Will construction of condos and dense HOAs cure the Housing Crisis?

By Deborah Goonan, Independent American Communities

Blue Door

For the past year or more, the real estate industry and politicians have been studying housing supply and reporting on a housing crisis characterized by high rents and a shortage of homes for sale in the middle and lower price brackets. The evidence is clear that, except for high-end McMansions and luxury condominiums in a few urban centers, housing is now in short supply.

A recent article written by Matthew Yglesias opines that a primary reason for our housing shortage comes down to local zoning ordinances. Many affluent towns and counties have adopted policies that require all new construction to be detached single family homes on relatively large lots. What that means is that most people cannot afford to purchase a lot, let alone build a home on that lot that is large enough to meet zoning requirements.

Welcome to the next housing crisis: chronic undersupply of homes for a growing country


I have to agree with Yglesias. This is a real problem. I have lived most of my life in Pennsylvania, where countless numbers of small townships and boroughs flat-out forbid construction of apartment buildings, and will not allow new construction of modestly-sized single family homes – suitable for first time buyers or retirees – on smaller, easier to maintain lots. In fact, I can remember the frustration of trying to find a modernized home in a good school district for our family in the 1990s. But every single home we could afford was at least 15 – 30 years old and in need of tens of thousands of dollars of repairs and remodeling.   We ended up buying one of the many fixer uppers on the market at the time, and did some badly needed major renovations.

Several years later, we considered selling the property and buying up to a newer home or moving to a different neighborhood. But, once again, even at a higher price point, there was very little on the market that was in move-in condition. To complicate matters, the school district had only two apartment complexes where we would be able to live if we happened to sell our home before finding (or building) a new home. We decided to stay put, and did further renovations over the next decade.

The rental shortage was so bad in that part of the County that local hotels began renting rooms to workers and executives brought into the area to establish new businesses and industry. Of course, that certainly did not help with efforts to increase economic development.

So, I get it.

Local government elected or appointed officials who give into pressure from elite constituents end up making housing options scarce, limiting housing supply, and stopping economic growth.



But what is the solution to this vexing problem?

According to Massachusetts state legislator Brian J. Honan, the answer is to create a state law that requires all local governments to set aside at least some land for multifamily housing, to allow for “cluster developments” of smaller homes on small lots, and to allow for “accessory dwellings” on single family lots.

You can read about it here:

A Massachusetts state legislator has a big idea to ease the urban rent crisis


And read the bill (as it currently stands) here:

Bill H.1107

An Act to expedite multifamily housing construction


Now let’s examine the draft of the bill (as of the date of writing) and read between the lines, emphasis added in bold italics.

Section I states:

Zoning ordinances or by-laws shall permit multifamily development by right…

and defines multifamily housing as

…apartment or condominium units in buildings which contain or will contain more than three (3) such units.


Section 3 states:

… zoning ordinances or by-laws shall provide that cluster developments shall be permitted by right in residential zoning districts at the density permitted in the zoning district in which the property is located…


Section 5 states:

 Zoning ordinances and by-laws shall classify “accessory dwelling unit,” as defined herein, as a use permitted by right in all single-family residential zoning districts.  No zoning ordinance or by-law shall unreasonably regulate the location, dimensions, or design of an accessory dwelling unit on a lot.  As used herein, “accessory dwelling unit” is a self-contained housing unit incorporated within a single-family dwelling or detached accessory structure that is clearly subordinate to the single-family dwelling and complies with the use, dimensional, and design requirements of the local zoning ordinance or by-law.


Honan is essentially advocating for new construction of not only apartment communities, but also common interest communities, which, by default, tend to require establishment of mandatory homeowners or condominium associations. A “cluster development” is political code for the HOA, as is the reference to establishment of housing units “incorporated within” or “subordinate to the single-family dwelling.”

Of course, it does not seem to matter to Honan and others that market demand for HOAs is low, that Association Governed Residential Communities all over the nation are failing to thrive and struggling with mounting debt and corruption, that assessments make housing less affordable, and that a convincing case can be made against common interest/ownership.

Honan wants the state of Massachusetts to mandate that all local governments permit construction of more of the same. Keep in mind that Brian J. Honan is a developer of multifamily housing.


Why can’t we have multifamily housing and affordable independently owned housing without a mandatory owners’ association?

Consider the following.

Once upon a time, before the HOA industry heavily influenced housing policy at all levels in the U.S., private owners were permitted to divide their properties into two or more units or build small cottages in the back yard. Doing so provided much-needed housing for extended family or allowed the owner to rent portions of the property to offset household expenses.

Until recent U.S. history, property owners did not chop up large dwellings, or build “pop-ups” to create and sell off part of the property as condominiums. They merely rented out the spaces they were not using personally, and retained personal responsibility for maintaining the entire structure. The need for housing was satisfied without creating the inherent bureaucracy of a condo association. When landlord-owners lived on site, the structure was less apt to become a run-down tenement.

With the advent of the absentee landlord, we also saw a rise in exploitation of vulnerable tenants. That sometimes led to unsightly and crime-infested inner city slums, which, in turn prompted suburban governments to prohibit construction of all apartment buildings.

But to make matters worse, federal public policy decisions to ease financing for condos has created even bigger, more complex landlord-tenant conflicts than ever before, while, at the same time, creating all sorts of financial risks for condo owners.

And as recently as the 1980s and early 1990s, new townhouses were constructed with separate utilities on independently owned lots and public roads, without the establishment of a homeowners’ or condo association to handle exterior maintenance. In fact, row homes have survived over a century without the HOA to “protect property values” and provide allegedly “maintenance-free” lifestyles.

Although some homeowners would prefer a smaller yard to maintain, that does not mean that homeowners reap any financial advantages by paying HOA assessments, under the expectation that their hard-earned dollars will be efficiently allocated toward necessary maintenance of common areas they do not own, and may not want. Nor does the “cluster development” model take into account disadvantages for homeowners, such as reduced privacy, insufficient access to parking, greater potential exposure for noise and odors from barely detached neighboring homes.  And, quite often, HOAs create additional financial liability for major infrastructure such as private roads, storm water management systems, or on-site water and sewage treatment facilities.


Conclusion: expand property rights for individuals, not special interests at the expense of individuals

So, is MA Bill H.1107 a good idea?

That depends on your perspective. If you’re a developer of or investor in residential housing, particularly multifamily housing that would qualify for affordable housing tax credits, then you will probably favor a statute that guarantees additional revenue opportunities. H.1107 will increase property rights for landowners that wish to develop denser housing projects.

If you have been elected to serve your local government, you seek to retain local control over your hometown, and you want to limit development of common interest housing that might not stand the test of time, creating more problems than it solves, you will likely oppose Bill H.1107.

And if you’re an individual taxpayer seeking an affordable home to rent or buy, particularly one that does not come burdened by the restrictions and liabilities of a mandatory homeowners or condo association, then you should oppose Bill H.1107. The bill puts the property rights of real estate special interests – HOA industry stakeholders who would most benefit from increased revenue potential – over and above the interests of individual taxpayers and property owners.


search previous next tag category expand menu location phone mail time cart zoom edit close