Does HOA common ownership truly promote community, affordability, and sustainability?

By Deborah Goonan

I have several readers who occasionally send me links to various news stories and articles about HOAs. This one caught my eye, because the writer characterizes HOA critics as uncooperative and “unrealistic.” He goes onto imply that, to be against common ownership (which he calls “joint ownership”), is the equivalent of rejecting both housing affordability and sustainability.

Let’s set the record straight, shall we?

Here’s the quote from a prominent Community Associations Institute (CAI )affiliated attorney in California.

Many owners do not recognize that the benefits of shared ownership involve relinquishing some of the independence of sole ownership. That’s the root of so many of the HOA horror stories we’ve all heard, as owners normally do not realize that their submission to the will of their new community is accomplished by the automatic application of covenants running with the residence.

HOA living is not suited for those unwilling to cooperate with the community. The most caustic critics of HOAs in general are actually opposed to the concept of joint ownership. This is a completely unrealistic position, particularly as society continues to urbanize and affordable land is increasingly scarce. Truly, persons who want a home that is their castle and theirs alone should not live in HOAs.

You can read the rest of the article here, and be sure to read the comments!

First of all, how many people would buy a home in an HOA if they clearly understood that it involves “submission to the will of their new community?” Of course, if the truth was told this bluntly prior to looking at houses and signing the papers at closing, I think there’d be a lot more people walking away, despite all those so-called “benefits” trumped up by developers and sales agents.

Having lived in both HOA and non-HOA subdivisions, I can tell you that there was a much greater sense of community in the traditional neighborhood without a homeowners’ association. Instead of fretting about the condition of neighboring yards, we actually talked to one another. Our children played driveway basketball, rode their bikes and skateboards in the street, and occasionally left their toys outside overnight. When we painted our deck, the neighbor let us borrow his ladder. We returned the favor when he needed to borrow our shop vac. If the neighbor’s empty garbage can blew down the hill, I would carry it back up to his house. He once helped me when my car skidded into a snow bank. I would call that cooperative and neighborly.

In the HOA subdivision, I had to keep the yard and home looking pristine at all times, because I had neighbors that would regularly call the management office to report anything less than their perception of perfection. Painting was a major hassle. One of my neighbors had to submit three different sets of paint swatches until the HOA finally approved the “right” colors. Talk about uncooperative. That’s why I chose exactly the same colors when it was time to repaint my house before I sold it and moved on.

It’s certainly not that HOA critics are anti-social or anti-community. On the contrary. In a real community, neighbors do not live under corporate law, under rules and restrictions that are designed of, by, and for Developers. In a real community, one small minority of neighbors does not hold unchecked power over all the others. Neighbors are not pitted against neighbors, encouraged to “snitch” or nitpick about perceived HOA violations as mundane as leaving the trash can out too long.

And, without common ownership, it is possible to build new construction without a slew of deed restrictions and architectural standards, requiring a homeowners’ association to enforce them.

We’re all adults, aren’t we?  If we’re responsible enough to buy a home, we’re responsible enough to take care of it, without direction from our neighbors, thank you. I don’t know about you, but I am not willing to give up basic property rights and personal freedoms, for amenities I rarely use, just so I can prevent my neighbor from painting his house purple.

Another reason a growing number of consumers are opposed to the concept of common ownership: it doesn’t work! And here’s a dirty little secret. Your state Legislature knows that HOAs stink at maintaining infrastructure. Check out this excerpt from a Florida Community Development District (CDD), a limited purpose government taxing district. (my emphasis added)

Q: How is a CDD different than a Homeowners’ Association?

A: While other kinds of special districts and homeowners’ associations (“HOAs”) may address certain issues relevant to developments, none of them have the specific powers necessary to provide the infrastructure of a community in the manner contemplated by the legislature when CDDs were created. In addition to their inability to effectively finance major capital improvements, HOAs generally do not meet regulatory agency requirements for stable, perpetual entities for long-term infrastructure maintenance. Further, HOAs do not operate under the same open meeting, public records, and financial disclosure laws as CDDs. CDDs also have the ability to place annual assessments on the County tax roll, helping ensure funds for CDD activities are timely collected. CDDs can operate District facilities and perform the maintenance tasks traditionally completed by HOAs. HOAs, however, can perform one function that CDDs cannot, namely the general enforcement of deed restrictions and the exercise of architectural control.

You can read more here:

(Side note: I am well aware that CDDs pose their own set of problems and financial risks for owners, but that is the subject for a future blog.)

There’s a convincing argument to be made that public ownership is more affordable and more sustainable than common ownership. A taxing district, municipality, or county employs paid professionals to administer these essential services, the funds are collected as part of the property tax bill, and financing of repairs, when needed, is on more favorable terms than would be possible for a homeowners’ association.

The truth is, very few volunteer homeowner Board members understand what it takes to adequately maintain private roads, storm water systems, water utilities, parks and green spaces, or even community club houses or pools. And while Developer-controlled Boards probably have the expertise, the profit motive is often at work, meaning the developer tends to keep assessments low while building and selling houses or condos in the community. By the time infrastructure starts to wear out, the developer is long gone. Homeowners then have to pick up the tab, and that means assessment increases and/or special assessments. So much for affordable living. And infrastructure that wears out long before its time can hardly be called sustainable.

Also, given the relatively high failure rate of condominiums, and the fact that only 30% meet FHA guidelines for financial stability (including projects marketed as “affordable”), a growing number of consumers and investors in the know prefer private ownership (apartment buildings, or multifamily buildings owned by one landlord) to common ownership.

By its very nature, the HOA is exclusive rather than inclusive, with its common amenities, gated entries, and limited road access.

Consider that HOA access gates and private roads force commuters to take long, out-of-the-way routes, or to travel several highway exits to get from home to destination. And common ownership of land by a single HOA effectively excludes non-members from enjoying its private parks, walking trails, pools, playgrounds, etc.  Ironically, most of these exclusive amenities are underutilized. One can argue, then, that common ownership constitutes a waste of natural and financial resources.

So, what do you think? Does HOA common ownership truly promote community, affordability, and sustainability?

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