Thursday, June 30, 2011

Private Community Associations: Boon or Bane for Local Governance?, Recorded on 6/30/2011 urbaninstitute on USTREAM. Other Events

Private Community Associations: Boon or Bane for Local Governance?, Recorded on 6/30/2011 urbaninstitute on USTREAM. Other Events
Watch it for yourself--yours truly and economist Robert Nelson.


Mike Reardon said...

Very nice job...couldn't really call it a debate though...Mr Nelson didn't argue a single point of your laundry list of serious and fundemental flaws.
I guess we should just...fix it.

Anonymous said...

A very good job, Dr. McKenzie. Congratulations.

Anonymous said...

Bob Nelson's solutions to the problems that have resulted from the implementation of his ideas are

(1) "we need a new bankruptcy law for common interest housing" (22 min. 50 sec to 24 min. 00 sec.). But he doesn't offer a proposal except saying that "initiative" is needed.

(2) "give people a one page sheet, you have to sit there, and you have five minutes and I'm going to ask you some questions," and "set up a lot of information mechanisms to educate buyers in the market," and a need for "leadership" to solve the problem of lack of informed consent by the home buyer (24 min. 00 sec. to 25 min. 10 sec.)

(3) bring in outside directors with "special expertise," and compensate association directors, with "rebates on their assessments or free use of the golf course" (26 min. 00 sec. to 26 min. 55 sec.)

(4) less state regulation of associations (41 min. 00 sec. to 41 min. 45 sec.)

(5) a constitutional convention for neighborhoods "built into the documents" (41 min. 50 sec. to 43 min. 20 sec.)

The only words missing from his laundry list of ideas for reform were glasnost and perestroika (or privatestroika)

He really had nothing of substance to say at all, and frequently did not complete sentences, because his ideas go nowhere.

Robert Nelson is as ignorant of the real world consequences of his theories as your typical college campus communist wearing a Che Guevara t-shirt driving around in a Prius sporting a "Hope And Change" bumper sticker.

Anonymous said...

At around 8 minutes, Bob Nelson is glibly dismissive of the conflict within HOAs. When 1/2 of homeowners describe their HOA as "a major headache," 1/5 have been in what they describe as a "war with their HOA", and 4/5 would "consider not buying a home" governed by an HOA (L.A. Times, 2007. Service Magic, 2007. See also here), there is a serious problem that cannot be ignored by believing that homeowners are "willing, even though they don't like it at times, to put up with some significant curtailments of their own actions in order to be able to control the way the neighborhood develops" (8 min. 25 sec. to 8 min. 40 sec.).

Somebody should also explain to him, and all the other people who think that HOAs are necessary to exercise "control over their neighbors" (8 min. 15 sec.), that HOA corporations are not needed to enforce restrictions and covenants.

Without HOAs, homeowners would still be able to litigate against their neighbors for violating some rule. The difference is that the plaintiff(s) would be required to put up their own time and money, without being able to unilaterally fine other homeowners, preemptively dig into the defendant's pockets, or force other people to pay the legal costs if they don't agree with the action.

The perverse incentives and moral hazards that exist for the benefit of HOA attorneys under the current model would be eliminated.

This means that people aren't going to sue unless it's pretty darned important -- e.g., no more lawsuits due to cars parked on the driveway or too many flowers in the garden -- as is the case now. HOA managers and lawyers currently profit from creating strife and conflict within the communities they claim to serve but actually control.

Anonymous said...


Your proposals to

(1) ban municipal mandates that create HOAs (38 min. 40 sec.)

(2) require HOAs to respect basic constitutional liberties (i.e., a "bill of rights" for homeowners) (38 min. 50 sec.)

(3) "The Right To Rent Act" (39 min. 25 sec.) (see also here)

are good ideas, along with everything that Barbara Hogan wrote in her Texas HOA Issues handbook, (PDF here).

However, I think that "Right To Own Your Own Home" laws modeled after "Right To Work" laws (see comments here for details), would force the associations to be more responsive to the needs and wishes of owners than any other proposed piece of regulation or legislation ever could.

Plus, it would be fun to see conservatives and libertarians try to explain why they support "Right To Work" and "Paycheck Protection" laws that regulate the private contracts between employees and employers and labor unions, but the so-called "contracts" between homeowners and HOA unions should be free of government interference, because they're private contracts.