How about some truly affordable non-HOA housing options?

By Deborah Goonan, Independent American Communities

Let’s explore some practical affordable housing options, looking outside the HOA Box.

For more than forty years, real estate stakeholders have promoted their ideal of the association-governed corporate community. The trade groups at the forefront of this 50-year-old housing experiment have managed to build more than 344,000 association-governed communities, housing more than 70 million residents. According to estimated statistics provided by trade group Community Associations Institute (CAI), in 1970, there were only 10,000 HOA communities housing 2.1 million residents. CAI estimates that 22% of the U.S. population now resides in an association-governed community.

However, the time has come for housing policy makers and planning commissions to consider alternatives to privatized governance of planned communities and collective – corporate housing models. It is now abundantly clear across the nation that, with the exception of the most affluent real estate developments, association-governed common interest communities are plagued by economic, financial, and social dysfunction.

Fight over money

The problem

The majority of middle class, working class, retirement, and affordable housing collectives and planned communities experience unstable management, internal social and political conflict, and financial distress due to inadequate collections and underfunded reserves.

As a result, many HOA, condo, and coop associations are woefully unprepared to repair or replace community infrastructure. Owners of units in multifamily structures often delay maintenance due to the inability or unwillingness of a majority of owners to pay the high cost of repair and renovation.

Quite often, when faced with growing assessments and the first signs of deferred maintenance, homeowners with ample financial means will choose to either sell or rent their properties. The lucky ones are able to move to newer, better housing.

Remaining property owners often struggle to pay their share of assessment revenue to keep the community afloat. The community soon finds itself in a perpetual deficit.

Unless an investor shows an interest in redeveloping the community, the pattern of disinvestment continues, resulting in typical patterns of blight and crime, which, ironically, the association-governed model was originally designed to prevent.

Even in communities that remain financially solvent, too many governing boards or developer-controlled associations tend to adopt a culture of selective rule enforcement, non-transparency, exclusivity, and division.

For many law firms, HOA controversy is a perpetual rain maker, creating an endless revenue stream of billable hours. For local governments, association-governed communities are cash cows, because they are supposed to provide much of their own maintenance, code enforcement, and security services.

Homeowners pay for duplication of services in the form of property taxes plus assessments to their associations. Essentially, they often pay more money, for a lower overall level of service. Yet they must also compromise their private property rights and civil liberties for the so-called privilege of living in their private community.

The truth is well-documented here on IAC: pervasive problems in our association-governed common interest communities defy practical and long-lasting resolution. Indeed, most housing policy and legislation in the U.S. is intentionally designed to benefit financial stakeholders in the real estate industry. Dare I say that any benefit to housing consumers, taxpayers, and voter constituents is purely incidental.

It’s no wonder that more and more housing consumers are seeking to avoid covenants, restrictions, and the endless bureaucracy of HOAs, as well as the unpredictable financial risks of owning a condo or co-op.

These days, “no HOA” is a Realtor’s selling point on home listings.


No money empty pockets poor

Obstacles to affordability

At the same time, it’s important to address the fact that, in many of America’s large cities and fast-growing metropolitan areas, housing is unaffordable for a large percentage of residents.

While there’s no single solution to this problem, there’s no doubt that the U.S. needs housing policy changes at local, state, and federal levels. And part of the process of change will inevitably involve changing the hearts and minds of Americans who have become so fearful of decreasing property values, that they have forgotten about more important human values.

Bring back the roommate

For example, let’s explore the option of living with a roommate — these days also known as “home sharing” — so that both homeowners and the tenants can save money and live more comfortably.

Prior to the 1990s, it was common for recent high school or college graduates, just entering the job market or starting their careers, to share the rent of a two bedroom apartment. It was also fairly common to rent a duplex apartment, with the owner-landlord residing in the other half of the home.

More recently, in the wake of one of the worst recessions in U.S. history, it was common for families and friends to share space in one house, out of necessity to make ends meet. Housemates worked out their own arrangements for cost sharing, either through formal or informal agreements.

These arrangements worked, for the most part, until housemates were able to get back on their feet financially.

Then, within the past several years, homeowners and condo associations began adding or amending rental restrictions. They also started enforcing rules about how many unrelated people can live in a home.

In addition to requiring a minimum length of lease (usually 6 months or more), some condo associations won’t allow more than 20 or 30% of all units in the community to be rented. (If the rental unit maximum has already been reached, you won’t be able to rent your home.) And most condo associations, as well as some homeowners’ associations, don’t allow owners to “home share” by leasing a spare bedroom in their home or condo.

Therefore, even though it’s a simple solution, the following home-sharing project in southwest Florida might face significant challenges.

Pilot project to encourage home sharing in Sarasota

By Barbara Peters Smith
Staff Writer, Herald Tribune

Posted Aug 19, 2018 at 8:19 PM
Updated Aug 20, 2018 at 6:57 AM

In the midst of a housing shortage, Southwest Florida is home to a higher-than-normal share of empty bedrooms.

This community’s surplus of retirees has shaped our local quality of life in ways that are a cinch to see: the cultural offerings, the flourishing service economy, the relative peace and quiet.

But another significant impact of our demographic profile remains out of sight, behind drawn curtains and subdivision gates: In the midst of a housing shortage, Southwest Florida is home to a higher-than-normal share of empty bedrooms.

Every third house, apartment or condo in Sarasota County has just one person living inside. In almost 60 percent of these households, the single occupant is 65 or older.

That’s well above average for the nation — where 27.7 percent of all housing units contain solo residents, and 37.5 percent of those residents are 65 or older. As housing costs across the country drift out of reach for Americans in essential fields like health care, education and law enforcement, nonprofit programs have popped up to facilitate home-sharing arrangements between isolated older householders and cash-strapped younger housemates.

Read more:

In case you missed it, I recently posted several examples of Fair Housing violations involving association-governed and retirement communities — an unmarried couple and same-sex partners both face opposition from their chosen communities, because they don’t meet the arbitrary ideal of “family.”

Yet for every successful home sharing agreement, at least two individuals have affordable housing. It’s a simple solution that actually solves a problem without using a dime of taxpayer dollars to subsidize rent and pay for private property management of affordable housing developments.

Cottage home small tiny
( free image)

Build smaller homes

As for the proposed Tiny House community in Wichita:

Tiny homes controversy continues; Opposition receives harassing, threatening messages

Posted: Aug 20, 2018 6:25 PM EDT
Updated: Aug 20, 2018 6:25 PM EDT
written by Monica Castro, KAKE

The controversy surrounding MicroMansions, a tiny home village, is growing more heated.

Jonathan Endicott, who has been vocal against the development, says he’s received harassing and threatening emails. He said, “The email was definitely concerning and it talked about threatening me, my family and my business. It mentioned that they owned Wichita and that they’re powerful. They have a lot of money and connections and they would attack me if I didn’t stop opposing the tiny home development.”

We have a copy of the email that reads, “We’re going to tell you this one “leave Micro Mansions alone.” If not, we will use all of our resources, money and means to stop you. You’re dealing with powerful people that have no problems attacking your business, life and family if you choose not to stop. This is the first and final warning. Stop all efforts of opposition against Micro Mansions now. You think $4000 on GoFundMe is going to stop us? We own Wichita, good luck with that.”

Read more (video):

It’s clear that vocal neighbors are using their HOAs to oppose Micro Mansions “Home Base,” fearful that their property values will plummet if 90 tiny homes are built nearby.

Now it’s getting ugly.  Someone is threatening the opponents of new development.

As explained in my previous post, I’m skeptical that Tiny Houses are “affordable” in comparison to existing homes in Wichita, and even more concerned that the HOA would not be able to generate enough assessment revenue to be self-sustaining.

After all, each new Micro Mansion home includes the cost of land, which is a substantial chunk of the purchase price. And common sense tells us that the type of buyer that is likely to buy a tiny home probably cannot afford to pay increasing assessments as the community’s infrastructure ages.

(And if the Tiny Home is sold without ownership of a lot, then the homeowner must pay rent to the landowner, in addition to a mortgage, taxes, and insurance.)

And, looking at typical community association life cycles, when a homebuyer decides after a few years that it’s time to move to a bigger house, the property is likely to become a rental unit, with an owner that has a limited vested interest in the community.

But, I want to clarify that I am not opposed to smaller homes of more realistic proportions, nor am I opposed to Accessory Dwelling Units (ADUs) placed in the back yard of an existing home.

In so many real estate markets, virtually all new home construction comes in two HOA Boxes:

  • Spacious single family homes priced well beyond the reach of buyers with median household incomes, most with deed restrictions and HOAs
  • Multifamily homes — townhouses or stacked condos — that are less expensive to purchase, but expensive to own, when you add in the cost of HOA and condo fees.

What if a home buyer actually had another option?

Think about how much more affordable new homes would be if local governments were willing to change their zoning policies to permit 2 or 3 bedroom detached homes of 800 to 1,600 square feet on smaller lots, and — this is key — without unnecessary deed restrictions and HOA fees!

Would neighboring communities, especially upscale HOAs, object to modestly sized starter and downsize homes, too? Even if these are the most likely future homes of their children, grandchildren, or aging parents?

Think about it.

Bungalow home small tiny
( free image)

Accessory Dwelling Units – many options for homeowners

And that brings us back to the option of the ADU. Here’s a classic example of narrow-minded opposition to an ideal, cost-effective housing solution for rebuilding an entire community after a devastating wild fire:

Larkfield resident considers lawsuit over Mark West Estates ‘granny unit’ ban


Nick Moen has a plan for his fire-scarred property in Sonoma County that suits his family’s needs and would result in exactly the kind of housing that local and state officials want developed.

Moen wants to rebuild his Larkfield home, one of the nearly 5,300 Sonoma County homes destroyed in the October fires. And he wants to add a granny unit, with its own kitchen, bathroom and living quarters, on his property for his mother-in-law.

But that’s where his plan has been stymied: A majority of residents in the homeowners’ association for Mark West Estates voted in January to implement a full ban of all accessory dwelling units, or ADUs. In the coming weeks, Moen has a mediation hearing with the homeowners’ association.

His case could have broader implications across the state, as homeowners seek to leverage elected officials’ push for more housing against the limits proposed by HOAs, which set rules that apply to an estimated 6 million Californians.

Read more:

Does it make sense to limit homeowner options by banning ADUs? A small guest cottage or garage apartment can provide the ideal housing solution for the landowner now, and, in the future, for young adult children or an aging parent. The ADU can also provide an affordable, private rental unit for a tenant, while helping the homeowner with monthly expenses.

And, unlike building a new home in a tiny house community, the cost to build an ADU is relatively low when the land is already owned.

So, allowing individual property owners to add additional living space in the back yard helps to solve the affordability problem, one or two households at a time, without the need for millions of dollars in private investment, and avoiding the heated controversy of mass construction of unsustainable Tiny Home communities.

If only 5 or 10% of homeowners choose to build an ADU, it could go a long way toward reducing the mounting need for affordable housing.

The biggest obstacles to practical  affordable housing solutions: public perceptions that building smaller homes or allowing home sharing in the neighborhood will reduce property values.



Statistical Review: Summary of Key Association Data and Information (Community Associations Institute)

APCHA sending surveys to gauge HOA finances (Aspen Times, August 16, 2018)

A Community Association’s Four Stages of Life (Tyler Berding)

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