Tuesday, November 16, 2010

Condo associations may be coming to an end | WBEZ

Condo associations may be coming to an end | WBEZ
Hear crazed professor McKenzie on Chicago public radio today.


Anonymous Communist said...

Back in March (scroll down), I proposed an "alternative system" of condo and home ownership, in response to Tyler Berding's suggestion that owners must be turned into renters.

I was not aware at the time that what I was describing was a co-op model advocated by Professor McKenzie.

The co-op model is certainly preferable to Mr. Berding's earlier suggestion, or his more recent idea of having owners surrender ownership interest of the building "shell."

Fred Pilot said...

The perfessor is saying that it's not feasible or viable over the long term to put together a bunch of what are essentially individual apartment owners and expect them to competently manage a condominium building or complex. It doesn't work because the owners' perspective is that of a unit owner and not as a condominium member. Their interest generally doesn't extend beyond the walls of their individual unit. I know first hand because I've served on a condo board for five years in the 1990s.

To McKenzie's observations, I would add that condos often appeal to first and last time buyers, neither of which has a long term interest in the financial solvency of the condo association. The first time buyers are temporarily there waiting to move up to a single family detached unit. The last time buyers have naturally limited investment time horizons. Accordingly, both groups want to keep both operating and capital assessments as close to zero as possible. It's no wonder then condos are often on the edge financially even in good times and face extinction in bad times as McKenzie points out.

Anonymous said...

1. Discourage owners
2. Disenfranchise owners
3. Marginalize owners
4. Do anything and everything else possible to make the owners give up hope and inerest
5. Blame the owners and their apathy for all the problems
6. ????
7. Profit!!!