Wednesday, July 04, 2012

Monroe Township ordinance to change homeowners association regulations |

Monroe Township ordinance to change homeowners association regulations |

MONROE TWP. — The township council will vote on amendments to an ordinance this month that will require new residential developments with more than 100 homes to create homeowners associations.
The zoning ordinance also requires developers of residential neighborhoods with less than 100 homes to post a basin maintenance fee to contribute toward the upkeep costs of the basins and open space when the land is turned over to the township, according to Dawn Farrell, Monroe’s administrative clerk.
The township must maintain open space and retention basin land in developments without associations. Already, the work in the 38 developments without the groups has become a burden on municipal resources, Farrell said.
A zoning law created a decade ago required all developments, regardless of the number of homes, to establish homeowners associations (HOAs).
“However, it has come to light that smaller developments may not be able to sustain a HOA,” Farrell said Wednesday.
And there you have two things of note. First, ten years ago, Monroe Twp., NJ, started requiring that all new residential developments have HOAs, no matter how small they were. I have been emphasizing this widespread policy for many years--it completely undercuts the bogus argument that CIDs are a response to consumer demand. They are a way for developers and cities to make money.   Second, they have now figured out that  small HOA-run developments are not sustainable. The fragility of small HOAs, and many large ones, is undeniable, but it pales in comparison to the fiscal nightmare that thousands of condominium associations are facing.

Update 7/5/12: I have permission to include some comments from the person who sent me this link:

"I was looking at an article that related to the recent free speech case when I came across this additional article from the same news source.  Admittedly the article is about a year old, however, I think it shows several things of interest:

1)  HOAs are being mandated by local government

2)  HOAs are being mandated in order to relieve the local government from the costs of maintenance AND to create additional revenue in the form of ad valorem taxes since the property is owned by a corporation rather than by governmental entities.  In other words, more support for the proposition that HOAs are imposed out of government mandate rather than some "choice" of the homeowners.  So much for the claim that numerosity implies popularity.  I always said that numerosity doesn't equate to popularity whether you are talking about cockroaches, epidemics, or HOAs.

3)  Local government realizes that HOAs are often unsustainable

4)  Most of the argument raised by local government is ridiculous.  Academically why would it matter how many homes are in the subdivision when it comes to who should have responsibility for maintenance?  Either the obligation to maintain is a local government responsibility or it is not.  The people in these subdivisions are paying taxes too."


Fred Pilot said...

Excellent observations. This story shows that the privatization of local government is public policy. Both at the local level with zoning laws such as Monroe Township's and at the state level with common interest development enabling legislation. And yes, breaking down local government into thousands of tiny "principalities" as George Staropoli calls them creates economic and political diseconomies of scale that make their prudent management quite difficult.

Tyler Berding said...

With substantial tax revenue being diverted to increasingly unsustainable defined benefit public pensions, and taxpayer resistance to new taxes becoming insurmountable--requiring that home buyers directly pay the cost of maintaining their own infrastructure that the city would otherwise maintain with tax dollars has been public policy for several decades.

Problem is that community associations run by volunteers and financed by assessments determined by those who must pay them was a poor concept from the very beginning. It is becoming more and more apparent that attached owned housing projects have limited service lives and that eventually some unfortunate owners will inherit decades of deferred maintenance with no funds to pay for the repair of a now obsolete project.

With land values, gas prices, public finances and resistance to new taxes being what they are, we can expect that there will be few new, traditional housing developments with cities using tax dollars to build and maintain utilities, streets, parks, and schools around lots of single family detached homes--which is what has to happen if you were going to eliminate the need for homeowners associations, special taxing districts, or similar governing bodies.

If so, what real alternatives are there for developers to meet the increasing demands of municipalities and the public for higher density, close-in urban housing? There are only two: More condos or rental apartments--both, of course, privately maintained and governed housing. If you look at the warts on each, more rental apartments may very well be the best overall compromise.

Fred Fischer said...

The current mandated municipal “one type of governance fits all” policy for CIDs has been irresponsible from day one. As substantiated by many decades of implantation which has clearly shown that privatized governance through associations are economically unsustainable for the vast majority of CIDs do to their high costs and extreme liabilities. In addition to the facts that HOA/Condo entities have no duty to protects its members constitutional freedoms/ rights or was even intended to benefit consumers. Because the public/consumers had no place at the debate or creation table or vote to accept it making housing associations illegitimate forms of governance.
If property owners after development build out come together, debate/discus and with a supermajority vote chose to create an HOA at their own expense that’s legally and historically correct.

However when an HOA is imposed upon consumers as a condition of sale by a municipal mandate without public debate or a public vote that’s a clear violation of everyone’s constitutional liberties and rights.

Anonymous said...

To Tyler Berding:

Notice that this article had nothing to do with condos. This was HOA property and referred to homes in subdivisions. A condo isn't a home, it's a "unit" in a "project".

As to the option of "HOA" or not - the answer should always be "not". HOAs cannot be rationalized any more than slavery could continue to be justified. Permitting the proliferation of such unconstitutional governance is simply not justifiable. Alternatives can be sought but the status quo must not continue - it is harming both the people inside these subdivisions and those outside. Haven't you seen the short film called Despotism

If a "special district" or some other such nonsense is justifiable then perhaps so - but not involuntary membership in a private corporation. As non-governments these entities should not have governmental powers and no homeowner should tolerate being subjected to rule by private corporation. No court should be supporting rule by private corporation.

If an HOA is a government, then governmental limitations must be recognized - yet a fundamental objective of the HOA industry is to try to have governmental powers without being held to restraints on governmental actions. That is the key to success to the HOA vendors but not for the homeowners or the surrounding environs.

The HOA industry cannot have it both ways. Either the HOA corporation is a government and must be restrained like one, or the HOA corporation is not a government and can be told to take a flying leap whenever it imposes taxes, restrictions on owners' property use, etc., etc. The structure is inherently flawed and the HOA industry is largely responsible for exacerbating the problems. I haven't seen a legislative session yet where CAI didn't have lobbyists objecting to open meetings, open records, open elections, etc. in these places. Indeed, CAI is proud to splash its name on every amicus brief filed in court cases where such issues are at play. CAI always opposes the homeowner and always supports an environment of despotism.

As to the "higher density, close in housing" comment - please note that the article was directed to subdivisions of homes. Not everyone is interested in living like rats in matchboxes on top of each other. More and more people are commanded to contribute to a "common pool of money" through taxes and assessments which are allegedly for the "benefit of the community". What happens every time is that someone (HOA management company, local municipality) runs off with the hat of money leaving the contributors hanging and the job undone.

I am reminded of an excellent quote from the former Texas Transportation Commissioner Ric Williamson who stated the following in a December 2007 interview with

I determined from my years in politics—and just observing, just common sense, listening to people—that there was a reason why, all across our country, citizens less and less support general taxes into a common pool to be distributed by political decision-makers. There's a reason why people vote for Republicans and Democrats who claim that they won't raise those common taxes, and the reason is, our citizens, whether we like it or not, have decided that it's not in their best interest to permit themselves to be taxed in common and the money put into a common pool to be distributed based on political will. They have rightfully, I think, ascertained that when that occurs, the investment of the tax revenue is not made in the best interest of their welfare, but rather in the best interest of the welfare of the elected class.

Reflections of a Texas Transportation Trailblazer Reason interview with Ric Williamson, Chairman, Texas Transportation Commission

Anonymous said...

Hey Fred,
I cannot support your suggestion that property owners should be able to compel other property owners to be involuntary members of an HOA corporation. Should your neighbor decide that you need to make car payments on your car forever "for the good of the community"?

If it is "for the good of the community" then why not seek a legitimate form of local government such as a district?

I could care less if my neighbors want an HOA corporation - they can have their own club. However, expecting me to have to fund their club lest I want liens or foreclosure of my property is simply unacceptable. It doesn't matter whether 99% of them decided they want to have a club. Those that want to be club members can do so. Those that do not should be free not to join.

If you are performing a governmental function then you need to have a governmental form and respect governmental restraints. Citizens can always vote to create a special district - but an HOA is no such beast.

Anonymous said...

to Fred Fisher:

Fred, I sure like your concluding sentence. I disagree with your suggestion that a "supermajority" should be able to compel their neighbors into being burdened with perpetual liens to a private corporation that can never be paid off or to involuntary membership in such an organization. If you want a government then vote for a government but an HOA corporation is not a government and should not be recognized or accepted to have governmental powers.

I think you should also read the Armstrong vs. Ledges of Hidden Hills decision out of North Carolina and several like it. Here is a link to the story there:
The Ledges of Hidden Hills

Thank goodness for Bob & Vivian Armstrong and those who stood against the communitarian and CID industries. I invite you to look at the blog.

Anonymous said...


When does mandating HOAs using the term "shall" create HOAs as state actors subject to the 14th Amendment?

Commentary to follow, comparing Monroe wording to a few towns in Arizona.

Anonymous said...

Anonymous at July 5, 2012 11:39:00 AM CDT said...
"a fundamental objective of the HOA industry is to try to have governmental powers without being held to restraints on governmental actions...The HOA industry cannot have it both ways."

Why not?