July 2025
There is a fundamental misunderstanding about economics. Its basic concepts provide a framework for effective decisions helpful to condominium boards.
The fundamental misunderstanding is in thinking that economics is about money. It is about scarcity and decisions in the allocation of limited resources. It is about making smarter choices among available options. In condominium communities, these limited resources are time and money. Money spent is unavailable for use elsewhere. Time spent on one issue requires that less or no time be spent on other concerns.
Every choice has a cost – an opportunity cost in economic terms. Choosing badly means that better alternatives are sacrificed. Deferring a decision is a choice with consequences. Avoiding this to the greatest extent possible requires facts and good choices.
Economics addresses supply and demand. Supply represents time and money. Demand represents what the condo board and management can or should be doing. In the context of a condominium community, board and management, demand always exceeds supply meaning that compromises must be made. Decisions on how to spend available time and money means less of both dedicated to other matters.
Understanding these foundations produces better results because those making decisions consider the opportunity cost of their choices.
