Do HOAs make homeownership more affordable and create better communities?

guest blog by Deborah Goonan

Followers of this blog and anyone that follows real estate news will quickly notice that reality stands in stark contrast to Community Association Institute (CAI) rhetoric.

For readers who are unaware, “community association” is CAI’s official terminology for what the rest of America knows a Homeowners’ Association (HOA).

Time to debunk some proclamations made in CAI’s 2013 Statistical Review (link below), and repeated annually in their publications that tout “How and Why Community Associations Work.”

Let’s start with this one:

“Expanding Affordable Homeownership. There has been a persistent effort to increase homeownership in America, especially in underserved groups, such as minorities, women and immigrants, and in specific locations, such as urban areas. Almost from their inception in the 1960s, condominiums have tended to serve as lower-cost housing, especially for first-time buyers. This was especially true of early condominium conversions, in which apartment buildings were refurbished into condominiums. Without the construction and operating efficiencies inherent in association development and operations, affordability would be an even greater problem.”

Really? But here we are in 2014, with regional and national homeownership rates back where they were a decade ago. Most buyers cannot afford homes at current prices. If you have been following the blogs here on Neighbors at War, then you know that Florida, only high-end condos priced at approximately $500,000 and up, are under construction – most of them are snapped up by foreign investors in cash sales. Another 235 or so condominium projects have failed and have been terminated, most converted to rental properties, kicking over 17,000 condo owners to the curb after forcing most of them to sell at a fraction of what they paid for their units prior to 2007. You also know that lenders now avoid underwriting mortgages for condos and HOAs, due to high rental to owner percentages, underfunded Association reserves, and, in some states, the fact that mortgage holders risk losing their entire mortgage interest due to super priority lien status for HOAs.

All of these factors have eroded any temporary gains in affordability for buyers. When you add to the mix the fact that HOA assessments have increased significantly in recent years, well, that just decreases affordability of “community association” living even more.

And how about this bit of marketing hype and political puffery?

“Building a Sense of Community. We are, for better and worse, a highly transient society. Americans follow professional opportunities and other preferences from state to state. By their inherent nature, community associations bring people together, strengthen neighborhood bonds and promote a sense of community and belonging—attributes that are often overlooked. Many residents take advantage of community-sponsored activities, such as holiday events, social clubs, athletic and fitness activities, pool parties and more. These activities help residents get to know their neighbors and forge new, supportive friendships. Social opportunities exist even in smaller associations that don’t have the resources or critical mass to sponsor formal activities. Many Americans make enduring friendships by serving on association boards and committees and volunteering in other ways.“

If you follow national or state HOA news and issues on social media – or read print media, or watch television media – it becomes clear that there is a great deal of conflict in many “community associations.” We’ve blogged about unfinished subdivisions, abandoned condominium projects, and the growing percentage of absentee owners and renters that hardly result “neighborhood bonds” or “enduring friendships.” No doubt you have read about lawsuits and foreclosure threats over a flag in a flowerpot and access to financial records, disputes over lawn ornaments or service dogs for the disabled, threats and physical altercations at Board meetings, tens or hundreds of thousands of assessment dollars being embezzled, tenants and owners having their vehicles towed from city streets. It is common knowledge that many HOAs cannot find anyone willing to serve on their Boards. The list goes on and on.

Additionally, the NJ Supreme Court has acknowledged that CC&Rs do not protect First Amendment rights. And FHFA has objected that HOA super-priority liens divert taxpayer dollars to private communities.

Are HOAs really working to improve housing affordability and quality of life in American communities? Do they benefit American taxpayers in general?

Or are increasing reports of the struggles and strife of HOAs making a mockery of CAI’s glowing self-evaluation?

You be the judge.

How and Why Community Associations Work (Community Associations Institute Factbook)



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Ward Lucas is a longtime investigative journalist and television news anchor. He has won more than 70 national and regional awards for Excellence in Journalism, Creative Writing and community involvement. His new book, "Neighbors At War: the Creepy Case Against Your Homeowners Association," is now available for purchase. In it, he discusses the American homeowners association movement, from its racist origins, to its transformation into a lucrative money machine for the nation's legal industry. From scams to outright violence to foreclosures and neighborhood collapses across the country, the reader will find this book enormously compelling and a necessary read for every homeowner. Knowledge is self-defense. No homeowner contemplating life in an HOA should neglect reading this book. No HOA board officer should overlook this examination of the pitfalls in HOA management. And no lawyer representing either side in an HOA dispute should gloss over what homeowners are saying or believing about the lawsuit industry.

6 thoughts on “Do HOAs make homeownership more affordable and create better communities?


    Community ‘Associations’ we’re doomed the minute the ink was dry on the blueprints. Sure, there may be some benefits, but the bad truly outweighs any good. The CAI knows these associations are simply a money pit for them, they are not ever to be trusted! In my personal opinion, the CAI is nothing but a crime syndicate.

    Usually the land that these condominiums sit upon is far more valuable than the condos themselves. Substandard construction, evil neighbors and a palortha of financial problems, should make the average person run!

  2. hoasavers

    Per an attorney I spoke to, I’m not the kind of person to live in an HOA so I sold…I don’t approve of unlicensed and unregulated HOA property management companies. No one is watching out for the owners, not enough owners question and watch the HOA, there is no where to go for help when bad behavior occurs from boards/mgmt companies – so you either sue, suffer or sell.

      1. hoasavers

        Owners that just pay their dues, don’t watch how their money is managed (nor show any signs of caring, besides an occasional thought of how something isn’t getting done), and keep their mouths shut. That’s the majority of people living in HOAs. Most owners have no clue what is going on.

  3. Nila Ridings

    To answer Deborah’s question:

    “OK, I will play Devil’s Advocate: What kind of person IS suitable for living in an HOA?”

    Answer: A corpse.

    In one form or another HOAs turn into a graveyard. They kill the spirit of loving thy neighbor or even being social. They kill the financial security a person works all their life to acquire. And they destroy physical health and happiness. When all that happens a person becomes the walking dead.


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