Cities, HOAs Eroding Democratic Principles

By Deborah Goonan, Independent American Communities

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Is democracy disappearing in the US?

Recently, the Institute for Justice (IJ) has filed a class action lawsuit against the city of Pagedale, Missouri. In their recent public awareness campaign on social media, IJ has posted the following video, and has written a news release that recently appeared in Forbes.

Can you believe that a city – not a homeowners’ association – is now issuing code violations and fines for minor, mostly aesthetic violations such as not having matching window coverings or having a basketball hoop or bicycle in your front yard? In Pagedale, you can be fined and even thrown in jail for having a barbecue grill in the front yard, or drinking a beer with your friends in your own yard.

Don’t believe it? Read and see for yourself.

How One Missouri Town Generates Revenue By Treating Its Residents Like Criminals

http://www.forbes.com/sites/instituteforjustice/2015/11/20/how-one-missouri-town-generates-revenue-by-treating-its-residents-like-criminals/

 

Parallels to HOAs

IJ is basing their case on two key Constitutional claims, as excerpted from the above noted Forbes article, written by Nick Sibilla:

In its complaint, IJ asserts that the town’s “institutional reliance on revenue from fines and fees” creates a conflict of interest and an “appearance of bias” among Pagedale officials. That incentive violates the Due Process Clause of the Fourteenth Amendment.

…recently, the Supreme Court broadened due process protections in its 1972 decision Ward v. Village of Monroeville. The Court ruled against an Ohio law that allowed mayors “to sit as judges in cases of ordinance violations and certain traffic offenses.” By collecting court fines, fees and forfeitures, the “mayor’s court” generated as much as one-third to one-half of Monroeville’s total revenue. Citing Tumey, the High Court reasoned that there was plainly a “‘possible temptation’” that could render the mayor “partisan to maintain the high level of contribution from the mayor’s court.” That “temptation” meant defendants in Monroeville were denied their rights to a “disinterested and impartial judicial officer.”

Moreover, since Pagedale criminalizes many harmless activities, like not hanging blinds and drapes “neatly” or not having a screen door, IJ’s lawsuit asserts that the town’s actions violate the Eighth Amendment’s ban on “excessive fines” and exceeds their police power.

 

The parallels are clear and astonishing.

Well…

haven’t homeowner, condominium, and cooperative associations been guilty of precisely the same conduct for decades?

…issuing excessive fines for minor and harmless offenses, allowing the board or its appointed committee to “hear” defenses in what amounts to an internal kangaroo court, allowing some unethical management companies and their attorneys to use HOA covenant violations as a revenue source for both the association and themselves, HOA boards generally abusing their power to fine because it makes up for revenue shortfalls from assessment collections – or simply because they don’t like you.

 

There is one key difference, though.

Cities such as Pagedale (and apparently other cities as well, according to IJ’s report), have the power to criminalize civil offenses and non-payment of fines. They can actually put citizens in jail for failure to comply or failure to pay fines.

HOAs, by comparison, cannot throw anyone in jail. (Although jail time was threatened to one couple who put a purple playset in their backyard.) But your Owners’ Association can put a lien on your property and take your property away through foreclosure. And in about half of the US, the foreclosure process can be done non-judicially, opening up even more possibility for abuse of power.

So instead of spending a short period of time in jail, your HOA can make you homeless and leave you penniless. Now, don’t you feel better?

Why is there no parallel outrage?

What is the reason for the lack of outrage concerning HOA abuse of Constitutional and Civil Rights by the majority of our legal scholars and experts?

Oh, yes, the old, tired arguments that you “freely choose” to live in an Association-Governed Residential Community and you “agreed to a contract” that restricts or forfeits some of your inalienable rights.

But, the truth is, buyers and even tenants have few non-Association-governed community alternatives. It is becoming nearly impossible to find a home without a mandatory association.

 

Want proof?

Look no further than the Census Bureau’s Survey of Construction (SOC):

https://www.census.gov/construction/chars/pdf/association.pdf

Some highlights:

Percentage of single family homes completed in HOAs:

  • 2009: 46%
  • 2014: 59%

That represents a 28% increase in construction of HOA homes.

Percentage of single family homes built for sale (Spec homes) in HOAs:

2009: 62%

  • Northeast: 42%
  • Midwest 55%
  • South 68%
  • West 60%

2014: 73% (17.7% increase)

  • Northeast: 46% (9.5% increase)
  • Midwest 55% (same)
  • South 80% (17.6% increase)
  • West 73% (21.7% increase)

These figures only account for single family homes, and do not include condominiums or cooperatives, all of which come with a mandatory association. In urban areas, condos and co-ops are often the only type of dwelling you can own.

It’s also worth noting that the decision to construct HOAs is driven not by consumer demand, but by the primary beneficiaries of higher-density communities – local governments and developers.

As for the Contractual Myth, I refer you to my previous blog, Let’s Dispel Some Myths about the Contractual nature of HOAs.

 

How 5 decades of HOA Industry growth and dominance is adversely affecting the public interest

By now, it should be painfully obvious that cities like Pagedale are engaging in copy-cat abuse of power and, dare I say, corruption, that has become more and more commonplace in mandatory owners’ associations across the country and around the world.

And why not? Local governments and HOA industry stakeholders have been allies for decades. Theirs is a mutually beneficial economic relationship, at the expense of HOA consumers and taxpaying constituents.

HOA Industry influence is eroding the principles of democratic governance at the most local level, and that influence is now spreading beyond the gated communities, low- and high-rise condominiums, and big city cooperatives to our small towns and cities. Your city could be next.

Unless, of course, we resolve to preserve democratic principles and insist upon rights for all Americans, no matter where we happen to live.

 

 

 


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