THE FEAR FACTOR?
by Lim Lay Ying
Property Times, New Straits Times
10th July 2004

A lot of people believe that fear is the No.1 reason for today’s growing popularity for gated and guarded communities.

How great is it really?

To get a grip on this phenomenon is not easy. The fear factor is a slippery gauge. Yes, we do see more and more folks – especially the middle-income ones, want them as gates are perceived to provide them security and assure them of safety for their family members. They have also been impressed by the effectiveness of the concept, which was originally created for the superrich, in enhancing the values of the homes located in these communities.

And these superrich are more than willing to pay big money to live in the top-notch gated communities. They have a big bank account and wouldn’t even blink at price tags of between US$7million (RM26.6million) and US$23.5million (RM89.3million) which is the normal range for homes in luxury enclaves like Beverly Park.

Beverly Park located in Los Angeles, California, is a perfectly landscaped enclave of about 80 homes created for the very rich (and famous) – and for celebrities. It offers an environment that is perceived to be safe, private, and socially and economically homogeneous. Moreover, it allows them to enjoy such bonuses as no waiting time on the private golf course and assures them of a quiet environment.

Homes are as small as 8,000 square feet to as large as 40,000 square feet in living space, and residents enjoy a 4-acre park with running and walking paths, a practice golf hole, and 24-hour security.

Sylvester Stallone owns a house there. So does Eddie Murphy. And Denzel Washington, as well as Viacom Chief Executive Sumner Redstone. (see picture).

As for California’s new Governor Arnold Schwarzenegger, his house is in Brentwood Country Estates, a rival to Beverly Park. Located in the Santa Monica Mountains, the Los Angeles gated community of only 13 homes is mostly home to private, wealthy individuals. Homes measure about 7,000 square feet to 20,000 square feet in size and the only amenity provided to residents is the 24-hour gated security. Average home value in Brentwood Country Estates is close to US$10million (RM38million).

24-hour Security: A Standard Feature

But Beverly Park and Brentwood Country Estates are not the most expensive gated real estate communities in affluent America. The former was ranked fourth most expensive while the latter came in at number six in the Forbes.com 2003 list of the ten priciest luxury gated communities across the United States.

Birnam Wood in Montecito, Southern California, topped the list with the highest-priced home listed at US$29.95million (RM113.81million). The property boasts of 24-karat gold fixtures in all the bathrooms, three elevators, and a kitchen designed by Attilio Carta – designer of Bellagio Hotel’s kitchen in Las Vegas (see picture).

Amongst the ten communities listed, Birnam Wood has the most number of homes at approximately 138 in total – with sizes ranging between 2,500 square feet to 16,000 square feet. Aside from the 24-hour security (a standard feature amongst all the communities), Birnam Wood also offers membership to the golf course and clubhouse facilities in addition to other on-site amenities such as tennis courts and a restaurant.

Six of these crème de la crème gated communities are much smaller domains with less than 50 homes each. Brentwood Country Estates (mentioned earlier) has only 13 homes while Maluhia at Wailea, Wailea, Maui in Hawaii has 14 homes. The latter, part of the Wailea Resort, offers owners access to its four golf courses and the beach club. Five of the homes sit directly on the ocean while the rest are on the hill slopes overlooking the waters.

The least expensive amongst the homes listed in these ten most expensive gated communities, is found at The Ridges At Summerlin, about 15 minutes from the Las Vegas Strip. The price tag at US$1.4million (RM5.32million) is considered the most affordable when compared with majority of the homes in the list where entry-level prices range from US$3million (RM114million) at Rancho Del Lago in Rancho Santa Fe, California, to as much as US$11.5million (RM43.7million) in Field Point Circle, Greenwich in Connecticut.

The Privacy Factor

But to the owners of these homes, the price factor is no big deal. And the appeal of living in a gated community isn’t also merely because there are private security guards always on-call even though most of them do actually choose to live in one because of security reasons. More often than not though, the word “gated” to the superrich means privacy and exclusivity – like a private club where access privileges are required.

By this analysis, the fear factor for this segment of the market is outweighed by the privacy factor. Paying top dollar for this “Trojan” way of life which allows them to live in quiet, is second nature to the superrich. They get to live amongst others who share similar lifestyle needs and aspirations, while knowing that their real estate investments will be protected.

By design, the main purpose of the gate and the fencing is after all, to provide both a physical and psychological barrier for criminals. It does help to put a stop to cars zipping through and using the local streets as a short cut. Presumably, this “no-through road” concept is a lot safer for kids walking or riding their bikes in the neighbourhood. Of greater significance however is that this will ensure that new highways (other than the planned routes) would not be constructed in the middle of the community.

With strict building and design restrictions, and stringent rules in place to ensure that the community “stays nice”, the gated and guarded community concept is set to appeal to more and more people from a wider spectrum of society.

In the United States where it all started, at least seven million households live in the 50,000 over communities today. Thirty years ago, there were only 2,000 of such properties. This phenomenon is occurring at break-neck speed throughout the rest of the world as well…and the developments are not just for the superrich…and often, not solely driven by the fear factor.