guest blog by Deborah Goonan Independent American Communities
Community Associations Institute (CAI) just released 4 White Papers, Community Next: 2020 and Beyond. The reports are a product of 4 separate hand-chosen panels. For the most part, CAI’s talking points rehash the same old mission. In CAI’s words:
CAI and its chapters—will always be focused on maintaining and improving property values and making communities preferred places to call home. That means collecting assessments, enforcing rules and restrictions, providing quality leadership and more—no matter what external forces influence associations.
Nothing new there. But there are a few new elements to CAI’s political agenda.
Take, for example, the “External Influences Panel Report”
Here’s an excerpt:
Influential Stakeholders and Organizations
Association leaders also will need to work closely with influential
stakeholders and organizations, such as developers, real estate agents
and mortgage lenders. The National Association of Homebuilders,
National Association of Realtors and American Bankers Association
exert an incredible amount of influence over development, sales and
mortgage lending for homes in community associations. AARP, with its
large and active membership and powerful voice, also impacts the
success of associations. CAI will need to engage these organizations
to ensure common-interest communities continue to be considered
preferred places to call home.
In my opinion we do NOT want CAI strengthening its ties to NAHB and
NAR and mortgage lenders, nor aligning itself with AARP!
This white paper (and three others) written by CAI, I believe, is
partially a matter of damage control. CAI acknowledges negative public perceptions of Association Governed Developments (HOAs), even though they are not yet willing to admit that their grand utopian community model is plagued by fundamental flaws.
But it’s becoming clear that NAHB is less interested in building new condominiums (except for luxury condos) and is making its case for suburban rather than urban development. That’s clear from NAHB’s recent surveys and news releases. Developers’ agendas are not the same as CAI’s. They want to sell homes and avoid liabilities and litigious environments. They distrust owner-controlled associations, with good reason.
Mortgage lenders are rip-roaring mad about the priority lien debacle in many states, and they are becoming more skeptical when it comes to underwriting mortgages – especially for association-governed multifamily housing — concerned about assessment delinquencies and other financial risks.
We just recently purchased a single family home (no HOA), with a 15-yr fixed, 20% down mortgage from a major financial institution. Very low risk for the lender. The mortgage includes several key provisions and clauses to protect the lender’s interest when a home is governed by an owner’s association – such as reserving the right to require HOA assessments to be collected in escrow. It doesn’t apply in our case, but it was enlightening to see
this language inserted in the mortgage.
We even had to sign an affidavit that said our home purchase is for a primary residence.
I believe most Realtors are still relatively uneducated about Association Governed developments. In my new home state, real estate agents that seem to be “in the know” happen to own land and/or property that they develop into some sort of HOA! Others ally themselves with HOA developers and serve as exclusive agents for those developers. The rest have minimal knowledge about HOAs, Condo Associations, and spew CAI’s usual talking points about property values and maintenance-free lifestyle benefits.
This must change.
But the most disturbing part of this white paper is that CAI is targeting AARP – a consumer organization – as an “influential stakeholder” and positioning itself as a consumer protection group. That is downright sleazy, dishonest, and completely outrageous.
CAI is a trade group interested mainly in improving its professional reputation and enhancing business opportunities for its members. In their own words, CAI’s leaders cling to their core mission of “improving property values” and “enforcing rules and restrictions.” There is no mention of improving social values, enhancing quality of life, or creating a true sense of community. None of those values can be measured in dollars. Bottom line, CAI is not working for the Greater Good.