Wayne County MI offers help for crumbling HOA private roads

By Deborah Goonan, Independent American Communities

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It’s rare when local governments actually make the effort to help homeowners governed by private property owners’ associations. (POAs of HOAs)

Most often, if the HOA was established with private roads – especially common for gated communities – the local government takes a “hands off” approach, expecting property owners to save for and fund their own ongoing maintenance and long-term repaving.

In theory, owners of homes along private thoroughfares will have saved sufficient cash over 20 – 30 years to be able to plunk down a substantial chunk of money when their roads need to be resurfaced. But the cost associated with road repair and reconstruction is often out of reach for private homeowners’ associations. Depending on the length, width, thickness, and slope of roads – and the overall size of the community – it could cost anywhere from $10,000 to millions to bring all roads back to acceptable standards. Few communities are able to save that much money.

To make matters worse, most HOAs offer relatively small jobs to road construction contractors, which translates into significantly higher per unit cost.

Some HOAs may opt to take loans to finance road projects, but that’s a very costly option when you add in high interest payments over time. And that assumes the Association can qualify for a loan in the first place. Many cannot.

Without a source of financing, a signficant number HOA subdivisions simply live with worn out roads that continue to deteriorate over time.

But in Wayne County, Michigan, a recent street repair program provided $3.8 million to 20 HOAs to help repair some of their worst roads. The City offered funds for HOAs that were willing to contribute just 20% of the cost, with the County paying 80% of the bill.

Crumbling streets get $3.8M facelift

Street repairs totaling $3.8 million are occurring across Canton this summer, ridding some neighborhoods of crumbling pavement and car-rattling potholes.

In all, 20 subdivisions cashed in on a chance to pay just 20 percent of street-repair costs while Wayne County paid 80 percent of costs.

“We love the fact that Wayne County is contributing $4 for every $1 we spend,” said Joe Files, treasurer of the homeowners association for Brookside Village subdivision No. 5, near Palmer and Lotz.

Files described the streets as “not very good” — the reason Brookside plunked down its share for a $281,250 project made possible by a Wayne County townships initiative that brought $3 million in aid to Canton, alone.

Construction crews in some subdivisions have ripped out crumbling streets and replaced large sections with new concrete, while other homeowner groups opted for smaller-scale repairs. Still other neighborhoods received new asphalt paving.

“I think it’s great for residents — no question,” Canton Municipal Services Director Tim Faas said.

The county aid averted much higher costs that homeowner groups could have faced to fix local streets. Although Wayne County has jurisdiction over township streets, officials say the county simply doesn’t have the money to repair all streets.

Read more:
http://www.hometownlife.com/story/news/local/canton/2016/08/26/canton-street-repairs-underway/89404398/

 

Kudos to Wayne County for this common sense cost-sharing approach. It’s a partial solution to a growing problem across the U.S.

But it’s not clear whether the program will continue in the future.

It’s ironic that part of the sales pitch for private communities was that these HOAs would provide higher maintenance standards than their city-maintained neighborhoods. Clearly, it was a short-sighted, unrealistic marketing campaign to sell millions of homes on private subdivision roads. Local governments thought they were gaining a tax revenue windfall, while home buyers thought they were buying a little piece of suburban Utopia.

 

Other private roads

But in addition to HOA subdivisions with crumbling roads, it seems many local governments are also dealing with pleas for assistance from homeowners in non-HOA neighborhoods, also located on private roads. Those homeowners face an even larger obstacle, since no Association was ever created to even begin the process of setting aside funds to fix their roads.

Here are some examples:

Homeowners Continue To Struggle With Unimproved, Private Roads (NY)

http://www.27east.com/news/article.cfm/Hampton-Bays/130903/Homeowners-Continue-To-Struggle-With-Unimproved-Private-Roads

 

Private vs public’ road repair (AL)

http://www.waff.com/story/31477530/private-vs-public-road-repair

 

Hodgepodge of homemade repairs make for rocky road in Davie (FL)

http://www.sun-sentinel.com/local/broward/fl-davie-private-road-20150514-story.html

 

All of this highlights a larger nationwide problem of how to deal with crumbling infrastructure, starting with our local roadways and – closely related – storm drainage. Adding to the challenge is the fact that we keep creating new roads and building more homes in denser communities, all the while neglecting more mature neighborhoods where taxpayers have been paying into the system for decades with little return on their investment.

While it’s clear that everyone will have to share in the cost of rebuilding our aging roads, the patchwork approach of assigning financial responsibility to millions of private homeowners clearly isn’t working.

 


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