Condos upping fees to cope with downturn -- South Florida Sun-Sentinel.com: "The souring economy has condo and homeowner associations facing the same problem as many owners: less money.Throughout South Florida, boards are grappling with how to keep up property values as fewer owners pay their assessments. Although foreclosing on a unit is one way to collect the money, the cost is high and the homes are unlikely to sell. So boards must look for alternatives. The most common practice is also the most unfair. Boards 'overassess' the remaining owners by 10 percent to 20 percent, said Gary Poliakoff, whose Fort Lauderdale-based firm represents 4,300 associations in Florida. Others are eliminating services."
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Associations don't have many options because the whole financial burden falls on the owners who can pay. The over-reliance on owners to finance and run these associations is the weak link in this whole utopian idea.
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"Although foreclosing on a unit is one way to collect the money, the cost is high and the homes are unlikely to sell. So boards must look for alternatives."
HOA foreclosure attorney lobbyists claim that foreclosure is a last resort. If this were true, then "foreclosing on a unit" would be the last "alternative" boards would find. According to the above quotation, foreclosure is not only not the last resort, but boards look for alternatives to foreclosure because "the cost is high and the homes are unlikely to sell," rather than because foreclosure is (as the lobbyists claim) the last resort.
"Throughout South Florida, boards are grappling with how to keep up property values as fewer owners pay their assessments. [...] The most common practice is also the most unfair. Boards 'overassess' the remaining owners by 10 percent to 20 percent, said Gary Poliakoff, whose Fort Lauderdale-based firm represents 4,300 associations" (boards).
So "boards are grappling with how to keep up property values," and "the most common practice is ... Boards 'overassess' the remaining owners."
Developers are notorious for keeping assessments artificially low, during the period of developer control, so that they can get the best prices they can for their units. Therefore, boards do not "keep up property values" by increasing assessments. It works the other way around.
The very fact that HOAs assess (property) taxes suggests that the HOAs' double-taxation depresses property values, since people prefer more money to less. Secondly, the contents of Professor McKenzie's post don't exactly make me want to run out and buy a condo. Finally, according to Privatopia (p. 148), "the CID regime ... is based on restrictions." This basis would have a depressive effect on property values among people that prefer freedom to restriction (most people).
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