There’s a fascinating article in the Washington Post about how the foreclosure crisis is leading to increased segregation in American neighborhoods. The article is worth reading, even though it doesn’t directly target Homeowners Associations.
There are interesting implications, though. The big irony is that the modern homeowner association movement started in 1964 shortly after the Civil Rights Act was passed. White homeowners and developers recoiled at the thought of minorities moving into white neighborhoods and made sure subtle racial controls were woven into the HOA system.
The recent mortgage crisis hit HOAs especially hard with foreclosures being done both by mortgage companies and HOA boards. And there’s no question that many ‘private governments’ have used their ‘secret rules and powers’ to come down harshly on minorities. Keep that in mind as you read the Washington Post story, linked below.
“The study also uncovered another particularly alarming finding: Foreclosure rates during the housing bust were highest in the most integrated neighborhoods. So not only were we becoming more segregated — but the least segregated places were heavily undermined by foreclosure at the same time. The authors aren’t entirely sure why this would be, but the finding speaks to the relative fragility of rare, integrated communities.”
Where were the “most integrated neighborhoods?”
This country needs to start tracking sales of homes and residency in HOAs vs. outside of HOAs. It is hard to believe that, after 50 years and close to 70 million homes constructed, the Census department, our Housing agencies, and the National Association of Realtors are not classifying HOA homes in their databases, and incorporating that data into statistical research. Even as a buyer, it is virtually impossible to search home sale applications to exclude single family HOA homes. Why is that?
Here in FL, where HOAs are the norm, segreagation by community is blatantly obvious. There are some Associations here that conduct all of their meetings in a foreign language, because practically none of the owners speak English. The upscale condos are entirely segregated from the low-end “affordable” condos. Estate home HOAs are segregated from manufactured home HOAs and mobile home parks.
Not addressed in the WaPo article, but obviously a factor: the fact that developers continue to acquire “distressed” or “blighted” communities (some of them with HOAs, some without), so that they can be redeveloped into HOA’s with modern, but more expensive housing that only the affluent can afford. Definitely part of the reason for displacement and segregation patterns.
Here’s my theory for whatever it’s worth, Deborah.
The listings are not noted as HOA or Non-HOA because if they were the question would arise from the buyers…”What’s the difference?”At this point, the Realtor is faced with explaining that in exchange for every house being mandated to be beige with white trim, white vinyl windows, and white garage and front doors, the buyer will sign away their US Constitutional Rights. Possibly for the first time in their life they will become business partners with a hodgepodge of people that they have never met before. This group will include the drunks, drug users, insane, dishonest, belligerent bullies, and the meek and helpless, weak and weepy, the young, the elderly, the lost and lonely, and some with a criminal history. And many of these folks will be elected to determine how your new piece of real estate will be maintained or won’t be at all. They will also decide how to manage an annual budget of millions of dollars. As the buyer tries to digest these shocking revelations they might not comprehend that they will also become the guarantor on all debts, loans, lawsuits, settlements, construction defects, and disaster rebuilds incurred by the HOA.
When the buyer asks about the HOA-Free property and the Realtor says they will have city codes to follow but their neighbors will not rule and possibly destroy their lives. There will be no board of directors to bully them and have the power to fine, lien, and foreclose on their property just because they can, and if they want their front door to be purple with pink trim and yellow shutters around every window they can have that.
Stating the factual differences between the two would no doubt have buyers running from the HOAs.
Keeping the truth a secret until the ink is dry on the contract to purchase is pretty much the only way to rid the listing inventory of HOA properties! I guess you could say it falls under the “don’t ask and don’t tell” style of doing business.
In Florida, it the buyer asks for no HOA, the Realtor must sell from an empty wagon!