changing, but the economic influences creating this change have been at work for years and will continue to dissolve whatever Oakmont was before and turn it into whatever Oakmont will be in the future. Boards, which must govern within a reasonably narrow range, simply cannot affect this trend in any meaningful way.
Speculating about what Mr. Berger may or may not have intended Oakmont to be 60 years ago is useless. Oakmont is continuing to evolve, regardless of Mr. Berger’s vision, just like Rancho Rinconada and Oakland are continuing to evolve regardless of what their original city planners might have had in mind.
Research shows a large percentage of retirees worry they’ll outlive their money. Increasing home values diminish the chances Oakmont homeowners will outlive their money. Using financial instruments such as reverse mortgages, owners can continue to live in their homes after their liquid capital is depleted.
Some are saying Oakmont’s current board plans to gentrify Oakmont. This is irresponsible, blatantly untrue and, frankly, baffling. Our board will continue to work with the community to understand and address the economic influences affecting us in a way that ensures Oakmont remains a relevant and desirable place, where both present and future residents come to live and enjoy their lives.
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