Wednesday, June 20, 2012

Inside USA - Privatised cities - 17 Oct 08 - Part 1 - YouTube

Inside USA - Privatised cities - 17 Oct 08 - Part 1 - YouTube
This is a documentary about Sandy Springs, Georgia, an affluent suburb of Atlanta that incorporated itself as a municipality so the folks in their $350,000 homes wouldn't have to share their precious tax dollars with poor people. They contracted with mega-engineering firm CH2M Hill to provide all municipal services except police and fire for $25 or $30 million, making them basically a fully privatized city. The core of the whole thing, of course, is the CID housing in which these folks live.  I guess if we need examples of privatopia, this place will do. There are four more "cities" like it nearby. I understand Sandy Springs got a better deal recently than CH2M Hill was giving them.


Anonymous said...

The video is about 15.5 minutes and worth watching. At least the city maintains the obligation to pay for the services even if it has outsourced the provision of some services. This is in contrast to the HOA situation where the city and county tax the bejibbers out of the homeowners while foisting the obligation for the services AND the cost of the services back onto the homeowner via the HOA corporation. Moreover the city/county immunize themselves in many cases by imposing "ordinances" onto owners via restrictive covenants.

One huge unanswered question is "how long will it be before the vendors take over control of the city just as they do in the HOAs they 'service' ".

Tyler Berding said...

If you think about it, "vendors" already control municipalities--the municipalities' own public employees--city manager, city attorney, police chief, etc. Most of these service suppliers are hired under contracts and even if they are considered employees in the legal sense they nevertheless run the city under very favorable compensation packages. Municipalities, like community associations, are not run by volunteers, they are run by paid career professionals. The protection afforded by laws regulating municipal government may be more restrictive and provide more oversight, but in the end it is only a matter of degree. So what's the difference between the municipal system and private communities? As a practical matter, not much. If you incorporated all of the CIDs into municipalities (not practical but it illustrates a point) the best you would get would be greater oversight of broke cities that can't pay the vendors that run them.

Anonymous said...

> So what's the difference between the
> municipal system and private communities?

The perverse incentives that make members of your profession quick to foreclose on struggling homeowners for their own personal profit, and generally make life in communisty associations much more "intrusive, expensive, impersonal, and often incredibly frustrating."

As ABC's "20/20" reported 10 years ago :

McKenzie says foreclosures by homeowners associations are
happening all across the country. "What's really driving this
is the dynamics of these collection lawyers who are just out
to generate fees and to sell these houses off as fast as they

I'm not sure who this "McKenzie" guy is, but he sounds like he was way ahead of the curve on this issue.

Two years ago NPR reported that

as the economy has gone under, HOA management companies
and lawyers have been making millions off homeowners through
this foreclosure process...With the recession, foreclosure
filings for delinquent HOA assessments in Texas have increased
from about 1 percent of all home foreclosures to more than 10
percent currently, according to the industry.

While governments have the right to foreclose for unpaid taxes, I have seen no evidence that they are as quick or eager to do so as members of the CAI and other HOA trade-and-lobbying groups.

This may be why homeowners in HOAs have a 2/3 negative approval ratings of HOAs, where 1/5 "have been in what they call a 'war' with their HOA", and 4/5 considering not buying their next home in an HOA.

If there are poll results showing that 1/5 Americans believe that they are at 'war' with their local government, and 4/5 considering not buying their next home in a public municipality, I'd like to see it.

While some may dismiss the difference as a matter of degree, in practical terms it's a significant difference to the homeowners themselves. Local municipalities have not given their residents a reason to hate them with the seething passion with which many homeowners hate HOAs.