IF YOU WANT TO SEE THE VISION FOR AMERICA, LOOK AT H.O.A.s

by Robert

Nationwide, there are 300,000 H.O.A. corporations, governing more than 60 million Americans who pay $50 billion (with a “b”) in H.O.A. dues per year. It is an enormous industry. H.O.A. corporations are among the least regulated businesses in America. Consumer protections rules are non-existent or not enforced. Embezzlement and other financial crimes are occurring in epidemic proportions. And American home owners have been losing their 1st, 2nd, 4th, 5th, 7th, and 8th Amendment rights under the “repressive libertarianism” guise of contract law, because H.O.A.s are private governments corporations not bound by the United States Constitution.

For decades, municipalities have been requiring the creation of H.O.A. corporations as a condition of granting building permits to developers. The local governments get to collect taxes for goods and services – e.g., road maintenance, utilities, trash removal, open space, recreational facilities, etc. – that they no longer provide. As a result, homeowners in H.O.A.s end up being double-taxed; once by the government and again by their H.O.A. corporation. The growth of H.O.A.s has been supply-driven to benefit developers and governments, not
demand-driven by consumers.

Two-thirds of H.O.A. residents have a negative view of H.O.A.s, with 1/5 saying they “have been in what they call a ‘war’ with their H.O.A.” These are tens of millions of Americans, a large constituency that has been ignored by our policy-makers and pundits. Yet “free-marketeers” have nothing but praise for H.O.A.s, lauding them as a desirable model of corporate governance by private contract. Something is obviously wrong with their socio-economic theories.

For years, our legislators have been offering the illusion of reform, deferring to H.O.A. corporations instead of individual home owners, while doing nothing to remove the perverse incentives and moral hazards built into the collective ownership of your private property. H.O.A. boards engage in destructive litigation against their involuntary members for trivial amounts and reasons, hiding behind the corporate veil, collecting and spending other people’s money to use against them. Meanwhile, Community Associations Institute (C.A.I.) attorneys
profit greatly by feeding off of American home owners. “It’s called capitalism. It’s the free market,” they say.

It has long been the official position of the Republican Party that contracts requiring membership in a labor union as a condition of employment should be outlawed, both at the state and federal levels. It is time to extend that same protection to American home owners, and prohibit mandatory membership in an H.O.A. corporation as a condition of home ownership. Making home owners pay dues to be “represented” by an organization they disagree with is hardly fair or just.

For a the full version of this document with cited references click:  If You Want to See a Vision of America