Friday, September 10, 2010
Wednesday, September 08, 2010
Cars on blocks. Knee-deep grass. Going to seed. Around a neglected above-ground pool. In the front yard. Chartreuse-and-fuchsia repainting jobs. Beds of silk plants. Bordered by pinwheels acquired at a dollar store end-of-the-season closeout sale.
The horror. The horror.
The remote chance that one or some combination of these apocalyptic prospects could come to pass on your block is why deed restrictions and their enforcement arm - the homeowners association - evolved. It turns out, apparently, after Woodstock and Vietnam, we no longer trust one another to tend to our corner of the American dream as fastidiously and tastefully as June and Ward Cleaver (the 1980s Clair and Cliff Huxtable notwithstanding).
To that, the HOA abolitionists cry "HOA apocalypse now!"
Meredith Baker was happy and excited on the day in June when she and her family moved into their new house in the Country Meadows subdivision in the Village of Hamburg — until she found that there was no one to pick up the garbage.
“I called the village the next day and said, ‘What day is our garbage pickup?’ ” she said. “They said, ‘What are you talking about? We don’t pick up your garbage.’ ”
Then she called Ryan Homes, the builder of her house, and asked whether the homeowners association picked up the garbage, and she was told she would have to buy the service herself.
The crippled Las Vegas housing market has triggered a legal battle pitting investors buying foreclosed homes against homeowners associations, with millions of dollars at stake.
The key issue — and what will probably be dragged out all the way to the state Supreme Court — is collection companies tacking on their fees to the delinquent HOA dues they have been trying to collect, in many cases for longer than a year. If associations lose and can’t get past-due fees, assessments on paying homeowners will probably increase.
That additional charge for collections has run several thousand dollars in some cases and exceeded what the investors sometimes had to pay in delinquent HOA dues. With collection costs averaging about $2,000 per foreclosed home, investors said the amount owed could easily surpass $50 million.
When local government privatizes, so does the task of collecting property assessments. Private local government collection costs are just too doggone high, claim investors who are being hit up for past due HOA assessments on thousands of Las Vegas REO properties. The community association collection industry counters with dark warnings that HOAs will go into receivership and assessments will increase if the assessment collectors don't get their due.
This is one of the drawbacks of privatizing local government. The tax collectors aren't paid by the taxpayers but rather via private contracts to act as the HOA's proxy. As this Las Vegas Sun story illustrates, that can lead to some nasty litigation.
Tuesday, September 07, 2010
Questions raised about tombstone removal from small historic cemetery in Holmdel | APP.com | Asbury Park Press
But Beau Ridge Association president Edward Esler said everything was done by the letter of the association's laws.
'There's no story here,' Esler said. 'By the bylaws of our organization, we are required to maintain that area, which was done when the place was built 25 years ago and is being done now. Everything we've done has been done to the letter of the law.'"
Monday, September 06, 2010
Now the association is trying to turn the neglected neighborhood around by charging fees to new buyers lured by low home prices. They think homeowners who didn't pay mortgages or dues for years should not be allowed to just walk away and leave behind an eyesore, reports TBO.com.
The community started charging buyers a $400 transfer fee, then a $225 fee to release liens against the property. There is also a $250 charge to prepare a letter detailing the fees owed. If buyers or sellers opt to do the work themselves, there is a $75 fee for the association to review the work, reports TBO.com.
And $600 for a mailbox.
Bladder Lane, Bent Street and Butt Hole Road – the street names that reached the end of the road - Telegraph
In some cases, the name change has followed years of ridicule.
The inhabitants of Butt Hole Road even had to put up with coach loads of US tourists visiting to have their pictures taken near the road sign, after the street appeared in an American book and on the internet."
This is the opposite of what developers do, where they name streets in a desert something like "Ocean Wave Lane."
Home values have already dropped 30%. What does "crash" look like, please?
Yet as their financial prospects darken, students’ educational costs are exploding.� Like the health care system, the educational system is being overwhelmed by rising costs and rising demand.� And as misguided government policies contributed to the real estate bubble by artificially inflating demand, government programs are burdening students with unpayable loans and contributing to relentless and unsustainable inflation in school costs."
Mead is a famous political science professor at Yale and Bard College.
Sunday, September 05, 2010
When Becky and Chris Hobbs' home was foreclosed on and the family evicted from it this spring, the couple had not missed a house payment. They had, however, not paid their homeowners association dues. "I had no idea that anyone other than your mortgage company can evict you from your house," Becky Lew-Hobbs said. "It's absurd to me that one late payment can evict you."
Skipping out on homeowners association dues can have extreme, and often unexpected, consequences. Increasing numbers of the neighborhood-based groups are turning to foreclosure proceedings to collect on overdue fees, which the associations use to maintain community clubhouses, pools and the like.
People who have suffered a big loss of income in the economic contraction may figure that as with delinquent property taxes, they can settle up with the assessor's office when their financial situation improves. Wrong. HOAs come knocking years before the tax man for significantly much smaller sums. Since HOA assessments are considered private and not public obligations, private attorneys play the role of tax collectors. And they charge big fees for doing so, often multiples of the underlying amount owed. Good work if you can find it or an appalling scam -- depending upon your perspective.
Ouch. How about this quote from a developer: "The perception of homeownership as a wealth builder has suffered a deep setback." No. Really?
Sellers think their homes are worth about twice what anybody is willing to pay. An acquaintance of mine just bought a home in foreclosure. It was sold new in 2006 for $370,000. The absentee owner, who bought it as a (really bad) investment, has been trying to unload it and eventually he couldn't even find a tenant for it. The house sat vacant for a while and finally the owner just let the bank take it in foreclosure. At the foreclosure sale the bank wanted about $154,000. Only my acquaintance even bid on it--for one dollar above that figure. He got it.
There are three houses for sale on my street. One has been on the market for almost two years, the others over a year. No action. I'm sure they could be sold, but the prices would have to come down so low the owners either couldn't pay off the mortgage or would consider their lives ruined.
And every TV talking head keeps talking about "the recovery." Yeah, sure.
Here's some info on what I refer to below...
The Ogallala aquifer is being used today to supply residential and agricultural communities across eight Midwestern states. For nearly 80 years the nation’s breadbasket has been irrigated from Ogallala groundwater—a practice so unsustainable it severely threatens an aquifer that had flourished for over a million years. Farmlands are already shrinking on some portions of the Ogallala that have been mined of water. As the water table continues to plummet the High Plains will have to take drastic measures, whether communities import costly water or abandon the most profitable farming in the nation. Either way the decision has to be made soon because the aquifer that once held enough water to cover the entire United States under 1.5 feet of water is rapidly running out.
Once the world's fourth-largest lake, the sea has shrunk by 90 percent since the rivers that feed it were largely diverted in a Soviet project to boost cotton production in the arid region."
The Aral Sea is one especially horrible example of what is happening to the world's lakes and rivers. Damming rivers for crackpot schemes to irrigate deserts and build cities where only reptiles would be comfortable; industrial pollution; overpumping of ground water that won't recharge for a thousand years; using millions of gallons of water to extract oil from tar sands, and on and on. We are about 10 to 20 years from a global water crisis, and in fact it has already started in some places.
Now, let's bring this down to the US and the housing industry. The western US is sucking rivers dry and draining the aquifers so deep that the ground is subsiding. The Rio Grande is running dry. Some years it doesn't even reach the Gulf of Mexico. The Colorado River is in danger of basically drying up by 2050 or so, by some estimates. The level of the Ogallala aquifer that underlies the midwestern US and supports 1/5 of our agriculture is being overdrawn so badly that is dropping by 1.75 feet per year. It took 6000 years to fill, and the most dire estimates say it will run dry in 25 years. I could go on, but if you take a look at this book or any number of others with a similar message, you will see that the evidence for an impending world water crisis, including parts of the US, is overwhelming.
Now--with that as the background, what are the implications for the American real estate development industry? For example:
1. Should developers be permitted to build new subdivisions in deserts and other places that don't have sufficient water (such as Atlanta, GA)? Is it wise to keep building vast quantities of housing in and around Las Vegas, Phoenix, Tucson, Atlanta, Riverside and San Bernardino, etc., when they are pumping in or otherwise stealing millions of gallons of water already?
2. Should golf courses be permitted at all in such locations? Or is it time to shut them down in order to avoid wasting water?
3. Should local communities be allowed to adopt building moratoriums and keep developers out entirely, on the sole grounds that there isn't enough water?
4. Should HOAs be forced by state law to permit low-water yards, regardless of what the governing documents say?
5. Should state laws impose water conservation measures on cities and HOAs?
What do you think?
Sounds about right. As Mr. T would say, I pity the fools that want our jobs after we retire.
Judges these days are focused on processing cases in the name of efficiency, and committed to the notion of enforcing the terms of contracts. Those aren't bad things, but it can lead to some very harsh consequences.