Saturday, January 01, 2011

Housing Distress Pits Neighbor Against Neighbor -

Housing Distress Pits Neighbor Against Neighbor -
Yes, it certainly does.


gnut said...

"Since HOAs are very local and small, participants are often neighbors and hence have incentive to settle disagreements in a civil manner."
"Free-Market Alternatives To Zoning"
The Independence Institute
February 28, 2009

That never gets old.

But even more disturbing is the tone of both the article and the comments at the Wall Street Journal story.

Conservatives/libertarians/Republicans repeat the industry talking points that everything is the fault of the "delinquent" owners, with questioning

(1) whether the delinquencies can legitimately be called "delinquencies", or if they are artificially-created by the HOA corporation (eg, "priority of payments" scam).

(2) the viability and sustainability of the condo system as it exists today, in addition to its communist nature

(3) the notion of things like "contract" and "consent." Not only are the WSJ authors and readers unaware that HOAs are often government-mandated, but they are also ignorant of Rational Choice Theory

The term "parasite" and "free loader" is freely applied to the homeowners by the WSJ authors and readers, but never to the property management companies and law firms that feed off the homeowners.

The latter is especially ironic, because the right-of-center are supposed to be advocates curbing the abuses of parasitic tort lawyers. Except, I guess, when it comes to HOAs corporations, when all of that concern about individual private property rights is thrown out the window in favor of collectivism.

But in order to prop up the HOA corporations, which are Too Important To Fail (tm), the conservative/libertarian answer is more of the same -- ie, more power for the HOA corporation and its lawyers, and less rights for the individual home owners.

With an HOA board run by a group of Stalins, homeowners can be made to toe the line and property values can be maintained. And as long as the communism is privatized, Stalin can do no wrong in the eyes of the Wall Street Journal and its readership.

Disclaimer: The article here is about condominiums, which do have real issues with shared infrastructure, unlike single-family housing HOAs. A condo HOA's claim that failure to pay assessments harms everyone is more legitimate than it is with single-family HOAs. This is something that both advocates and critics of HOAs, and legislatures and courts, tend to forget.

Fred Pilot said...

Seems to be plenty of investment risk associated with condos. At the high end of the market, they fail at the outset when developers can't presell enough units to service their loans.

At the lower end, they can become insolvent and go into Tyler Berding's death spiral.