guest blog by Deborah Goonan
I have previously written about Community Associations Institute (CAI), an HOA trade group, and its three Federal issues (pet peeves). One of those issues is what CAI calls Disaster Relief Fairness.
You can check out CAI’s brochure on the subject here. See pages 9-10.
Community association homeowners pay federal taxes to fund emergency services and disaster response, but their communities receive little or no federal support in the wake of a presidentially declared national disaster. Association homeowners bear the financial and practical burdens of disaster recovery in ways that non-association homeowners do not. This leads to uneven disaster recovery in our towns and cities across the country and is fundamentally unfair to association homeowners.
Yes, we all pay taxes, so why should FEMA discriminate against HOAs?
On the surface, who can disagree with that? As readers are well aware by now, owners in Association-Governed Residential Communities are already double taxed. We pay for essential services provided by our Associations through assessments, but also pay for essential services to areas outside HOA boundaries by way of property taxes.
But, not so fast. To understand FEMA’s role in disaster relief, let’s look at the type of relief they are authorized to provide:
FEMA link explaining type of assistance available.
Basically, FEMA may provide assistance with temporary housing, relocation expenses, repair to primary residences, and emergency services that provide for basic needs immediately following the disaster. With regard to repair of a primary residence, assistance is intended to supplement insurance coverage, and, in FEMA’s words, “The goal is to make the damaged home safe, sanitary, and functional.”
The fact is, aid is only available if your home’s location is in a federally declared disaster zone. And the total amount of assistance available depends on what is appropriated by Congress. Assistance is divided into two categories: Individual Assistance and Public Assistance.
Individual Assistance dollars are intended to help individuals and households with various housing and disaster recovery expenses that have not been covered by insurance. FEMA will assist homeowners and tenants located in a disaster designated zone, regardless of whether their home is located within some sort of Association or not. The focus is on making sure the individuals involved have safe housing, but not necessarily guaranteeing that the assistance will enable the individuals to return to the same housing that was damaged in the disaster.
Public Assistance is defined by FEMA as follows:
Public Assistance (PA): Disaster grant assistance available for communities to quickly respond to and recover from major disasters or emergencies declared by the President
Emergency Work (Categories A-B): Work that must be performed to reduce or eliminate an immediate threat to life, protect public health and safety, and to protect improved property that is significantly threatened due to disasters or emergencies declared by the President
Permanent Work (Categories C-G): Work that is required to restore a damaged facility, through repair or restoration, to its pre-disaster design, function, and capacity in accordance with applicable codes and standards
Public Assistance dollars are earmarked for certain Eligible Applicants:
1. State Government Agencies
2 . Local Governments and Special Districts
3. Certain Private Non-Profit Organizations
4. Native American Tribal Governments and Villages
As you can see below, HOAs do not fit the criteria for the types of non-profit organizations eligible for FEMA Public Assistance: (because HOAs are not “open to the general public” and do not provide the specific public services specified below)
Private Non-Profit Organizations
Private Nonprofit organizations or institutions that own or operate facilities that are open to the general public and that provide certain services otherwise performed by a government agency.
These services include:
Colleges and universities
Parochial and other private schools
Systems of energy, communication, water supply, sewage collection and treatment, or other similar public service facilities.
Fire protection, ambulance, rescue, and similar emergency services.
Hospital, outpatient facility, rehabilitation facility, or facility for long-term care for mental or physical injury or disease.
Homes for the elderly and similar facilities that provide institutional care for persons who require close supervision, but do not require day-to-day medical care.
Other Essential Governmental Services
Museums, zoos, community centers, libraries, homeless shelters, senior citizen centers, rehabilitation facilities, shelter workshops and facilities that provide health and safety services of a governmental nature. Health and safety services are essential services that are commonly provided by all local governments and directly affect the health and safety of individuals. Low-income housing, alcohol and drug rehabilitation, programs for battered spouses, transportation to medical facilities, and food programs are examples of health services.
As an example, we can take a look at what’s going on in South Carolina now, in the wake of widespread flooding caused by record-breaking rainfall and the failure of dozens of dams, most of which are owned and maintained by private homeowner associations.
Current FEMA appropriations stand as follows:
Individual Assistance dollars obligated: $112.7 million
Public Assistance dollars obligated: $6.3 million, all of it earmarked for Category A and B only. That is, only emergency repairs, and not restoration.
What does this mean for residents, particularly homeowners in HOAs, Condominiums, or Cooperatives?
But remember, even though a single dam repair can cost hundreds of thousands or even more than a million dollars, HOAs will not be receiving any of that assistance, because they are private non-profit organizations that FEMA classifies as business entities. (Where have we heard that before?)
Recall that the original premise behind HOAs was to create new housing and increase the tax base of local governments, but with minimal impact upon that local government’s operating budget. In return, developers were granted dominion over private communities during construction, Association Boards were granted exceptional powers to manage community affairs without government interference, and homeowners were granted the supposed prestige and privilege of living in a more-or-less self-contained housing community.
At the time, when HOAs were still relatively new in America, there was a general discontent with how municipal governments were performing, and so certain stakeholders in the real estate industry decided that Associations could do a better job, and set out to sell that concept to millions of American home buyers.
Except that in South Carolina, homeowner associations did not do a good job of maintaining their dams. And the state’s regulatory agency, DHEC (Dept. of Health & Environmental Control), did not do a good job of regularly inspecting privately owned dams, nor following up on repair recommendations. In fact, SC barely even funded the DHEC, making it next to impossible for timely inspections of dams.
So the federal government and state government are more than happy to take tax revenues – property, sales, and income tax – to create all these agencies, including FEMA and DHEC. And local governments in particular seem more than happy to push privatization of essential services, giving Americans fewer and fewer non-HOA choices.
But then government agencies don’t do what they are supposed to do, and expect “private” HOAs to figure it out for themselves when disaster strikes. And that is definitely not disclosed to buyers or current owners.
News flash: That’s what privatization is all about!
Just for your reference, it seems that there is nothing to stop a homeowner, condo, or cooperative association from applying for a Small Business Administration loan, as an alternative source of FEMA assistance, albeit the kind of assistance that has to be paid back.
Apparently CAI wants Associations to be regarded as a mini-government in this instance. In this case, they want government interference in the form of FEMA grants and emergency assistance to repair common elements in condominiums and cooperatives, and also with debris removal for all homeowner associations.
So I suppose that if FEMA decides that HOAs are “governmental in nature,” and deserving of Public Assistance, then we should soon see major changes in governance policy. Surely, the federal government will require all Association-Governed Residential Communities to provide meetings and official documents that are open to the general public. Free Speech, Due Process, and all the rest of our Constitutional rights will apply, as they do in schools, universities, public housing, and medical facilities.
Bring it on!