Monday, May 01, 2017

Condominium property act revamp could give owners needed support - Loop North News

Condominium property act revamp could give owners needed support - Loop North News: "Condominium owners and families residing in homeowner associations who are battling disputes and struggling for financial clarity received a major shot of support from the Illinois Legislature with the recent passage of two important bills."



'via Blog this'

Friday, April 28, 2017

Rachel Weber receives Best Book Award from the Urban Affairs Association | Great Cities Institute

Rachel Weber receives Best Book Award from the Urban Affairs Association | Great Cities Institute: "At its 47th annual meeting in Minneapolis, Minnesota, April 19-22, 2017, the Urban Affairs Association awarded Rachel Weber, Great Cities Institute Fellow and Professor of Urban Planning and Policy at UIC, the “Best Book” in the field of urban affairs/urban studies.  According to the association, “The purpose of the award is to encourage high-quality research on urban issues and reward cogent writing on urban affairs.”  Dr. Weber received the award for her book, From Boom to Bubble:  How Finance Built the New Chicago (University of Chicago Press), which “investigates the causes and effects of the dizzying building booms that occur when real estate development financial markets, and city planning all operate in overdrove to rapidly erect new structure and demolish older ones.”  Congratulations, Rachel!"

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Congratulations to my colleague, Professor Rachel Weber!



Chalet Village HOA can collect even if wildfire consumed home; fees assessed on land

Chalet Village HOA can collect even if wildfire consumed home; fees assessed on land

"Rebuilding Chalet Village’s facilities will take every dime from property owners’ annual assessment, according to the homeowners association board members. The HOA bills drew complaints from a few people who lost cabins to the November wildfire, who asked why they should pay for unusable properties and destroyed facilities...The Chalet Village Owners Club was already on a tight budget after a $250,000 pool repair the previous year — for which it’s still fighting an insurer in court — and the wildfire did at least $200,000 more damage, which will exceed the limits of the HOA’s insurance, said board treasurer Stan Johnson. The fire also destroyed 533 cabins, including all but 43 houses in North Chalet Village. About 700 remain in South Chalet Village."

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Another example of how things work. The association had two big financial hits and nobody is going to pay for it except...the owners.  

Thursday, April 13, 2017

Henderson families fighting proposed HOA rule changes - KTNV.com Las Vegas

Henderson families fighting proposed HOA rule changes - KTNV.com Las Vegas: "Henderson neighbors say they are fighting back against a pair of proposed rules being considered by their HOA targeting certain dogs and kids playing in the street.

The HOA president says they are looking at the rules after getting several complaints from resident on both issues."

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They are considering breed restrictions. And they are considering prohibiting kids from playing on their private streets, which is one of those "let's create bad publicity for ourselves!" ideas that some HOAs are attracted to.

Wednesday, April 12, 2017

Illinois General Assembly - Bill Status for HB3755 -- Attorney Fees

Illinois General Assembly - Bill Status for HB3755: "CONDOMINIUM ACT-ATTORNEY FEES"



In Illinois, when an association sues an owner and wins, the owner pays the association's attorney fees. But when the owner wins, the association generally does not have to pay the owner's fees. This bill would make the fee-shifting mutual, so that the victorious owner would have his or her attorney fees paid by the association. This is inspired by what happened to Lisa Carlson in the legal disputes that led to the case of Spanish Court Two Condominium Association v. Carlson.  A similar bill was introduced in the Illinois state legislature last year and didn't make it out of committee. Attorney Norman Lerum, who represented Carlson in the case, is heavily involved in designing the legislation, which is being pushed by Rep. Scott Drury (D-Highwood).

Condominiums in crisis: Financial troubles put many communities at risk - The Washington Post

Condominiums in crisis: Financial troubles put many communities at risk - The Washington Post: "Even as posh condos rise in trendy neighborhoods around the nation’s capital, many older complexes are mired in a recession that never ended. A cycle of aging infrastructure, limited resources and foreclosure is putting these communities in a deep financial hole, threatening what traditionally has been an affordable path to homeownership for the working class.

Monthly fees, the financial lifeblood of condo developments, have risen sharply as boards try to generate cash for long-deferred maintenance and to cover basic expenses. As a result, more owners can’t make their payments, and fewer prospective owners can afford to buy in.

At the same time, tightened lending rules, and a reluctance among banks to foreclose on units that will be hard to resell, have boosted the number of long-vacant condos in many complexes, further depleting the flow of fees that pay for utilities, trash collection, upkeep and repairs.

“These communities are suffering desperately,” said Vicki Vergagni, community manager at Glen Waye Gardens in Silver Spring. “This is potentially a great type of housing that is affordable. But public policy has not foreseen the issues it’s created.”"


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This is from late last year, but it is worth reading.

Why Colorado lawmakers hope this is the year to solve the affordable condo crisis | The Colorado Independent

Why Colorado lawmakers hope this is the year to solve the affordable condo crisis | The Colorado Independent: "This much perhaps everyone can agree on: Colorado is in an affordable housing crisis, whether you live on the Front Range, Western Slope or the Eastern Plains. Affordable housing is almost a myth, with rents in Denver for a one-bedroom apartment averaging $1,550 per month.
But is a package of legislation tackling “construction defects reform,” which would change the process by which homeowners with defective condos sue developers, the answer to Colorado’s affordable housing crisis?
Some of those who build condos say yes: If you pass it, giving us more protections against lawsuits, we will return to building affordable for-sale condos and townhomes. But some of those who have lived in defective owner-occupied multi-housing units just don’t buy that."


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Nice tradeoff--for builders. Protect them against lawsuits for shoddy construction, and they will build more lower-end condos. And then what? The people who buy them can't sue after the roof starts leaking, so they have to pay for it with a special assessment that none of them can afford. It is the buyers of low-end condos who are the least able to pay for things like this.

More than 200 condo buyers may lose homes after development fails - Toronto - CBC News

More than 200 condo buyers may lose homes after development fails - Toronto - CBC News: "About 200 people who bought condo units in an Etobicoke high-rise project may lose their homes after the development was placed into court-ordered receivership due to massive financial problems.

The project, still only about 15 per cent complete six years after it was first marketed to potential buyers, will now be sold off by the receiver in a bidding process.

The buyers who paid for the pre-sold condos — 208 of the project's 242 units — will get their combined $6.3 million in deposits back. But the condos they bought and waited years to move into will likely be sold off at much higher current market values by whomever steps in to complete the project. "


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As we all know, this has happened many times in the US. As is so often the case with condominiums, fluctuations in property values end up hurting the little people who just want a place to live, and benefiting the speculators who can afford to get in and out of the market.

Monday, April 10, 2017

Highlands Ranch resident Stan Hrincevich is determined to push back on HOA transfer fees.

Highlands Ranch resident Stan Hrincevich is determined to push back on HOA transfer fees.: "You are about to sell your house in a local planned community. All the paperwork is ready. You notice a single line item charging you $350, labeled as a transfer fee for “unreimbursed expenses” incurred — usually by your homeowners association’s property management company — during the transfer of the home to a new owner. You don’t get a receipt and you cannot finalize sale of your home if you don’t pay it.

A few hundred dollars in a transaction typically dealing with hundreds of thousands of dollars might not seem like a big deal. But for Highlands Ranch resident Stan Hrincevich the scenario is an injustice that bilks Colorado homeowners out of millions of dollars."


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Thanks to Robert in Colorado for this link. I've posted on this issue before and a number of people have identified transfer fees as a suspect practice that shovels money to property managers who (it is argued) don't do much to earn the fee. Let the comments begin!

YOU ASK. WE INVESTIGATE. Family debating HOA over Christmas wreath fine - Story

YOU ASK. WE INVESTIGATE. Family debating HOA over Christmas wreath fine - Story: "LAS VEGAS (KTNV) - A man living in the Arroyo Canyon subdivision near the 215 Beltway and Hualapai Way says his homeowners association is threatening to fine him $100 over a decorative wreath.

Milan Thakkar says his wife picked out the wreaths to decorate their front door and make it less plain. They say it's not a Christmas wreath, but their HOA sent a letter claiming they violated a rule that holiday decorations have to be taken down within 30 days of the holiday.

"It's petty. ... I can take it down in 2 seconds. ... It's the principle of it," he says."


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So there is a "principle" involved with displaying Christmas decorations in Las Vegas in April.

Fight about truck with HOA president gets man arrested

Fight about truck with HOA president gets man arrested: "JUPITER
A man upset that a Jupiter homeowners’ association had towed his truck was arrested last week after entering the group president’s home and threatening to retaliate, town police said."

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The association says that the truck was "towed from a grass area at the complex where it had been illegally parked for two days. Multiple attempts were made to contact its owner, the president said."

Tuesday, April 04, 2017

Homeowners In Limbo After Homebuilder Bankruptcy « CBS Dallas / Fort Worth

Homeowners In Limbo After Homebuilder Bankruptcy « CBS Dallas / Fort Worth: "A Dallas home builder’s bankruptcy has left homeowners on the hook for hundreds of thousands of dollars in unpaid labor costs."

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Yes, because going BK is a business strategy that real estate developers and builders use with regularity. Exhibit A being the current occupant of the White House.

Monday, April 03, 2017

Paris

I have been in Paris and Brussels for the last week or so, which is why I haven't been posting. You'd be surprised at how many things there are to do in Paris besides blogging!  But here's one observation you may find interesting. 80% of the owner-occupied housing in Paris is run by property owners' associations. To wit:

Règlement de copropriété
Co-ownership building régulations, laying out the rights and obligations of co-owners in the building, the method for calculating building fees, and the allowed use of the common areas and the individual apartments. 

HOA defrauded of millions accuses law firm of facilitating scheme – Las Vegas Review-Journal

HOA defrauded of millions accuses law firm of facilitating scheme – Las Vegas Review-Journal: " The homeowners association is trying to convince a judge that the fraud ringleaders could not have embezzled millions without the gross malpractice committed by a law firm that was hired in 2006 to protect the integrity of the Vistana HOA board elections.
 
The firm, Kummer Kaempfer Bonner Renshaw and Ferrario, did the opposite and concealed illegal behavior from its client, attorney Richard Haskin, who is representing the Vistana HOA, told a Clark County judge Tuesday.
Judge Mark Denton heard opening statements Tuesday in the civil case the Vistana HOA filed against the firm, which since has changed its name to Kaempfer Crowe. Only one of the firm’s lawyers, a first-year associate, ever faced criminal charges."


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The saga of the massive Las Vegas HOA fraud ring continues.

Wednesday, March 22, 2017

Tuesday, March 21, 2017

Abbott wants "broad-based law" that preempts local regulations | The Texas Tribune

Abbott wants "broad-based law" that preempts local regulations | The Texas Tribune: "CORPUS CHRISTI — As local control battles rage at the Texas Capitol, Gov. Greg Abbott is voicing support for a much more sweeping approach to the issues that have captured headlines.

"As opposed to the state having to take multiple rifle-shot approaches at overriding local regulations, I think a broad-based law by the state of Texas that says across the board, the state is going to preempt local regulations, is a superior approach," Abbott said Tuesday during a Q-and-A session hosted by the Texas Conservative Coalition Research Institute, an Austin-based think tank. 

Such an approach, Abbott added, "makes it more simple, more elegant, but more importantly, provides greater advance notice to businesses and to individuals that you’re going to have the certainty to run your lives." 

Abbott made the remarks in response to a moderator's question about legislation this session that would "prohibit any local ordinance from exceeding the standard set by the state.""


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Because conservative Republicans believe in devolving power to the local level...right up until Democrats control city governments,  and then suddenly Republicans become big believers in having the state governments controlled by Republicans make all the decisions.

Bozeman to study shifting HOA-managed parks to city maintenance district | City | bozemandailychronicle.com

Bozeman to study shifting HOA-managed parks to city maintenance district | City | bozemandailychronicle.com: "In the past, Mayor Carson Taylor has said a parks district could equalize a system where HOA members pay both HOA fees for parks and the city taxes that fund the parks department. It could also help the city pay for maintenance in the new TOP-bond parks, given that the measure didn’t include any funding for that.

According to a study by the Trust for Public Land, Billings and Missoula have already adopted parks maintenance districts. Missoula’s, the study says, levies a property tax assessment costing a typical homeowner roughly $20 a year."

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So Mayor Taylor is looking to relieve HOA residents of double taxation for parks. I assume the tradeoff is that everybody gets to use the HOA formerly-private parks?

Attack of the Killer HOA Fees - Trulia's Blog

Attack of the Killer HOA Fees - Trulia's Blog:

Here is a piece from Trulia (discussed in the post below) that finds that, "Between 2005 and 2015  HOA fees rose 32.4% compared to just 15.1% for the median U.S. home."

D.C. area HOA dues jumped nearly 50 percent between 2005 and 2015 - Curbed DC

D.C. area HOA dues jumped nearly 50 percent between 2005 and 2015 - Curbed DC: "Over the past decade, homeowner association (HOA) dues have skyrocketed across the nation and especially in the D.C. area.

UrbanTurf reported that dues rose 32.4 percent between 2005 and 2015 across the nation. This resulted in the median monthly dues changing from $250 to $331.

In the same amount of time, the median monthly HOA dues in the D.C. area rose from $259 to $387, a 49.4 percent increase."



Here is the Urban Turn piece.

Are condo & HOA bank deposits fully insured by Uncle Sam? - Loop North News

Are condo & HOA bank deposits fully insured by Uncle Sam? - Loop North News:

The answer is more complicated than you might think. Are the association's funds in an account in its own name? Or are they commingled in one big account in the name of the management company, that is way over the dollar limit on federal depository insurance? If so, “If the management company is complying with the FDIC’s rules for pass-through deposit insurance coverage, then each HOA the company is holding funds for in the commingled account would have up to $250,000 of deposit insurance coverage at that bank,” explained the FDIC memorandum.



But what if they are not complying with those rules for pass-through deposit insurance coverage?

Monday, March 20, 2017

Census data show HOAs present few economic benefits to taxpayers, homeowners, local governments – Independent American Communities

Census data show HOAs present few economic benefits to taxpayers, homeowners, local governments – Independent American Communities:

This is an interesting analysis of census data by Deborah Goonan. You can access the original data here.  She tries to get to the truth of several claims by the industry:

"The HOA industry is fond of bragging about the ever-increasing number of association-governed communities and housing units in the U.S., and makes grandiose claims that privatization of services in common interest, association-governed communities provides economic relief to both homeowners and local governments, keeping taxes low and home ownership more affordable."

Her goal is to see if these claims are supported by census data. Her answer is, "no." See what you think. 

But there are other things in the data that are beyond dispute, some corroborated by other data. For example, the overwhelming majority of new housing in this country is in some sort of community association. The National Association of Home Builders did their own survey, and they compare the census findings with their survey as follows:

"When analyzed by intended use, 72 percent of new homes “built for sale or sold” in 2015 were in a community association, up from 63 percent in 2010. Among “contractor-built” homes (built on owner’s lot with owner hiring a builder or a general contractor), 23 percent were within a community or homeowner’s association (up from 21 percent in 2010), and only 12 percent of “owner-built” homes (owner acts as the general contractor) were within a community association, essentially unchanged from the 13 percent reported in 2010. Another source of information on this topic is NAHB’s recent survey on the Typical American Subdivisions. One of the questions asks whether there is a HOA, condo, or other type of community association for the development. Results show that 80 percent of the subdivisions have one of these association types."

Note that community associations are 72% to 80% of new housing built by developers, but only 12 percent of owner-built homes.  So the notion of people voluntarily choosing association living, one of the common myths perpetuated by the industry, is clearly disproved. CIDs are a solution to supply-side problems, not the result of consumer demand. Developers and local governments have taken the choice out of the housing market. 

Thursday, March 16, 2017

HOA: S. Meck students skipping class, damaging property | WCNC.com

HOA: S. Meck students skipping class, damaging property | WCNC.com: "CHARLOTTE, N.C. -- Residents who live near South Mecklenburg High School say they’re fed up with the recent uptick of students who have been skipping school and roaming their neighborhoods.

“It is a little shorter to come through here than to come on the sidewalk, and so they come through,” says Jill Detweiler, who lives in a neighborhood that backs up to the school.

But some say the students aren’t just roaming, they’re causing property damage. Hamlin Park’s HOA called police March 7 after they say two students bent their perimeter fence causing $150 in damage.

The president of the association later distributed notices to every resident.

“They’re just asking us to be aware of anybody coming through, if anybody’s damaging the fences. Anybody coming through that doesn’t belong here,” says Detweiler."


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Wow. A regular crime wave.




Trump Budget: Air Traffic Control Privatization Proposed | Fortune.com

Trump Budget: Air Traffic Control Privatization Proposed | Fortune.com:



What could possibly go wrong?

The super-rich in London: they live amongst us, but you won’t run into them (if they can help it) | British Politics and Policy at LSE

The super-rich in London: they live amongst us, but you won’t run into them (if they can help it) | British Politics and Policy at LSE

"Of course this is now a world of pronounced inequality and one in which the public realm and social investment are increasingly at stake in a political vision of the world in which trickle-down economics and naked personal ambition are feted by politicians and think-tanks. The result of these inequalities and social conditions is the production of urban anxieties that translate into bunker style homes as well as the opulent display of defensive measures like remotely accessed gated developments, as affluent residents of the street in Lanchester’s novel Capital learn ‘we want what you’ve got’."

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The same is true in the US.

Monday, March 13, 2017

State lawmakers from Miami-Dade submit condo reform law | Miami Herald

State lawmakers from Miami-Dade submit condo reform law | Miami Herald: "After decades of struggling against a condo regulatory system that experts say perpetuates impunity and makes it easy to commit fraud, thousands of condominium owners in Florida may finally see substantial changes in state laws.

Earlier this month, state senators and representatives from Miami-Dade filed a bill that includes 21 reforms to Chapter 718 of the Florida statutes. The reforms seek to correct gaps in the laws and establish criminal penalties for some irregularities in the administration of condos.

The plan classifies falsification of documents, an offense that now carries no legal consequences, as a third degree felony and sets prison terms. It also criminalizes electoral fraud, such as the falsification of signatures on ballots for condo boards of directors, and refusing access to administrative records with the intent to cover up crimes.

The proposal came one year after el Nuevo Herald and Univision 23 published a series of investigative stories on condo abuses in South Florida
, like electoral fraud, falsification of signatures, conflicts of interest, embezzlement and cases of fraudulent bidding.

The series also exposed the lack of enforcement by authorities, from local police departments who refused to investigate allegations of fraud, to widespread negligence at the state agency in charge of enforcing condo laws and regulations and investigating complaints."




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HOAs and condo association private governments are vulnerable to embezzlement and fraud, as well as election fraud and manipulation, because in many situations there is virtually no oversight of their actions. Often only a handful of owners are even paying attention to what the association is doing, there is no public disclosure of finances, and state and local governments rarely take an interest in financial oversight of associations. Obviously there should be criminal penalties for fraud and embezzlement, and local prosecutors should take these cases seriously instead of telling people to to away and file a civil suit. But the threat of criminal prosecution alone won't solve the problems. There need to be other incentives, such as some form of mandatory public disclosure of association finances--not just to people who have already signed a contract to buy, and more free or low-cost education programs for all owners.



Also, we need to keep in mind that the rule of law only works in any society if  99% of the time arrest and prosecution are unnecessary.  Informal norms have to govern people's behavior so that they behave legally without having any contact with enforcement authorities. Most of the time that is true of association directors and officers, but if we want to improve this situation then a lot more sunlight on association finances is necessary.

Where Segregation Has Worsened the Housing Divide - CityLab

Where Segregation Has Worsened the Housing Divide - CityLab:



Over the last two decades, America has become increasingly polarized by both class and geography. As the middle class and its neighborhoods have declined, our nation has increasingly divided into rich and poor, and neighborhoods of concentrated affluence have become surrounded by larger spans of concentrated disadvantage.



This pattern is both reflected and reinforced by housing prices. An analysis released today by the real estate company Trulia finds considerable overlap between racial segregation and polarization of housing values across America’s 100 largest metropolitan areas.

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Gated communities in particular, and CIDs in general, seem to have contributed to income segregation. They are usually targeted narrowly to certain bands of the income distribution, and their enforced uniformity in design, etc., caters to common tastes and lifestyles.

Sunday, March 12, 2017

Homeowner and HOA engage in bluebonnet battle | kens5.com

Homeowner and HOA engage in bluebonnet battle | kens5.com

At the Park At Two Creeks they have a homeowners association that says each yard has to be well manicured with no weeds and grass cut below six inches. But one property is causing a bit of a disturbance. "We are passionate about our bluebonnets," said Dee Ann Havely, who has lived in the subdivision for 5.5 years, when her bluebonnet bonanza began. "I planted the first ones. They were just small plants five years ago." But now there are hundreds of them covering much of her front yard..."I think common sense tells you: Sometimes rules are meant to be broken," she said. "And I think these flowers should stay."

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Interesting philosophy of rule enforcement. Her "common sense" tells her that sometimes rules are meant to be broken, and by amazing coincidence the rule she has broken is the one that is meant to be broken.

Friday, March 10, 2017

Watch young children crash dad’s important Skype interview with the BBC | WGN-TV

Watch young children crash dad’s important Skype interview with the BBC | WGN-TV:

Best BBC interview ever.

HOA buys personal alarms for kids following attempted abduction - Story | WOFL

HOA buys personal alarms for kids following attempted abduction - Story | WOFL:

"The community is not waiting for law enforcement to increase their sense of security.  Instead, they are footing the bill for each kid to have a personal alarm. "We've raised over $2,000 in the past couple of days," said parent Stephanie Lerret.  "It's a dual-button switch where the student has to hit both buttons to activate if they're in an uncomfortable situation."
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I can't tell from the article whether or  not this headline is correct. "HOA buys" suggests that the association is using their funds to buy the alarms. But the body of the article seems to suggest that parents, or the association BOD, are raising money from voluntary contributions and buying the alarms with those funds. The latter approach seems more likely to me, given that using money from assessments for an expense like this could be questioned.

Thursday, March 09, 2017

These States Aren’t Waiting for Trump to Get Funds for Infrastructure

These States Aren’t Waiting for Trump to Get Funds for Infrastructure: "Republican leaders from at least six states are pushing to raise gasoline taxes or other fees to pay for upgrading roads and bridges, saying they can’t count on President Donald Trump’s $1 trillion infrastructure plan to deliver what they need.

“If a giant golden goose with a red and white and blue flag on it flies over Indiana and drops a golden egg, first we’re going to make sure it’s a golden egg and not some other dropping,” said state Representative Ed Soliday, a Republican who is helping to lead an effort that would raise the state gas tax in Indiana to 28 cents per gallon (from 18 cents), increase registration fees and explore tolling."

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See the post below on the nation's crumbling infrastructure. Tax increases, folks. There is no way around it.

America's infrastructure still rates no better than D+, engineering experts say | US news | The Guardian

America's infrastructure still rates no better than D+, engineering experts say | US news | The Guardian: "America is literally falling apart. The most authoritative report of the nation’s infrastructure gave the country’s crumbling roads, bridges, dams, schools and other essential underpinnings a D+ grade on Thursday. Not a single element of America’s framework received an A grade. The American Society of Civil Engineers’ quadrennial infrastructure “report card” painted a grim picture of the US’s backbone. According to the organization’s analysis, there hasn’t been much improvement in the state of America’s transportation, water, energy, education and waste management programs since the last report was released, in 2013...The report comes after Donald Trump pledged to rebuild America’s broken infrastructure on the campaign trail, plans that appear to have stalled amid a backlash against government spending. It also comes after a series of disasters, including lead in the water of Flint, Michigan, and other municipalities, and the evacuation of 20,000 in California after the near-collapse of a major dam."

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We are drowning in fake crises that politicians use to generate fear so they can control people. Here's a real crisis, and one that only government can solve. Trump talks about it, but has no proposal that will work. Shoveling more tax credits to big business is not going to lead them to suddenly start paying for rebuilding bridges and constructing high-speed rail.

Miami Worldcenter secures bond financing through community development district - South Florida Business Journal

Miami Worldcenter secures bond financing through community development district - South Florida Business Journal

"The $74.1 million was one of the largest CDD bond issuances in South Florida in recent years. For Miami Worldcenter, the CDD bonds will fund street improvements, modernized mass transit stations, new landscaping, widened sidewalks, more water and sewer capacity, electrical work, and new street lights. Located on the north side of downtown Miami, the $2 billion Miami Worldcenter will include condos, apartments, retail, restaurants, and a hotel/convention center."
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Florida has hundreds of these multiple-function special districts that are the building industry's new substitute for cities. Special districts like this can issue bonds and do most of the things that municipalities can do, but they don't have to operate on the one person, one vote principle. They can allocate voting control on the basis of property ownership. That way developers can make all the decisions for the district as long as they control most of the acreage, which might be forever.  That comes in handy. Imagine that the subdivision has the same boundaries as the special district. If you buy a home in the subdivision, you are a taxpayer for the district and there is a line on your property tax bill for the amount you pay to the district. Developers have been known to make nice deals with themselves before they sell any of the lots.  They have the district they control purchase the common elements from themselves (as owner of all the property in the subdivision). Then tens of millions of dollars from the bond sale goes straight into the developer's pocket, and the bondholders get paid off over the next few decades from the property taxes paid by the residents of the district, who are none other than the people who buy the units in the subdivision. 

Portland homeowners win reprieve from maintaining city's trees | OregonLive.com

Portland homeowners win reprieve from maintaining city's trees | OregonLive.com

"Portland Mayor Ted Wheeler plans to quash an effort by city bureaucrats to quietly expand homeowners' responsibilities to care for trees on city-owned land.The proposed new rule would have required Portland property owners to cut down dangerous trees on city property adjacent to their land, even if the trees were located far from the private property...The change would have, for instance, cost at least three Southwest Portland homeowners as much as $3,500 by making clear that they are responsible for cutting down trees more than 50 feet away and inaccessible from their property Current code requires property owners to take care of dying or dangerous trees on their own property, "any adjacent sidewalks, planting strips and trees fronting or upon such private property." The changes would have added "adjacent unimproved or partially-improved rights-of-way" to the places where private property owners are required to remove problem trees."
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I have always found it interesting that city governments impose on homeowners the responsibility to maintain public property. It is common to require them to shovel snow from sidewalks, for example. But dealing with dangerous trees is a much bigger responsibility. It is expensive and requires judgment. And extending that responsibility to adjacent areas is quite a step.

Lake Charleston homeowners ask HOA for security cameras in neighborhoods after attempted abductions - wptv.com

Lake Charleston homeowners ask HOA for security cameras in neighborhoods after attempted abductions - wptv.com

Now Harman says he and his wife are pushing for security cameras in the Lake Charleston Community.  "One camera for their AC unit, one camera for their clubhouse," said Harman naming the surveillance that exists at the community clubhouse. "Nothing for security wise for the community itself." 
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So before making a decision, the HOA is asking the Sheriff's office to do a survey to find out what other associations are doing. I find that a strange request. Are the public law enforcement officials supposed to serve as private security consultants for HOAs? 



Monday, March 06, 2017

HOA critics: Proposed Missouri legislation won’t protect homeowners | The Kansas City Star

HOA critics: Proposed Missouri legislation won’t protect homeowners | The Kansas City Star: "Missouri homeowners longing for more accountability in their homeowners associations and protection from overzealous HOA boards may not find the answers they want in legislation recently proposed in the state House and Senate.

While proponents say the measures will safeguard homeowners and ensure that they know what they’re getting into when buying a home in an HOA, some homeowner advocates say the proposals — one is called the Missouri Homeowners’ Bill of Rights — are so watered down that they instead protect the $85 billion HOA industry."

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Toward the bottom the article notes that there is pending legislation in a number of states now. So are we in the middle of a new wave of attempts at HOA/condo reform?  There is a certain predictability to this. The people who identify themselves as "homeowner advocates" are opposed to anything CAI is for, but they don't have a well-defined counter-agenda of their own. They are divided between abolitionists who want to destroy the entire institution of common interest housing and reformers who think it can be made to work better.  That's why the outcome of these struggles is are almost always either CAI-backed bills that pass, or nothing at all passes.




Why Cities Can't 'Manage Decline' - CityLab

Why Cities Can't 'Manage Decline' - CityLab: "Policy, in its simplest form, is just jargon for group desire, marshaled through influential people. Desire comes down to fear or hope, as Dutch philosopher Baruch Spinoza famously insisted. When fear is your dominant driver, the policy becomes one of scarcity and security. When hope is dominant, the policy is viewed through possibility and aspiration. The key, here, is while “serious” policy decisions are supposed to be “smart,” they are derived viscerally. No wonder so many gut decisions on things like urban renewal end poorly."

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So why, says Richey Piiparinen, should cities like Cleveland assume that they will continue to decline, when nobody knows what the future may hold for any city?

Wednesday, March 01, 2017

Man blew up his own house in Wales because he was depressed at being 50 | Metro News

Man blew up his own house in Wales because he was depressed at being 50 | Metro News:



Geez. What's he doing to do when he hits the big six-oh?

Construction Defects in Community Associations

Construction Defects in Community Associations:



CAI has a report out on proposed state laws to make it harder for HOAs and condo associations to sue developers for construction defects. They say that, "As of February 28, legislation has been introduced in Arizona, Colorado, Florida, Massachusetts, Maryland, Minnesota, New Jersey, Oregon, Texas, Utah and Washington." Developers and contractors have political influence and often can persuade lawmakers that CD litigation raises the price of housing. Really? If building correctly is too much of a burden, maybe they should find another livelihood. Because if they build it right in the first place, there shouldn't be a CD lawsuit--or at least, not a legitimate one. There have been some fraudulent CD cases, such as the ones filed in the Las Vegas HOA fraud ring led (or fronted, depending on who you believe) by contractor Leon Benzer. But most CD suits are legitimate, and often the owners have no real alternative but litigation because the damages may not be covered by insurance and they can't afford to pay millions to fix the defective construction out of their own pockets. So I think state legislatures should tread carefully here. If defects go unrepaired, there are adverse consequences for the owners and maybe the whole neighborhood.

Monday, February 27, 2017

Grant Co. leaders: Ark Encounter doesn't live up to economic promise

Grant Co. leaders: Ark Encounter doesn't live up to economic promise:

"The county is teetering on bankruptcy and is trying to balance the budget. Wood said they were to the point where jobs may have to be cut. He will propose a 2% payroll tax at next week’s fiscal court meeting. He blames prior fiscal courts for the budget crisis, not the Ark. But he said the Ark had not lived up to its promise. “I was one of those believers that once the Ark was here everything was going to come in. But it’s not done it. It’s not done it. I think the Ark’s done well and I’m glad for them on that. But it’s not done us good at all.”"
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So the county's ship didn't come in?

Friday, February 24, 2017

Frannie: Privatization Is A Pipe Dream - Fannie Mae (OTCMKTS:FNMA) | Seeking Alpha

Frannie: Privatization Is A Pipe Dream - Fannie Mae (OTCMKTS:FNMA) | Seeking Alpha: "Summary:   The prospects for GSE privatization have been significantly reduced due to setbacks in the courts.

The arguments in support of investing in the GSEs are weak, and these stocks have further downside from Mnuchin and the U.S Treasury.

While most of the downside is over, Fannie and Freddie are still compelling shorts."




Thursday, February 23, 2017

Dismal Results From Vouchers Surprise Researchers as DeVos Era Begins - NYTimes.com

Dismal Results From Vouchers Surprise Researchers as DeVos Era Begins - NYTimes.com: "But even as school choice is poised to go national, a wave of new research has emerged suggesting that private school vouchers may harm students who receive them. The results are startling — the worst in the history of the field, researchers say."

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Privatization has been sold by ideologues as a utopian program of private alternatives that were supposedly always better than public sector service provision. But in one policy area after another, the results have not lived up to the hype. But the private service providers will continue to oversell their wares because they make a fortune.

Monday, February 20, 2017

Homeowners outraged that Millennium developers, HOA won't share building's rescue strategy - San Francisco Business Times

Homeowners outraged that Millennium developers, HOA won't share building's rescue strategy - San Francisco Business Times:

 "A strategy proposed by the developer and HOA of San Francisco's sinking, tilting Millennium Tower to fix the building is coming under fire this week from homeowners, who are frustrated that the group refuses to detail its repair strategy...Last August, it was revealed that the 58-story Millennium Tower has sunk more than a foot and is leaning two inches, and now faces a rash of lawsuits from both regulators and angry homeowners worried about their investment in the $350 million building.

Thus far, the San Francisco City Attorney has sued the developer, while two Millennium Tower homeowners have filed a civil claim against both the city and their neighboring Transbay Joint Powers Authority, and a separate group of 20 homeowners has sued Millennium Partners, San Francisco’s Department of Building Inspection, the City Attorney and the Transbay Joint Powers Authority for allegedly conspiring to withhold information about the building's structural issues."

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The situation is in mediation. The association says they are bound by the mediation agreement not to talk about the repair plans. That would be consistent with normal procedures for any mediation. But big HOA disputes tend to spawn multiple claims by various people that can make settlement difficult.




Friday, February 17, 2017

Mortgage delinquencies among some homeowners just spiked, spelling trouble

Mortgage delinquencies among some homeowners just spiked, spelling trouble:



"Federal Housing Administration mortgage delinquencies jumped in the fourth quarter for the first time since 2006, the Mortgage Bankers Association reported Wednesday. The FHA insures low down-payment loans and is a favorite among first-time homebuyers. The seasonally adjusted FHA delinquency rate increased to 9.02 percent in the fourth quarter from 8.3 percent in the third quarter, MBA data show. The jump, which followed the lowest delinquency rate since 1997, was driven by loans made since 2014 and early-stage delinquencies, those just 30 days past due."

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Well, that isn't good. Especially this part: "... the foreclosure activity increases in states such as Arizona, Colorado and Georgia are more heavily tied to loans originated since 2009 — after most of the risky lending fueling the last housing boom had stopped,"

Thursday, February 16, 2017

Appeals court dashes hopes for investors who bought foreclosed homes in Nevada | Las Vegas Review-Journal

Appeals court dashes hopes for investors who bought foreclosed homes in Nevada | Las Vegas Review-Journal:

See the post below.  This article explains that the real beneficiaries of the Nevada Supreme Court's decision regarding the superlien statute are investors who acquired an estimated 2,000-3,000 properties by just paying off the association's lien for unpaid assessments, fees, and costs. But the 9th Circuit left them in limbo when they declared the statute unconstitutional. Then the Nevada SC rode to the rescue again and said the statute is just fine. I'm curious as to what is going on now. Can the investors sell these properties with clear title, or is there still confusion or uncertainty about whether the purchases by these investors can be rescinded and the banks' first mortgages restored? Does anybody know?

The Super-Priority Saga Continues – Nevada Supreme Court Holds That NRS 116’s Notice Provisions Are Constitutional | Financial Services Perspectives

The Super-Priority Saga Continues – Nevada Supreme Court Holds That NRS 116’s Notice Provisions Are Constitutional | Financial Services Perspectives:



Yes, indeed. The saga continues.  To recap:

1.  In SFR Investments Pool v. US Bank, the Nevada Supreme Court ruled on 9/18/2104 that an HOA nonjudicial foreclosure on their "superlien" for unpaid assessments extinguishes a first mortgage. The bank said that they had been denied due process of law because they didn't have adequate notice of the NJF.

2.  But then on 8/15/2016,  the 9th Circuit Court of Appeals ruled in Bourne Valley Court Trust v. Wells Fargo Bank that this law violates the due process rights of the bank holding the first mortgage. Where is the state action that gives rise to a due process claim? It lies in the state legislature enacting the statute that gives the HOA the right to do this. What is the denial of DP? It relates to the adequacy of the notice to the first lienholder that the statute requires.

3.  But stop the music: The Nevada Supreme Court struck again. On 1/26/2017, they ruled in Saticoy Bay LLC v Wells Fargo bank that there is no state action, and thus no constitutional claim for deprivation of due process.



The Nevada Supreme Court and the federal 9th Circuit Court of Appeals have different rulings on the same statute. So, what does this mean? I think it probably means that the choice of courts makes all the difference. In Nevada state courts, the Nevada Supreme Court is the final authority. But if the case is in federal court, the 9th Circuit's ruling is the law.



In situations like this, the US Supreme Court has been known to grant certiorari in order to decide which interpretation should prevail.  Rule 10 of the USSC Rules provides that they are more likely to take a case if "(b) a state court of last resort has decided an important federal question in a way that conflicts with the decision of another state court of last resort or of a United States court of appeals," which is just the situation. But somebody has to present this issue to them in a real case, and I do not know if that is in the works or not.

And the statute in question was amended after the SFR case, so I defer to NV lawyers as to how big an issue this will be going forward. The language in the amendment requires more detailed notice, and includes this: "(II) If, not later than 5 days before the date of the sale, the holder of the first security interest on the unit satisfies the amount of the association’s lien that is prior to that first security interest pursuant to subsection 3 of NRS 116.3116 and, not later than 2 days before the date of the sale, a record of such satisfaction is recorded in the office of the recorder of the county in which the unit is located, the association may foreclose its lien by sale but the sale may not extinguish the first security interest as to the unit."  So now (if I am reading all this correctly) the bank gets more detailed notice and has a chance to pay off the delinquent assessments so their lien doesn't get extinguished.

Thursday, January 26, 2017

Survive the coming apocalypse inside a big pipe buried underground / Boing Boing

Survive the coming apocalypse inside a big pipe buried underground / Boing Boing

"Atlas Survival Shelters sells huge corrugated pipe shelters outfitted for living with air filtration systems, Co2 scrubbers, and power generators. A 10' x 20' shelter goes for $30-$40,000 and the "Hillside Retreat," a 10' x 51', runs as high as $109,000. Options include a big screen TV, electric fireplace, oak flooring, hatch camouflaged as a boulder, and many other fine amenities."

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As long as nobody figures out that the boulder is a hatch, you are on easy street.

Tuesday, January 24, 2017

In a community of million-dollar homes, a fight over a $500 mailbox ends in court - The Washington Post

In a community of million-dollar homes, a fight over a $500 mailbox ends in court - The Washington Post:



"The $35 wooden mailbox Keith Strong bought in 2009 seemed charming and functional for the home he shared with his wife in a posh golf community in the suburbs of Washington. It was a newer version of the mailbox the homeowners association previously approved and had sat at the end of their driveway since the couple moved to their Bowie-area home four years earlier. But no more than two months after Strong installed his new mailbox, he received an order to dump it — for a $500 mailbox upgrade. The board of the homeowners association voted to require all residents in the Woodmore golf community to buy metal mailboxes, monogrammed with the letter “W” and mounted on a decorative post. The $500 mailbox mandate angered Strong and others in the community, launching him into a seven-year fight that finally ended this month when a Prince George’s County judge signed, sealed and delivered a ruling that the board of the Pleasant Prospect Home Owners’ Association overstepped its bounds with its postal pronouncements. It’s a victory that cost Strong $33,000 in legal fees — roughly the price of 66 of the new bronze-colored mailboxes"

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This Washington Post story highlights several common features of HOA litigation: the triviality of so many of these disputes; the cost of using the court system that we all pay for to litigate them; and the way owners have to spend a fortune to contest association decisions;

Wednesday, January 11, 2017