Home and condo associations hit by soaring insurance rates: South Florida Sun-Sentinel
It costs a pretty penny to insure the lakes, walkways, swales, athletic courts and other amenities dubbed "common areas" that help lure buyers to private communities.

Homeowner and condominium association leaders in Palm Beach and Broward counties say insurance for master policies has gone up 50 to 300 percent in the past two years.

Only a few companies in Florida write master policies, and community leaders are demanding that the state investigate the skyrocketing rates.

[there's more...]


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This is a good article with lots of specifics. The situation is troubling, because on the one hand the associations are hitting the limit of affordability for liability policies, but on the other hand if they are uninsured they face massive uninsured judgments for slip and fall accidents by the pool or any other major injury.

Hate your homeowners association? - Apr. 22, 2004
Here's a CNN piece that I missed from a few months ago.

BEND, Ore. (CNN/Money) – Three years after moving into a new 4,700-square-foot home in Brook Hills, a gated community near San Diego, Sonni and James Bass are caught up in an expensive legal battle with their homeowners association.

Brook Hills is suing the Basses, who are returning the favor with a countersuit. Why? The association says they took too long to do their landscaping. Plus, they installed a light on their tennis court without approval.
"
All my clients have tried to do is enforce the rules," said Michael Kim, an attorney with Peters & Freedman, the firm that represents Brook Hills and about 500 other homeowners associations.
{more}

The New York Times > Home & Garden > Tomb Trouble: Nimby Strikes at Woodlawn
LEONA HELMSLEY, the real estate heiress and boldface prima donna, is suing the Woodlawn Cemetery in the Bronx for $150 million and planning to disinter and relocate the body of her dear departed husband, Harry. The late Mr. Helmsley must be moved from the family mausoleum at the historic burial ground, the suit says, because of the ruination of the "open view, serenity and tranquillity."

Mrs. Helmsley's complaint, first reported Monday in The New York Post, is that the "perpetual beauty" and "peaceful solitude" of the spot have been destroyed by the latest of many community mausoleums to be built at Woodlawn. But the view Mrs. Helmsley describes as forever lost is bleak: the access ramps to the Major Deegan Expressway, a traffic light at Jerome Avenue and 233rd Street, and locked gates where the cemetery's grand entrance once was.


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So the pursuit of status continues even after death. Ever hear of a dead guy complaining that his view has been blocked?

Are you irrationally exuberant? - Jul. 27, 2004
I would say a bubble is happening," said Robert Shiller, whose book "Irrational Exuberance" (Princeton University Press, 2000) warned, correctly, that the stock market was grossly overvalued by investors' unfounded optimism.

"When it's going to burst is the real question," he said. "It's difficult [to know]."

The Yale economist and principal at real estate firm Fiserv Case Shiller Weiss is now working on the book's second edition, which will among other things look at whether America's obsession with the stock market has been displaced by exuberance for real estate.

During a housing bubble, he said, buyers who would otherwise consider a house too expensive go ahead and buy anyway because they overestimate future price appreciation and underestimate risk. The bubble bursts, or deflates, when buyers are no longer so sure that prices will continue to increase.


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Read it all and see if you agree with Schiller. I think he may be wrong about this. I can see problems happening in California, where the prices are ridiculously inflated, but not in the South and Midwest. I think that certainly prices here (the Chicago area) reflect rational market forces.

Yahoo! News - Residents Poke Fun at Topeka With Slogans

Municipal boosterism at its most modest...

TOPEKA, Kan. - The city of Topeka is looking for a new slogan, but some residents just couldn't resist poking fun at their city's image.



Officials planned to begin a contest in October, with the winning motto to be announced around Dec. 5, Topeka's 150th anniversary.


But The Topeka Capital-Journal decided to get a head start.


Some suggestions that aren't likely to win official approval: "Topeka, you won't get a lot of unwanted relatives visiting you," and "Topeka — not as bad as you think."


Mayor James McClinton said Topeka has positive aspects like the Brown v. Board of Education National Historic Site and the Statehouse that it can promote and shouldn't get sidetracked by naysayers.


"There's so much about Topeka that we all know and that we've lived over the years," McClinton said.


The slogan will be used to promote the city so it must portray it favorably — unlike many of the suggestions that the Topeka Convention and Visitors Bureau has received already.


"I didn't think they were terribly positive," said Stephanie Wallingford, the bureau's marketing and tourism manager.


And if Terry Carpenter's suggestion — "City of morons" — is any indication of the prevailing sentiment, Topeka may just forgo a slogan entirely.


"No slogan is better than a bad one," Wallingford said. "Maybe we don't use one. Maybe we get our theme knocked out and get some graphic that we can use that says it all."

Chicago Tribune | Family of boy sues condo group
By Chris Young
Tribune staff reporter
Published August 1, 2004

A family with a disabled child sued their Palos Park condominium association Friday in federal court, saying the association refused to let them install a wheelchair ramp at the entrance of their new home.

The child, Phillip Baron, 14, cannot stand or walk by himself and needs a motorized wheelchair.

The Barons contend that the Baron Condominium Association, which has no relation to the family, illegally discriminated against them under the Fair Housing Act and Illinois Condominium Property Act.

"Under the Fair Housing Act, it's a reasonable request," said Barbara Baron, 40, the boy's mother. "We can't move in until the ramp is installed. It's upsetting."

The act requires the association to allow "reasonable modifications that enable persons with disabilities to use and enjoy housing on par with non-disabled individuals," the lawsuit said.

Barbara Baron submitted two ramp proposals and letters to the association, including one dated June 10 and drafted by an attorney, which the association has not responded to, she said.

The suit demands that the association let the Barons install the ramp and pay damages for "pain, suffering and humiliation" and "willful, malicious or reckless misconduct."
[more]

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If I live to be a thousand I will never understand why HOAs do this sort of thing.

Assault-by-smoke trial fires up today
Here's a report on some creative condo litigation from the Cleveland Plain Dealer...

Robert Zangrando claims he has been assaulted by cigarette smoke. The smoke that wafted into his condominium from the cigarettes held outside by his neighbor, Nicole Kuder, was willfully blown in his direction and invaded his home, he says, which led to his additional allegations of battery and trespass. The right to breathe smoke-free air is the focus of a trial scheduled to begin today in Summit County Common Pleas Court. It is likely to include a visit by the jury to the adjoining Stow condominiums, testimony from expert witnesses and testimony on how the errant smoke led to Zangrando's health problems and decreased the value of his property. In a case that is attracting some national attention, Zangrando, 71, is seeking more than $50,000 in damages from Kuder, 28, who is moving. Zangrando, who said he has emphysema, said his health was damaged during the two years she lived there.

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Expert witnesses, yet. I didn't know there were experts on second-hand smoke "willfully blown" from OUTDOORS into condominium units. Wow. Must be like some comic book character--Megalungs, or The Big Wind, or Superblow, or Captain Hurricane, or something. And it's not enough that defendant Kuder is moving out. No. It is still full speed ahead for the Zangrando Litigation Express.

Marbury v. Madison (1803)
Here's what the 36 "wall of shame" members of Congress should have read before putting their names on the ridiculous bill referred to below:

The constitution vests the whole judicial power of the United States in one Supreme Court, and such inferior courts as congress shall, from time to time, ordain and establish. This power is expressly extended to all cases arising under the laws of the United States; and, consequently, in some form, may be exercised over the present case; because the right claimed is given by a law of the United States.

In the distribution of this power it is declared that "the Supreme Court shall have original jurisdiction in all cases affecting ambassadors, other public ministers and consuls, and those in which a state shall be a party. In all other cases, the Supreme Court shall have appellate jurisdiction."
..........
If it had been intended to leave it in the discretion of the legislature to apportion the judicial power between the supreme and inferior courts according to the will of that body, it would certainly have been useless to have proceeded further than to have defined the judicial power, and the tribunals in which it should be vested. The subsequent part of the section is mere surplusage, is entirely without meaning, if such is to be the construction. If congress remains at liberty to give this court appellate jurisdiction, where the constitution has declared their jurisdiction shall be original; and original jurisdiction where the constitution has declared it shall be appellate; the distribution of jurisdiction, made in the constitution, is form without substance.
..................
The authority, therefore, given to the Supreme Court, by the act establishing the judicial courts of the United States, to issue writs of mandamus to public officers, appears not to be warranted by the constitution...

Thus, the particular phraseology of the constitution of the United States confirms and strengthens the principle, supposed to be essential to all written constitutions, that a law repugnant to the constitution is void; and that courts, as well as other departments, are bound by that instrument.

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Read the whole thing. Everybody should. Especially the "Bonehead 36."

HR 4892 IH
Here's the text of the bill referred to below, including the names of the brain-trusters who co-sponsored it with Representative Istook.

Congressman Ernest J. Istook, Jr. (OK05) :: Press Release :: Istook Introduces National Marriage Law

This is completely off-topic, but I had to point it out. Here is a great example of legislative devolution. Once upon a time, we are told, people elected the best and brightest among them to Congress. Now, at least in the 5th District of Oklahoma and 35 (!) other districts, they send nincompoops like Ernest Istook (R) who have never heard of Marbury v. Madison, the United States Supreme Court's 1803 ruling that established judicial review. Regardless of what you think of gay marriage, this bill is the dumbest, most ignorant piece of legislative grandstanding in recent memory.

Istook, who is rabidly opposed to gay marriage, has just introduced what is called a "court-stripping" bill (named the "Marriage Unity Law") that would take away the subject matter jurisdiction of the federal courts to hear challenges to the Defense of Marriage Act. The point is this. First, a gay couple who got married under Massachusetts law will move to another state, say, Pennsylvania. They will ask to have their marriage recognized there under the Full Faith and Credit clause of the US Constitution. Pennsylvania will say, sorry, we don't have gay marriage here, and under the Defense of Marriage Act we don't have to recognize your Massachusetts marriage. The gay couple will then sue in federal district court in Pennsylvania to have the Defense of Marriage Act (a 1996 law signed by Bill Clinton) declared unconstitutional.

Enter the Marriage Unity Law. The bill repeats the main point of the Defense of Marriage Act: "Marriage in the United States shall consist only of the union of a man and a woman." Then it goes on to take away the jurisdiction of the federal district and circuit courts to hear challenges to that principle: "Except as provided in paragraph (1), no Federal or state court shall have jurisdiction to hear or determine a claim arising under this section."

Now, here comes the monumental ignorance. What is in paragraph (1), the exception to the "no jurisdiction" rule? Here it is: "The Supreme Court of the United States shall have original jurisdiction to hear and determine a claim arising under this section."

Every lawyer, every first-year law student, and every undergraduate student with a course in Constitutional Law under his or her belt knows that in Marbury v. Madison the Supreme Court used the power of judicial review for the first time to pronounce a law passed by Congress unconstitutional because it changed the original jurisdiction of the U.S. Supreme Court, something that can only be done by amending the Constitution.

Now, we have 36 people in the House of Representatives who know less about the most basic principle of constitutional law than the average political science undergraduate student. How can this be possible, when so many members of the House are attorneys? How can such a bill be introduced at all, and more to the point, how can 35 other people put their NAMES on it?

ABC13.com: Girl Scouts won't have to break the law anymore
And you thought HOAs were bad...


By The Associated Press
(7/29/04 - SPRINGDALE, AR) — Girl Scouts in Springdale, Arkansas, don't have to worry about breaking the law. This week, a new city ordinance takes effect, legalizing door-to-door sales. Local Girl Scout leaders say they never realized their annual cookie drive had been illegal. The city council legalized solicitations, with a few strings attached. Homeowners may post signs requesting not to be disturbed or sign up for a "do-not-knock" roster. One local Girl Scout leader is pleased with the council's actions. She says people look forward to buying their Thin Mints and other cookies from neighborhood scouts.

Thoughts on the Pennsylvania slot machine bill

I've been off the air while taking the Illinois bar exam, so I have a lot to catch up on now that I'm back.  First, I think the PA slot machine thing is very significant.  It is a great example of the gap between what state and local government are providing and what taxpayers are willing to pay for.  The fact is that probably 25% of what state and local governments do, the middle class suburban taxpayer--the people paying the bills for goverment--would cut in a heartbeat.  People want basic services at low cost, nothing more.  Politicians want to deliver all sorts of stuff--goodies to their cronies, payoffs to organized interests that support their campaigns, social welfare services, life sentences for stealing cookies with two prior felonies,  massive new government office buildings named after politicians, and on and on. 

I don't buy the Democratic party's mantra that we all really want all this stuff but just need to be educated into understanding that we have to pay more taxes for it.  Once upon a time, I did.  But the evidence is piling up that the contrary is true.  Most obviously,  most taxpayers don't want to pay for urban dysfunction any longer, and that's where a lot of the money is going.  For example, a ton of dough is going directly into the pockets of unionized public school teachers and administrators who are grotesquely overpaid, given how awful urban public schools are.   Take a look at the performance of the Philadelphia city school system, for example.

If PA (along with Illinois, and other states) has to resort to disguising taxation as gambling, it's time to cut services. 

How does this relate to HOAs and privatization?  Very directly.  Nobody likes taxes or assessments, but the HOA/special district model--paying fees for direct local services--probably has more support than paying general purpose state and local taxes.  The problem is that the HOAs are run so badly.  If they worked like they are supposed to, stopped the petty over-regulation, and confined themselves to providing good services at the lowest possible cost, they wouldn't have much opposition in principle because it's better than shoveling money down the governmental rat hole.  Exhibit A is California.  Sure, there's some anti-HOA sentiment.  But compare it to the rage at state government that swept Gray Davis out and the Governator in, and of course the property tax revolt of 1978-1983. 

I'm not talking about what's right and wrong here.  I'm talking about what people want and are willing to pay for, and how they want to pay for it. 

 

CNN.com - Slot machines may soon be legal in Pennsylvania - Jul 4, 2004
HARRISBURG, Pennsylvania (AP) -- The state House of Representatives passed and sent to the governor a bill to legalize as many as 61,000 slot machines in Pennsylvania.

As the Legislature's marathon election-year session continued early Sunday, the House also appeared likely to approve a companion measure that would eventually funnel $1 billion a year of the new gambling tax revenue into property tax cuts for homeowners.


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What does it say about the relationship between PA state government and the people of the Commonwealth that they need to fund services by licensing and taxing gambling? Seems to me there was a time when people wanted certain services from state and local governments, so they elected people who figured out how much all that would cost and set tax rates accordingly. The money came in, the books were balanced, and the next year they did it again. Now we have a situation where state and local government cannot persuade people to pay taxes for all the services government wants to provide. Either cut the services or raise taxes--but don't make up the difference between what people are willing to pay for and what government wants to do, by licensing a money-wasting, family-destroying, parasitic venture like this.

Judge broadens class-action suit against law firm
Article Courtesy of the Sun Sentinel
By Joe Kollin
Posted Saturday, July 24, 2004
Some 1,176 owners of condos and homes in South Florida will be eligible to join a lawsuit seeking damages from a law firm that threatened them with foreclosure for not paying assessments to their associations.

California Pays Dearly for All That Borrowing
California has paid $230.7 million in fees to Wall Street investment firms over the last year — a largely hidden cost to taxpayers of the huge borrowings needed to keep state government afloat.

An examination of how officials managed the heaviest borrowing in state history shows that the fees and commissions California has paid were in some cases higher than those charged to other state governments.

On one massive loan, officials agreed to fees that were 42% higher per bond than Illinois had paid last year for a similarly large borrowing.

On another, California paid fees at a rate about 25% higher than Washington had paid in the mid-1980s while that state was being penalized for the costliest municipal bond default in U.S. history.

In all, California took on $27.4 billion in debt to cover past and present budget shortfalls. While about half of that amount has been repaid, the ultimate price for the financing could include as much as $8.9 billion in interest. And the state budget now awaiting action in Sacramento contemplates nearly $1 billion more borrowing later this year.


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In case you were feeling guilty about your credit card statement, this should put it in perspective. $27.4 billion borrowed. $8.9 billion in interest...a mere 32.48% of the principal. What a bargain. Think about that the next time you see one of these grinning California legislators on the tube. Tar and feathers, anyone?

Bookkeeper pleads guilty to $230,000 theft

Susan Spencer-Wendel
Friday, July 23, 2004



WEST PALM BEACH -- The bookkeeper was such a nice young man -- clean-cut, polite, all yes-sir-yes-ma'am, so likable -- the retirees invited him to Easter dinner.

Meanwhile, Todd Demartine, 32, was raiding their homeowner association accounts, withdrawing thousands of dollars, buying things such as a WaveRunner and a Tiffany diamond ring.

Thursday, Demartine pleaded guilty to stealing more than $230,000 from his employer, Hawk-Eye Management, and accounts it handled. He worked almost two years for the Boca Raton company, which employs 15 and handles finances for condo homeowner associations in southern Palm Beach County.
...............

Think of the possibilities. Here are the HOAs, run by volunteers who may or may not have any accounting or business background. Here's their money. Here sits the enterprising and perhaps dishonest bookkeeper or property manager. Who will notice if he or she takes a little off the top? There have been many reports of this sort of thing.

Las Vegas SUN: Redevelopment area could be expanded
Monica Caruso passed this along from Las Vegas. I wrote a paper that mentioned among other things the City of Las Vegas' use of a downtown redevelopment district to compete with the County for tax dollars. The new mega-casinos are on the Strip, which is outside the city limits in county jurisdiction, so that's where the tax dollars go. The redevelopment district is an effort to recapture some of that by using various mechanisms to attract money and rebuild the downtown casinos. Anyway, here's an article about what's underway--expanding the district.
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The Las Vegas City Council on Wednesday will consider a resolution to expand the Downtown Redevelopment District to include three large parcels near downtown.

The move would allow projects improving those areas to tap into redevelopment incentives through 2031 and, if necessary, seek the use of eminent domain to take property from the current owners at fair market value.

Here's something scary....
 
Deadly Fairfax Fire Shows Growing Peril
By Eric M. WeissWashington Post Staff WriterMonday, July 19, 2004; Page B01

A tiny flame from a candle touched papers that melted vinyl siding and set off a fire that raced unnoticed up three floors. The blaze torched 18 condominiums, left three people dead and forced a man on fire to leap from a third-floor balcony.
Beyond the devastating personal tragedy, the fire in Fairfax County last weekend also highlighted a little-known danger in the Washington region and across the county, fire safety officials say: Houses are built too close together. Radiant heat from the fire in the Kingstowne section of the county nearly set ablaze another building 34 feet away.
"It was about ready to go over there, very close," said Fairfax fire and rescue's Peter J. Michel, lead investigator in the fatal blaze. "I'm surprised we only lost the three the other day."
Michel and other fire officials fear that entire blocks of houses could erupt in flames in a serious fire. National building codes allow single-family houses to be built just six feet apart. Increasing development pressure and the scarcity of land in metropolitan areas are resulting in more -- and larger -- houses built to minimum spacing standards.
Building suburban-style houses at an urban density could cause conflagrations that could devastate whole neighborhoods, fire officials warn.
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I don't have a link to the whole story, but with the trend toward massive density (small lots) and the insistence on building as much house as possible in those little lots, the prospect for major fires is fairly obvious... 

Homebuilder goes deep into density - 2004-07-19 - Sacramento Business Journal
More evidence (see below) that builders go with condos and other CID housing because it allows higher density. And more evidence that the whole California housing market is so nuts that soon people will be paying a million bucks to live in a cardboard box.

John Laing Homes plans to increase its production by 52 percent next year by building most of its housing in projects that pack eight to 14 homes per acre.

Laing is Sacramento's No. 16 homebuilder, according to The Gregory Group, a company that studies the new-home market. The builder's move to erect 80 percent of its homes in such close-packed projects would make it among the first to commit so heavily to higher-density development, although Beazer Homes and KB Homes are also buying into the game.

The idea behind the move is to focus on those who want home ownership but can't afford today's price tags for a house on a big lot.

Laing's strategy is more evidence the market is changing in Sacramento. The region's days of ample and cheap land for building affordable homes with big yards are gone. Faced with a dwindling supply of land suitable for development, sold at skyrocketing prices, more builders will likely use Laing's approach.

Officials at Laing estimate they can slice as much as $50,000 from the price of a typical home by building in high-density projects that use less land. With revised home plans, most homes in the denser communities would sell for roughly $150,000 less than the average new-home price, pegged by The Gregory Group at $439,135 in Sacramento, Yolo, Placer, El Dorado, Yuba and Sutter counties.

Laing aims to increase its sales to 550 units next year from this year's estimated 360, said Kevin Carson, president of the company's Sacramento division.

The cost of elbow room: Traditionally, new homes in this region have been built at a density of five to six houses per acre. The average density in the four-county area is 5.7 lots per acre, about what it was in 2000, according to The Gregory Group.

But the price of land has doubled since 2000, noted Tom DeLucca, Laing's vice president of land development. That makes the old densities more expensive for builder and buyer alike.

Builders set to build record number of condos North County Times - North San Diego and Southwest Riverside County News
Fred Pilot sent this along. It is from north San Diego County, known locally as "north county." I lived there for quite a while, including a few years in Leucadia (now part of the city of Encinitas) and then my wife and I lived for three years in Cardiff-by-the-Sea, also now part of Encinitas. Anyway, it's one of the fastest growing parts of California, and that is saying something. Check out the condo construction in north county. It is a vast expanse of land, and there is room for lots and lots of new construction. The questions are, how on earth are these people going to be able to drive to work, given the traffic congestion that is looming? And where will their kids go to school? Little details like that...
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With prices for new houses rocketing far out of reach for most first-time buyers in North County, local builders have abruptly shifted into the condominium market, setting off a construction boom that's poised to dwarf the condo craze of the mid-1980s.

After several years of focusing on high-end, detached houses, builders are finding strong demand and record sales for attached homes, which can be packed onto lots at 30 homes per acre.

The average price of a new condo reached $473,000 countywide in the second quarter, up 21 percent from the previous three months, according to a report Monday by MarketPointe Realty Advisors, a research firm based in San Diego. Along the Highway 78 corridor from Oceanside to Fallbrook, new condos sold for an average $395,000, up 18 percent from the first quarter.


What's more, sales are likely to set a record this year, with 4,904 attached homes sold in the first half. As recently as 2002, builders were selling fewer than 300 condos in a three-month period. The industry is considered certain to build 9,000 or more this year, easily surpassing peak production of 6,164 units set in 1985.

"We're really seeing an explosion in the attached housing market," said Russ Valone, president of MarketPointe. The firm calculates a weighted average of new-home prices to reduce the statistical effects of a few very expensive or low-priced homes sold each quarter.

Valone also had sobering news for buyers of new houses. The countywide average price for single-family, detached homes was a record $713,000 in the quarter ended June 30, up nearly 10 percent in a single quarter. The average size was 2,739 square feet.

In the north coastal region, which extends in the MarketPointe report from La Jolla through Carlsbad, the weighted average price for a new house was $975,000, up just 1 percent. In the Highway 78 corridor, the average was $662,000, up 13 percent from the first quarter.

Although prices shot higher, sales of new houses declined amid extremely tight supplies to 1,643 homes in the second quarter, or 37 percent of total home sales in the county.

Some builders say the prospect of rising mortgage rates prompted them a year or two ago to find ways to build more houses at lower costs to hedge against the possibility of crumbling demand for the high-end homes that have dominated the industry in recent years.

"I think that people are going to be buying less expensive housing and not more expensive housing if interest rates go up," said Greg Gallagher, vice president of land acquisition for Greystone Homes, the Carlsbad-based unit of industry giant Lennar Corp.



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There's more--read the whole thing.