Getting Sober in the New Economy
As we stated in the "Affordable Housing Myth," are we really doing families with moderate incomes any favors by encouraging them to buy housing that is poorly built, expensive to maintain, and very difficult to sell? What benefit is there to saddling low and moderate-income families with impossible maintenance burdens? When we sell housing with hidden defects and even normal maintenance costs that greatly exceed expectations, does the buyer really own anything? More likely, we have asked these families to assume a crushing liability. Given the realities of the economy and the shaky condominium economic model, is attached for-sale housing really the best solution for low-cost housing? Could rental apartment buildings be a better answer?
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Tyler Berding takes on a big question: is renting an apartment a better deal than buying a condo?
Thanks to Fred Pilot for the link.
4 comments:
What benefit is there to saddling ANY family with hidden defects and maintenance costs that greatly exceed expectations? Any benefit accrues only to the VENDORS of the HOA.
What favors are you doing to any family by encouraging them to buy housing that is poorly built, expensive to maintain, and difficult to sell? The only thing of merit here is that a CAI attorney is providing a list of why one should avoid HOA-burdened property at a time when his colleagues are still trying to preach how wonderful HOAs and HOA-burdened property is.
Professor,
Would you favor a ban on the construction of new condominium units?
No. I don't want to ban any form of new housing. This isn't a command economy. And anyway, there is zero possibility of CID housing being banned. If anything, we will be seeing more of it than ever before. The problem now is that local governments won't let developers build anything else! Maybe we could start by banning these "condo/HOA only" mandates.
As you said in the recent Urban Institute video:
"The condominium…it's kind of almost a fictional real estate interest. These things can only exist by statute…Condominiums can only exist where statutes authorize them to exist. So we've had them since about 1960."
And as Steven Siegal wrote back in 2007:
"Before 1960, the condominium form of ownership was unknown in the United States. Beginning in the early 1960s, the states began enacting statues authorizing the condominium form of ownership, principally in response to the enactment of the National Housing Act of 1961, which extended Federal Housing Administration mortgage insurance to the condominium form of ownership. See McKenzie, supra note 2, at 95. By 1967, all fifty states had enacted condominium statutes. Id. at 95–96." ("The Public Role in Establishing Private Residential Communities." Urban Lawyer. Fall 2006. Footnote 23 on page 869.)
Since there is no common-law basis for condominiums, condominium ownership can only exist by statute, is prohibiting new condominium construction such an outrageous idea? It's a failed legal fiction that has caused a lot of harm to both the individuals involved and the economy as a whole.
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