Sunday, September 11, 2005

Ministates An American Problem

Michelle Boorstein's article in the Washington Post, "Homeowners Groups Fight to Stay Afloat," brings up an ongoing problem with the federally-encouraged quasi-municipalities commonly known as homeowner associations: liability
Hidden Lake's problems mirror those cropping up at first-generation, association-run communities across the country as they deal with aging infrastructure and outdated or poorly written covenants that make it impossible to enforce rules, increase dues to cover rising costs or resolve disputes.

Today, with 80 percent of homes being built in such communities -- a percentage an industry group estimates to be even higher in the Washington area -- an entire body of law and expertise has sprung up to deal with such problems. Governing documents have grown from three pages to the size of telephone books, states have passed laws giving homeowners associations power to collect dues and place liens on homes, and real estate agents in many places are required to inform buyers about what they're getting into.

While I realize that HOAs are a popular idea with some libertarians, they are statist to the core, there are far better social mechanisms. There are many problems with HOAs which I find are of great concern and this article illustrates the short-term orientation of the bulk of HOAs: that of under-capitalization (one which most HOAs are dealing with now) which leaves them with a multigenerational transfer problem. HOAs have little capacity to evolve over time to allow second generation ownership without a significant loss of value and opportunity to maintain the capital to keep their homes, roads and parks going and allow change for the next generation of owners. Same problem as other municipalities. The only difference is that the others are recognized as state creations.

As Dr. Allan Carlson says in ""Baily Park" or "Greater Pottersville"?":
Even worse, it turns out, are the Neighborhood or Homeowner Associations, a new kind of informal governance that has recorded rapid growth at the same time as suburban family life has declined. A product of the 1960's, Homeowner Associations now embrace 50 million Americans. Using restrictive covenants and liens-on-homes to enforce their wills, these Associations are--in analyst Spencer MacCallum's words--far more "arbitrary, unresponsive, and dictatorial" than Zoning Boards in their control over the lives of residents. Commonly prohibiting everything from home offices to swing sets and picket fences, Homeowner Associations--in one critic's words--provide neither liberty, nor justice, nor domestic tranquility.

Thanks to Evan McKenzie for his mention of the Washington Post article in his blog, The Privatopia Papers.

Just a thought.
Just Ken
CLASSical Liberalism


Anonymous Anonymous said...

A LIBERAL BLEG [Jonah Goldberg]
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Posted at 04:35 PM

2:20 PM  

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