HOA Stats and Surveys

By Deborah Goonan, Independent American Communities

From time to time, Community Associations Institute (CAI), issues news releases and email blasts, claiming that “objective” surveys prove the majority of Americans who reside in homeowners,’ condominium, and cooperative associations are “overwhelmingly satisfied” with their community association experience.

Naturally, the community management sector of the real estate industry desperately wants policymakers and housing consumers to believe that association-governed, common interest community residents are quite happy with the product and services they sell.

But savvy consumers and responsible Legislators shouldn’t put too much faith in homeowner associations (HOA) satisfaction surveys conducted by and for a trade group whose Trustees make billions of dollars annually, “serving” association-governed, common interest communities.

In the opinion of many knowledgeable consumer advocates, this author included, CAI’s self-funded HOA surveys are a public relations ploy.

Each survey is a deliberate effort to selectively collect and report data, for the purpose of propping up CAI’s special interests.

Presenting the community management industry’s impact in the best possible light, CAI hopes Americans far and wide will accept the trade group as the leading authority on how American communities and private property should be governed.

Now for a common sense reality check.

Should a consumer put a great deal of trust in the results of an organization’s self-sponsored consumer satisfaction survey?

Probably not.

After all, any commercial or nonprofit enterprise can claim its customers are satisfied. But in the absence of numerous believable testimonials and good personal references, such claims are likely to be nothing more than empty promises.

 

The trouble with HOA resident satisfaction surveys

Any consumer satisfaction  or public opinion survey can produce incomplete data, leading to inaccurate conclusions. The reliability of any survey is based upon how the survey process is manipulated.

Election polls are a prime example of what can go wrong when surveying the American public.

Likewise, critics point out that CAI survey results are likely to be biased by several factors, including:

• Questions asked vs. unasked
• How, when, and where the questions are asked (leading or loaded questions are common), and
• Who is answering the survey questions?

Readers interested in an in-depth discussion of CAI’s survey can learn more from this 2014 podcast:

On The Commons Shu Bartholomew with Deborah Goonan. (1-hr. Radio PODCAST) Join us as we discuss just 3 of the most often repeated fallacies about HOAs. Myth #1, CAI represents homeowners – Myth #2 HOAs are the purest form of democracy and Myth #3 – Survey says…. homeowners are overwhelmingly happy with their HOAs.

U.S. Census statistics and NAHB surveys shed light on the truth about HOA resident satisfaction

Here on Independent American Communities (IAC), readers will also find several articles documenting the truth: Based upon U.S. Census data and market surveys done by the National Association of Home Builders, consumer demand for HOA, condo, and co-op property is leveling off or dropping.

For example, according to the U.S. Census Survey of Construction (SOC), the percentage share of new single family detached homes sold has remained steady, in the range of 71-73%, since 2013.

Regionally, a homeowners’ association exists for only about one third of new detached homes sold in the Northeast, and a bit more than half of homes sold in the Midwest. But in the South and West portion of the U.S., an HOA governs at least 3 out of 4 new homes.

Townhouse sales are up slightly over the past two years, but attached single family dwellings have represented roughly 11% of new home sales since 2013.

According to a multifamily SOC report, last year, less than 7% of apartment-style stacked units for were built for sale. Since the great recession of 2008, traditional apartment rental units have accounted for nearly all new multifamily construction.

In other words, new construction of condominium and cooperative units remains at less than half of 1999 levels. In 2017, an estimated 22,000 new condo and co-op units were built, about one-sixth of the new construction boom of 2006, when the construction industry produced 127,000 new units for sale.

If Americans are so in love with community associations, it’s not reflected in new construction and sales data.

 

 

 

Limited choice of non-HOA housing for many consumers

CAI has been fond of saying that more than 60 million Americans have “accepted” community association living.

But in many housing markets, particularly in the South and West regions of the U.S., the market is saturated with HOAs and aging condominiums.

The real reason most people buy or rent in one of these “communities” is because, in many of the fastest growing housing markets, they really cannot avoid doing so.

Fast-growing U.S. housing markets are supply-side driven, because, for the past three decades, virtually every new residential development approved by local government planning commissions — if not a condominium or housing cooperative — has been required to establish an HOA.

This fact has been widely reported: local governments mandate (or de facto mandate) HOAs so that they can pass on to future homeowners the expense of building and maintaining new community infrastructure.

As a result, developers and home builders pass on construction costs to home buyers, incorporating those costs into the sale price of new construction. This explains, in part, why housing, especially new construction, is unaffordable for so many Americans.

In the short run, shifting the cost of public services to private communities has allowed elected officials to avoid raising property, sales, and income taxes. But housing consumers — including owners and tenants — have paid a high price in the long run, in the form of rising HOA assessments and rents.

Homeowners have been slammed especially hard, since they are also effectively “double taxed” for certain public services that are provided by their associations instead their city or county governments.

Not surprisingly, Census data also confirm that, if the option is available, home buyers are most likely to build their new home in a location that is not governed or financed by an HOA.  SOC “contractor-built” and “owner-built” home statistics show that 70-85% of land owners avoid the HOA.

 

 

The truth is, most housing consumers don’t actively seek out HOAs.

Even CAI’s own data supports this conclusion, although this statistic is not emphasized by the trade group’s PR team.

In a 2016 survey, CAI asked:

The response was less than stellar. Only 32% said they were more interested in residing in an HOA, 8% said they were less interested, and more than half, 58%, said that the presence of an HOA had no impact upon their purchase or lease decision.

In other words, even CAI’s own survey data suggests that only 32%, at best, actively seek out association-governed, common interest communities.

And, although CAI chooses not to mention it, according to a 2014 CAI survey, nearly one in four homeowners reported a “significant” disagreement with their association, either related to restrictions or finances.

Worse yet, only half of those disputes were satisfactorily resolved, 12% were unresolved, and 36% of homeowners reported dissatisfaction with the outcomes of their disputes.

 

Further reading:

See the “HOA Stats and Surveys” tab on this website