Tag Archives: Deborah Goonan

Deborah Goonan’s Look At C.A.I.

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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”
https://www.caionline.org/AboutCommunityAssociations/About%20Comm%20Assns/CAI%20-%20Community%20Next%20-%20External%20Influences%20Report.pdf
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.

#ValueMyRights

 

 

Beware the HOA Scam!

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guest blog by Deborah Goonan (IndependentAmericanCommunities.com)

The HOA industry, and the politicians who support the industry – perhaps for dubious reasons – use the same talking point, over and over again:

“Vote the bums out!”

What a joke! As many have pointed out here on this blog, there are many factors that make a mockery of the fair election process in homeowners or condo associations.

The very first problem is that votes are allocated according to the corporate model of governance, and not based upon a democratic basis of “one person, one vote.” In Association Governed Residential Communities, voting interests (notice I did not say “rights”) are tied directly to the share of property owned within the association.

When investors or developers own most of the property, they hold a majority of the voting interests, and therefore control the Board by default. In this respect, life in an HOA is no different than living under a dictatorial, communist, or fascist regime.

Or, another way to look at it is that, as a homeowner, you become an unwilling pawn in a game of hostile corporate takeover.

But even in cases where the developer or investor group are no longer involved, owners can form voting blocs of like-minded property owners to prey upon the remaining owners. One common scenario pits absentee landlord owners against owner occupants. This is especially common in condominium associations.

In 55+ communities, where many of the owners are in their seventies and older, it can be difficult to find candidates for the board who are healthy enough to serve! That opens the door for relatively young but unscrupulous board members to take advantage of senior citizens living on fixed incomes, and dealing with declining health.

The HOA concept is flawed to the core. The foundation is shaky from Day One.

And on top of that, there are no consistent laws that offer adequate consumer protection.

Why have so many of our elected officials failed to recognize that the HOA industry has, in effect, created an alternative local governance scheme that circumvents Constitutional principles? And what’s more, at the local and state level, misguided housing and development policies have encouraged or, in effect, required the establishment of nothing else but Association-Governed Residential Communities across the state and throughout population growth centers in the US.

It’s time to end the denial of abuse of homeowners and residents of these HOAs, COAs. It’s time to recognize that the governance model is flawed, and that, quite often, the financial model is also precarious at best.

This is America, and people need to be able to not only freely choose where they want to live, but they also must be free to live in peace. Americans should not have to risk losing their property equity and financial nest egg — not to mention their physical and mental health — because they have been sucked into a dysfunctional “community” governed by a mandatory association.

If state and local policies keep pushing these HOAs and building condos, there will very soon be no other housing alternatives. The supply of non-HOA, non-condo property to buy is already in short supply in high-growth real estate markets.

I recently relocated to Central Pennsylvania, where HOAs are not as common as they are in areas surrounding population centers of Philadelphia and Pittsburgh. States such as Florida (where I lived for about 7 years), California, Virginia, Illinois, Arizona, Colorado, etc. have very high concentrations of HOA/condo property and a great deal of problems as a result. Local governments are increasingly required to provide financial assistance to failed or failing Associations with aging infrastructure and inadequate reserves. The industry does not want you to know about this! Advocates and concerned citizens, don’t allow your state to fall into the same trap!