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. 


pvtgov said...

Thanks Evan for clarifying the tons of data on this issue. We need more solid analysis to correct "alternative facts" and "fake news."

pvtgov said...

Let me clarify. The special interests specialize in alternative facts and fake news.