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.
Something tells me with all the studies clearly showing the Millennials will not be buying into HOAs or any other restrictive type housing the CAI is having to resort back to targeting the older folks. Add to that the activists are popping up with blogs, books, radio shows, and more media coverage than ever before exposing the truth about HOAs.
I sense fear in the backroom discussions at the CAI. Here’s the scene I see: Panic. What if? What if? What if? Okay, we’ll get in tight with AARP and hope they can hook their blind faith and trust followers into believing us with our propaganda about HOAs keeping property values up. Let’s think about giving real estate agents double commissions if they’ll continue to find more suckers to sign into an HOA. Good move to allow the mortgage lenders to lock in those HOA dues with escrow holdings. Now, about those cities, counties, and developers….what do we do to keep them from bolting on our HOA scam? The courthouses are full of HOA lawsuits perhaps we could offer some pro bono help from our CAI attorneys? And the cities… we’ll talk the HOAs into making donations to the schools that serve their HOAs. But but but but…what happens if somehow these activists convince the HOAs to stop contributing to the CAI? What if our money pipeline dries up?
Looks like tough times lie ahead for the CAI since these activists are not going away and they sure aren’t going to be silenced!
Notice anything missing from the statement “CAI and its chapters—will always be focused on maintaining and improving property values and making communities preferred places to call home. “?
Why assume that CAI is talking about “improving property values” for the homeowner? Certainly they never claim that – people just assume it. In reality, CAI’s mission is to create value in your home for members of CAI – NOT THE HOMEOWNER. CAI’s antics do nothing but reduce value of the home to the homeowner.
Exactly! The goal is to maintain and improve property values of the corporate association entity, even it that means converting/de-converting/redeveloping a housing development to make it profitable once again – at the expense of existing owner-occupants.
And in some cases, the goal is merely to increase the flow of revenue directly to management companies, attorneys, collection companies and others, without any effort to maintain or improve property.
All CAI and NAHB talk about about balancing property rights is misleading. What the industry really means is that the rights of the Association must always override the rights of individual home or condo owners.
In my Commentary on these 4 white papers (see http://wp.me/p3njZ-1gg), that I refer to collectively as the CAI Manifesto or CAI’s Plan for HOA-Land in America, you will not find any discussion of mini or quasi governments. Apparently, CAI believes that there is no room for legitimate public government in the CAI Manifesto.
“Manifesto” is defined as “a public declaration of intentions, opinions, objectives, or motives, as one issued by a government, sovereign, or organization.”
I wrote: “CAI will use these papers to further indoctrinate the legislators, the media and the public that CAI is the only competent, informed, knowledgeable, educational and credentialed organization with 40 years’ experience to conduct HOA affairs and to deal with HOA issues.”