Origins of the Condominium
Condominium Nation Originally published July, 2013
by Laurence Putnam
It is a common misconception that the idea of condominium ownership comes from ancient Rome. For all the grandeur in laying claim to such ancient history, condominium legislation as it has been coined and adopted in the United States is still so recent that the man responsible for it is still alive and well.
Now retired at age 84 in Salt Lake City, the man in question is Mr. Keith Romney. You might never have heard of him before, but you've probably heard of his cousin (once removed) Mitt, who ran for President in 2012.
We must first acknowledge the longstanding prevalence of co-operative ownership in the United States. Co-operative buildings in the U.S. date back to 1881 beginning in New York, but as any Realtor will tell you, they represent an entirely different animal from condominiums. Legally, a co-operative is an arrangement whereby you are not buying the physical unit in which you reside, but rather “shares” in the building’s holding company which entitle you to a lease of a particular apartment within - assuming you pass the co-op interview as a prospective buyer, which even in today’s litigious environment is no guarantee.
Back in 1960, Keith Romney was a young lawyer who, like most lawyers, had a client with a problem. Romney’s client was a developer in Salt Lake City who was looking to build a series of apartment buildings on the expansive grounds of a mansion he had acquired. The development represented a “first” for Salt Lake City, where until then your only option as a homeowner was a single family dwelling. Thus, no legislation existed in the state of Utah to govern such so-called “co-ownership”.
The plan was for the existing mansion to be the centerpiece of the development, surrounded by a series of new buildings. The mansion itself was subdivided into five units. The development was styled with the tony name Graystone Manor.
The problem was introducing the existing concept of co-ownership, the co-operative, into a community of people whose grandparents had settled the area as pioneers. Romney asserted that such independently-minded Utahans weren't going to take to the established customs of the East Coast co-op boards and the interviewing processes that purchasing such entailed.
After studying existing co-op systems in New York and Chicago, Romney presented his client with a different idea; one that would make it possible to subdivide a building into distinct legal parcels within the same structure. The concept had long since been adopted in Europe, starting with Belgium in 1924 and spreading quickly across the continent. In fact, the U.S. territory of Puerto Rico had adopted similar legislation in 1958, although still absent from that legislation was the word “condominium”. (Puerto Rico referred to it as "horizontal property".)
The word itself Romney claims to have seen with his own eyes while touring ancient Roman sites in Europe. Such sites often include ancient apartment blocks - whereupon on one marble wall Romney found, literally etched in stone, the word “condominio”. Thusly, we may say more accurately that condominiums are inspired by the ancient Romans, rather than a product of. (Technically, private ownership of these individual units in ancient Rome was strictly forbidden.)
Not only did Romney’s client take to the idea, but the State of Utah worked quickly to adopt Romney’s proposals in the form of condominium legislation, although they weren't formally passed into law until 1963. Shortly thereafter, Romney found himself in demand nationally, touring state legislatures as a special consultant to implement similar legislation across the country.
Out of the 120 units at Graystone Manor grew a national trend. Following changes to the National Housing Act in 1961, the Federal Housing Administration began insuring mortgages on condominium properties. Growth of condominium buildings continued with 7,000 such individual condo units having been built across the country by the end of 1964. By the end of the decade, that number jumped to 700,000.
Today’s tally stands at approximately 27-million such units North America-wide and that number is growing. When we look at the May 2013 national housing starts - totaling an estimated 914,000 new homes on the way, a full one in three of those, 306,000, are no longer single family homes with a white picket fence, but rather condominiums with in-suite laundry.
Mr. Romney’s Roman-inspired condominium legislation has essentially displaced the co-operative system altogether, allowing for a more efficient system of buying and selling properties by treating the title deed to a condominium no differently than a single family home. The greater liquidity afforded to condominiums by simple virtue of having their own title deed has pushed property values in condos typically 10-20% higher than values in co-operative units.
It’s been 53 years since Graystone Manor’s units sold out under the slogan “No More Yardwork” - and now one in five Americans call a condominium home. In densely-packed urban centers where the only remaining space is to build upwards, it is not just the only affordable way to buy for most - it’s the only affordable way to build, too.
As for Keith Romney - he lives in the same single family home he has resided in since 1959, having never experienced for himself the pluses and minuses associated with condo life. However, were he asked to comment on his condominium concept and its introduction to the American real estate market some 53 years ago, I would suggest he seek inspiration from ancient Rome once again, and quote the emperor, Julius Caesar:
“I came, I saw, I conquered.”