Is there any good reason to keep HOAs? Here are some people who want out.

By Deborah Goonan, Independent American Communities

Despite the industry’s claims that most people are happy with their HOAs, there are more and more reports of people who are very dissatisfied. This website is chock full of examples of unhappy homeowners and residents, and association-governed communities in a perpetual state of conflict or chaos.

Some are so fed up, that they are either disbanding or looking for ways to dissolve their mandatory association.

For example, Spring Creek Association, located near Elko, Nevada, is currently researching its options to do away with the HOA, in favor of becoming an improvement district or incorporating as its own city. According to the Association’s website, Spring Creek‘s residency now rivals that of nearby Elko.

Homeowners are finding it difficult to maintain 150 linear miles of roads, and are no longer interested in aging recreational amenities geared toward a few horse owners and golfers. Police, fire, and emergency services have become a big concern. For all of these reasons and more, Spring Creek sees less value from the homeowners association.

The community recently announced a town hall workshop to discuss facts and figures with economic experts.

Spring Creek seeks input on incorporation

Toni R. Milano, March 30, 2017 (Elko Daily Free Press)

SPRING CREEK – Should Spring Creek become its own city? Or should it remain a homeowners association? What would the financial pros and cons be transitioning from an HOA to an incorporated town?

Property owners are invited to a workshop and special meeting of the Spring Creek Association Board of Directors, 9 a.m. to noon, Saturday at the Fairway Community Center.

Key findings from Hansford Economic Consulting (HEC) include financial and governance comparisons between the current HOA and a possible incorporation or general improvement district, said SCA President Jessie Bahr.

Subjects including autonomy, ease of formation, ease of administration, sources of revenue, authority to issue debt and governance will be presented during the meeting, said Bahr.

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In the meantime, several HOAs have ceased to exist in Orlando. Most of these are older, voluntary associations established in the 1970s and 1980s, precursors to the more modern mandatory HOA.

And although common maintenance and irrigation systems are now somewhat lacking in Sand Lake Hills, many homeowners are relieved that their neighborhood HOA is no longer watching their every move, ready to nag them about the length of their grass or their choice of paint colors.

As you read the Orlando Sentinel article below, you may want to take it with a grain of salt, as this is a feature in the Real Estate Classified Section of the newspaper. Given the bad press for HOAs and condo associations lately in Florida, the article reads a bit like PR in favor of aesthetic standards and maintenance services provided by HOAs. Perhaps that is just a coincidence?

The truth is, the current “decline” in Sand Lake Hills is easily reversible once the City starts enforcing local codes and ordinances, and  as soon as individual owners either install their own irrigation systems or change their landscape to something drought tolerant or Florida Friendly. And they need not worry about being sued over their personal aesthetic tastes and preferences.

And as more of these mature neighborhoods shed their HOAs, there will be an increased number of housing options without “Big Brother” encroaching on property rights.


As homeowner associations disband, some residents cite decline

Mary Shanklin
Orlando Sentinel

Less than a mile from Orlando’s so-called “restaurant row” on Sand Lake Road stands a community divided.

On one side of Banyan Boulevard are East Bay neighborhood homes with lush green lawns; on the other side are Sand Lake Hills houses with yards filled with sand and patches of grass. East Bay is a section of Sand Lake Hills and has its own mandatory homeowners association. Sand Lake Hills no longer has an association.

A few Sand Lake Hills residents park trucks in yards and boats in driveways. One front yard has hip-high dead shrubbery. And, with no irrigation for public spaces, dead trees claim an open area.

“I can tell you that in this development, there are some of the homes that are more rundown that others. Yes, that’s what happens when you buy in a neighborhood that doesn’t have an HOA,” said Jeffrey Busch, who initiated a 2008 lawsuit that dissolved Sand Lake Hill’s voluntary association in 2014. “But people find out real quickly that living in HOAs is like living with big brother.”

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Why do some want to cling to HOAs?

Proponents, many who work in and serve the industry, say that the association-governed community is an established institution that will continue indefinitely.

But they fail to recognize that an increasing number of housing consumers are dissatisfied with a residential housing market that lacks the kind of homes people actually want. Consumers want a home that is not just affordable to buy, but also affordable to own once it is no longer new. Between the epidemics of poor construction and out-of-control assessment increases, association-governed common interest housing is becoming a less attractive option.

In addition, negative public opinion of HOAs and condos, although poo-poohed by the industry, cannot be ignored. Today’s housing consumers define property values differently – gone are the days when the majority of buyers clamored for cookie cutter construction, manicured lawns, and homogenous neighborhoods. Most bristle at the idea of a developer, a property manager, or their own neighbors micromanaging how they live their lives in their own homes.

Fewer and fewer home buyers are willing to pay extra to live near a golf course or a private lake. And many are unwilling to pay for what it actually costs to maintain a private community pool, tennis courts, and sports facilities.

Others claim that the private sector builds and manages better-quality, more attractive subdivisions than the public sector.


What if…?

The real reason modern HOAs are mandatory is that they provide maintenance and security services that would otherwise fall to the local government. But if those services were cost-shifted back to the public realm, there would be no compelling reason for the HOA to exist in its current mandatory form.

A lot of the amenities could either become part of public park and recreation districts OR could be purchased outright by entrepreneurs and offered as membership clubs.

Either way, your former HOA community would still have access to those services but without mandatory assessments, and, more importantly, without tying tremendous financial risk and liability to the title of your home.

You would pay your property taxes, and no longer need to be concerned that a nasty lawsuit, a corrupt board member, a natural disaster, or a fire could literally bankrupt your community and cause irreparable harm. No more developer control. No more property manager – attorney alliances stacked against hapless homeowners. No risk of hostile takeover of your home or even your community by a rogue group of real estate investors looking to cash in on your equity.

As for multifamily housing, perhaps the US needs to reconsider European-style cooperative housing, where decisions are made by consensus rather than creating a hierarchy of board members to essentially rule over the members. Cooperative members screen new members to make sure they are a good fit — can they afford to contribute their fair share of money and time to the cooperative? If so, great. If not, then perhaps being a traditional tenant is the way to go. A lot of condominiums have converted to rental apartments, and with good reason.

I hear from owners all over the country that are decidedly not apathetic. And even with support from neighbors, it becomes extremely difficult to replace an entrenched board, especially if they have something to hide.

Of course, industry trade groups such as CAI (Community Associations Institute) will continue to promote Association-Governed common interest communities. After all, they are primarily interested in self-preservation of the multibillion dollar industry.

Perhaps home builders can be persuaded to build more of the non-HOA housing the public demands, if the local government allows it, and stops worshipping developers as some sort of tax-base creation gods.


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