Category Archives: HOA

guest blog by Robert Frank, Colonel, USAF (Ret.)

Will Over-Taxing & Under-Maintaining Infrastructures Lead To Disasters?

Many cities claim to promote long-run ‘sustainability objectives’ following U.N. Agenda 21 policies. But, Homeowners Associations, CICs, CIDs, Condo Associations, acting as ‘private, quasi-governments’ wind up being over-taxed and under-maintained by cities.

The predicted results are windfall profits for industry and government, and failed CIDs. Is this yet another reason the HOA industry and local government is so hostile to those who question their policies and frequent overreaches?

We know that cities or counties charge the same property tax rates for all home owners. But, the costs to support HOA/Condo private property is much less than non-CIDs. This is particularly true in gated HOAs.

So, it can be reasonably argued that the local government organizations who dictate the requirements for CIDs and profit from receiving excessive taxes should either refund the surpluses to unit owners, or reserve the surpluses for future bailouts of failed CIDs.

Spending the surpluses for such unjustified things as vastly increased government worker salaries and pensions while the older CIDs are heading towards failure is unwise, selfish and immoral. This failing CID infrastructure situation for developments over 20 years old is well known.

Professor Evan McKenzie and others offer advice on CIDs to local governments and the industry. IMO those who create and highly profit from the terms, conditions and taxes created through the CID’s master plans cannot shed all responsibilities for helping to bail out failing CIDs.

We all want to avoid the kind of urban blight that happened (for somewhat different reasons) in Detroit, Michigan. But, CID common property structures seem to be designed to fail or require major (unaffordable) renovations within 20 to 50 years. This seems particularly true for gated CIDs and Condos. it seems that inventors and profiteers of such CID plans should be held at least partially responsible for enabling CIDs to sustain themselves over the long-run.

Is it not unreasonable, or at least unrealistic, to dump the total costs of common property replacement infrastructure on the backs of future unit owners using the almost unlimited power of CC&Rs during the last decades of structural life? What will that do to unit values in cities during those final decades?

As industry leaders have written, the future of CIDs is a predictable train wreck. If the HOA/Condo market is to be sustained, major changes are needed NOW in the master plans.

And, community planning is required NOW to build a balance of non-CIDs units where owners are individually responsible for their long-range planning?

Where are the better options? Industry and government demands for maintaining the “CID status quo” appears to be a formula for home owner disasters in our lifetimes!