Wednesday Wisdom: Follow the Money

In American there are an estimated sixty million homes in over 300,000 condominiums, cooperatives, and planned communities, all with their own sets of governing documents.   Almost one half of the homes in the US are in HOAs

Why are there HOAs ? – Follow the money

In 1960’s the Federal Housing Administration (FHA), the most popular source for home loans, was given  authority to insure mortgage loans in states with appropriate laws which created private incorporated corporations (HOAs) to assure the values of properties.

The swell of HOAs was dominated by large-scale corporate "community builders” who gave the middle class a “country club lifestyle”  of parks, pools and private amenities and the rules and regulation to address the concern of a neighbor disassembling a car in their driveway.  The shared cost of the amenities created an affordable  place where you and your family could live, work and play. 

Growth of HOAs?  - Follow the Money

The expansion of the HOA design concept was not the brain child of the developer, but the mandate of government.   Municipal entities benefited from the tax revenue and relief of maintenance and repair responsibilities.  

Municipalities  save money  by shifting the burden for streets, lights and perimeter walls, as well as flood channels and parks to the private corporations  (HOAs)  This shift allows for smaller government because the cost to enforce compliance and maintenance responsibilities  of the private amenities,  built  by a  private development company,  for the benefit of  private individuals who bought in the community,  falls to the  HOA.

Corruption of HOAs?  - Follow the Money

To be continued…

    

· We need remember that HOAs are private corporations, contractually set up -  Corporations need wise leadership  not people who have an axe to grind or a self serving agenda - People who will be responsible to the people who live in their neighborhood.  - People who are there to look out for  the best interest of all the members.

·        We need to accept and embrace the idea that all HOAs are not the same, with the same design, resources, costs and income.

·        We need to work toward allowing this individuality while supporting the differences of their design and operations.

·        We need to find a way to allow HOAs to function as they were intended in accordance with their governing documents

·        We need to  stop the efforts to micro-manage through legislation to solve individual problems for individual communities.

·        We as neighbors need to learn how to live, work and play together.