Wednesday, March 06, 2013

Municipal duties move to 'burbs as HOAs must step in

Municipal duties move to 'burbs as HOAs must step in

"It's the most dramatic privatization of local government services that we've ever seen," said Evan McKenzie, a political science professor at the University of Illinois at Chicago and author of Privatopia: Homeowner Associations and the Rise of Residential Private Government.

Transferring these responsibilities to homeowner associations places more of a financial burden on individual homeowners and drives up the overall cost of housing, McKenzie said.

The costly repairs of aging streets or retaining ponds can become too much for a small group of residents in the community, particularly as many HOAs continue to reel from the lost revenue created by foreclosures, he said.

"I just think as a short-term solution to the fiscal problems of cities, what they created potentially is a long-term problem," McKenzie said.

"At some point, my question is this: Is not the responsibility going to come back to the municipality? They'll have slums on their hands."


IC_deLight said...

Looks like IC_deLight is not the only one concerned about the relationship (and the lack of disclosure of the relationship) between the "Associa" management companies and the vendors that the Associa management companies contract with on behalf of the HOA corporations or recommend to the HOA boards.

Fred Fischer said...

After decades of MANDATED creation many CIDs are struggling to stay afloat economically do to, "The costly repairs of aging streets or retaining ponds" as Evan said among many, many other reasons.

However in the world of privatized housing good economic health isn’t a formula for success or a guarantee that a CID is or will remain sustainable into the future. Because for many CIDs the greatest threat to its future survival isn’t necessarily economic but instead from volunteer governance itself. That depends upon the skills and integrity of its Board members and those of others hired to provide services. Since Board members often are not experienced, educated or certified to manage property let alone the lifestyles of its members. Consequently the creation and hiring of national management company’s won’t necessarily better serve the associations and in fact probably will make things worse. Since having fewer locally owned and operated management firms means for members. Less choice, less understanding of the needs/trends of the local community and higher costs necessary to feed both a local and national headquarters.

Finally our CID is a good example; although we are economically in good shape presently. We are also on the verge of failure from a lack of and the refusal of members to volunteer as committee and Board members to manage our CID. Simply members are refusing to be conscripted into giving up their time, to take on the risks, responsibilities and complex issues that come with being on a Board or even consider it without compensation since so many are struggling to pay their own bills. Furthermore because they don’t believe the association is listening to them or trying to meet their needs and they are justified. Since the only voices the Board seems to respond to is that of the management company representative and association attorney and that is understandable since the association was never created to be owner representative or friendly.