I had an idea, but I have no idea how to make it happen. I want to create a website for teens to be able to make a "community" where they have a house, etc. Their friends get to join communities via password. Does anyone know how this could become a reality?

There are a variety of scripts available that would help you create such a community website. Simply search Google for community scripts and you will find a number of great scripts.

phpbb is an open source forum

Although I have tried making a community for universities students to use and alot of people around this age group just use myspace or facebook to talk to there friends.