guest blog by Deborah Goonan
To further challenge the misguided notion that buyers, owners, and residents in HOAs need no federal legislative policy, we will now examine what NAHB is doing on the Congressional level. Although NAHB’s scope and mission is more broadly defined, and encompasses the multi-family rental sector, a significant portion of new residential construction designed for home ownership will undoubtedly be governed by HOAs. Therefore, this analysis has relevance to HOA Reform efforts.
In March 2014, NAHB conducted its “Bringing Housing Home” campaign. Regional conferences were held for the purposes of allowing NAHB members to meet with their respective Congressional leaders to discuss important federal issues for home builders.
NAHB addressed four Priority Issues:
1) Housing Finance Reform:
On this issue, “NAHB has made recommendations to Congress outlining a plan by which Fannie Mae and Freddie Mac would be gradually phased into a private-sector- oriented system, where the federal government’s role is clear, but its exposure is limited.”
NOTE: While CAI appears to oppose expanded privatization of mortgage financing, for fear that such a system would result in unfavorable lending standards for HOAs, NAHB appears to more fully embrace it.
While both NAHB and CAI insist upon a federal role in housing finance, they fail to support a federal role in oversight of governance and management standards for those communities.
2) Immigration reform:
NAHB states that “foreign-born workers account for 22% of the construction labor force nationally,” and NAHB contends there is a current labor shortage. Therefore, NAHB favors an immigration policy that will remove the current cap of 15,000 immigrants for construction industry. They further urge Congress to enact legislation “… preventing state and local governments from creating their own versions of verification requirements for employers. This is essential for any business that operates in multiple states.”
If NAHB is successful in convincing Congress to relax E-Verify standards for immigrant construction workers, what might this mean for HOA buyers? NAHB seems to be making the argument that labor shortages are driving up construction costs, but does not state that increasing the labor supply will result in lower sale prices for buyers. At this point, there does not appear to be a shortage of available homes for sale. The main purpose of NAHB lobbying appears to be aimed at reducing labor costs for home builders.
Yet there are no legislative efforts by either CAI or NAHB to reduce operating costs for HOAs. Indeed, Developers and CAI-backed HOA Boards want to maintain carte blanche on their ability to generate revenue from homeowners the form of regular and special assessments. It is up to owners in HOAs to press Congress for reasonable limitations upon the HOA’s ability to demand ever more money, with nothing to show for it.
3) Tax Reform
NAHB favors maintaining the Mortgage Interest Deduction on first and second homes, and maintaining Low Income Housing Tax Credits for construction of multi-family rental housing.
So why not extend a comparable tax deduction to homeowners in HOAs for assessments – at least the portion that pays for services that would otherwise be provided by local governments? After all, to some extent, HOA homeowners are subject to double taxation. Why should non-HOA taxpayers of similar size homes have a tax advantage over HOA homeowners?
4) Flood Insurance Reform
NAHB successfully lobbied Congress to pass legislation that keeps flood insurance rates affordable in the short term, while buying more time to reevaluate flood maps.
On the surface, that appears to be a good thing for some homeowners in high-risk flood zones. But at the same time, this new legislation has not provided any mandate or disincentive that would prevent Developers from continuing to build in flood prone areas. In the future, inevitable increases in rates will hit HOA owners hard. If FEMA continues to remain underfunded, all taxpayers will feel the pinch.
In conclusion, for every major federal legislative issue that CAI and NAHB pursue, there are related or competing federal issues for HOA owners and residents that have been largely ignored for decades.
Isn’t it high time we change that trend?
(link to NAHB assessment of 2014 election)
(link to NAHB Federal Lobbying Campaign)
Again, Deborah I see you hitting the bull’s-eye on yet another negative aspect of HOA home ownership.
Until the reform advocates occupy the other side of the table, the CAI and the NAHB are going to have 100% influence on the legislators. Nobody, legislators included, can make a fair decision or even an educated one without hearing both sides of the argument.
Never has there been the HOA victims side of the table. We need to work on making that happen. United we will make a difference.
In the meantime, planning a visit to the travel trailer dealership is moving up on my priority list! Parking in the middle of a flood zone can be easily remedied by hooking up to the trailer hitch and pulling out!
Americans of all ages, income levels, and circumstances need suitable housing. That means we need OPTIONS other than HOA communities created primarily for the benefit of “stakeholders” – developers, investors, service providers, and governments.
American housing policy pushes home ownership and ignores the need for rental properties and low-income, public housing. It displaces people who cannot afford to pay property tax and high sales tax on big ticket items with gentrified housing developments and high end commercial properties.
Quality housing is a fundamental American need. So are our Constitutional rights to property ownership, free speech, freedom to express religious and political views in our own homes. Our rights to due process and fair elections and voting are basic foundations of American government, but entirely absent for 65 million people who reside in HOAs.
The industry has pushed their agenda from the top-down from the beginning, and continues to do so. Every major industrial and professional sector in the US does this – insurance, banking, pharmaceuticals and medical supplies, doctors, attorneys, agriculture, energy, etc. NAHB and CAI are at the helm for American Housing, along with ULI, FHA, HUD. Everyone is at the table, except homeowners and resident taxpayers who have to live with the mess created and perpetuated by all the other parties with their disparate interests. In my opinion, that needs to change.
I think one thing important would be a law that special housing especially sec 8 have the exact same enforcement rules so they pay equal fines. Our development it is doubtful that they get inspected at all while ours is inspected 4 times a week. We have a hole in the street which is clearly leading to a major failure in the road but months of telling by the different homeowners has not even been responded to. Our HOA was just sold so there is hope the rats see the handwriting on the wall and are leaving. I think it might have more with the developer had to take a back seat so the owner saw it was a good time to leave without the voting blocker of the developer to back the old hoa..
NAHB top priorities link