Saturday, July 03, 2010

State and local gov't workers' job security fades

State and local gov't workers' job security fades

States and
municipalities are facing gaping budget gaps. Many have responded by slashing services, raising taxes and, for the first time in decades, making deep job cuts.

And public employees should brace themselves: Some economists say the job cuts could worsen in the second half of the year.

Counting companies that work with state governments, a total of 900,000 jobs could be lost to states' budget shortfalls, according to the Center on Budget and Policy Priorities, a think tank in Washington.
Certainly private local government -- mandatory membership property owner associations -- has been adversely affected by the economic downturn as chronicled in the many posts to this blog over the past couple of years. As Evan McKenzie pointed out On the Commons last weekend, precisely because it's private government, there's little publicly available data on associations that makes it difficult to quantify how the recession has affected them.

There's evidence that the economic downturn isn't affecting public and private local government evenly. Texas attorney David Kahne notes in an item I posted earlier this week that economic pain in Privatopia has translated into economic gain for association management and law firms foreclosing on association properties in arrears on HOA assessments. My guess is county tax collectors conducting tax sales to recover delinquent property taxes aren't making much if any money on these sales.

Friday, July 02, 2010

Local HOA's creative way to make money

Kara Kostanich
BOYNTON BEACH---A Boynton Beach Homeowners Association will soon be making money from a neighborhood foreclosed home.

President of Los Mangos Properties Owners Association Kathleen Dougherty said, "it will go back to the people and it will go back to the people and it will be spread throughout the community to pay our bills."

What a concept! By the sounds of things HOAs can either fine people to balance their budgets or rent out foreclosed property and collect the rent.

Is it time to ask whether or not this idea of forced communal living is viable and worth preserving?

Thursday, July 01, 2010

Genetic Secrets of Living to 100

A massive genetic study of people who lived for more than 100 years has found dozens of new clues to the biology of aging.

--“It shows that genetics plays an extremely important role at these extreme ages. And it begins to be a not-unsolvable puzzle,” said Boston University gerontologist Thomas Perls. “If we start looking at these genes and what they do, we better understand the biology of extreme longevity.”

--People who’ve reached that mark tend to have lives that are not only exceptionally long, but unusually healthly. Unlike most people, they rarely develop diseases of aging — such as heart disease, metabolic disease, cancer and dementia — until well into their 90s. They’re also more likely to bounce back from disease, rather than entering a spiral of declining health.
That manner of aging is a goal for most people, and a public health necessity. Modern medicine has had success in slowing individual aging diseases, but when one is postponed another soon emerges. Americans are living longer but not healthier.


I wonder if the scientists will look into the effects of HOA living on longevity?

The big question, in my mind though is whether it is worth living to a ripe old age if it meant being stuck in an HOA ?

Public local government beats private local government -- but sometimes it's like an HOA

Grand Jury Blasts City Council

“Major changes” are needed to a South Lake Tahoe City Council that is constantly bickering, routinely drops controversial issues, and operates at a “barely functional level,” according to the 2009-2010 El Dorado County grand jury report.

— “Constant hostility and bickering among members of the City Council and their unprofessional conduct has resulted in a consistent 3/2 split vote creating two 'camps' of Council members. The voting often appears to be the result of Council members pursuing personal agendas rather than operating in the best interests of the City. The bickering and nitpicking between Council members during meetings, combined with hostile comments to media outlets and behind the scenes ‘back biting' has resulted in the failure to address routine and important business entrusted to the Council by the citizens of the City of South Lake Tahoe.

Private government such as employed by mandatory membership homeowner associations is a non sequitur. Americans see local government as a public function and expect it to be transparent and accountable. Privatizing government through nonprofit corporation law creates an inherent contradiction and uses the law in a setting in which it was never intended to operate.

Unlike private HOA government, public forms of local government have a well established governance culture and are generally served by experienced, well trained professional staff. By contrast, HOAs are governed by property owners who are typically reluctant volunteers who muddle along from year to year. Turnover is high among board members and contracted, part time professional advisors who may or may not place the HOA's best interests first. This governance gap, I believe, accounts for much of the dsyfunction and abuse of power in HOA governance at the same time HOAs have become deeply ingrained in the structure of local government as the owner of this blog has noted.

That said, public local government isn't perfect. Sometimes their elected bodies resemble amateurish HOA boards as this story out of South Lake Tahoe, Calif. illustrates. However, no grand juries investigate HOAs and issue recommendations on how they can improve such as is the case here.

Missing Links

Sorry folks, I thought I had provided a hyperlink in the titles to the articles I posted. Here they are:

William Gammon: Prosecutor's Not Happy The Accused Child Porn User's Out On Bond

Group Hit In 'Hebrew Race' Discrimination Case

Bushnell on the Park Condominium Association placed in receivership

Group Hit In 'Hebrew Race' Discrimination Case

A civil rights trial against a homeowner's association accused of discriminating against Jewish members has ended in a settlement that is believed to be the largest in Plymouth County history.

The jury awarded the Prescotts $600,000 for the violations of their civil rights and an additional $150,000 for nuisance. Together, with interest, the judgment is in excess of $1.2 million.
The jury awarded Scott J. Hyman $850,000 for the violations of his civil rights and an additional $100,000 for nuisance. Together, with interest, the judgment is in excess of $1.3 million.

In addition, within weeks of an association member's comments that "someone is going to burn him (Hyman) out," Hyman’s home in Middleboro, Mass., was torched and burned to the ground, according to Minchoff. There is an ongoing arson investigation.


I am guessing Zogby never polled the Prescotts or Scott Hymen to find out if things were going well in their neighborhood and if they were happy with the HOA.

Wednesday, June 30, 2010

William Gammon: Prosecutor's Not Happy The Accused Child Porn User's Out On Bond

William Gammon, the attorney who's pushed for aggressive homeowners' associations in court and in the legislature, is out on bond on charges of possessing a pornography stash described by an investigator as "one of the largest collections of extremely young children he had ever seen."

According to the [ICE] special agent, Gammon's collection consisted primarily of young males and females under the age of 12, with many being infants 2 to 3 years old. The images and videos showed the young males and females, some as young as 3 months, being vaginally and anally penetrated, bound, gagged, and bleeding from their orifices. One particular image showed a 6 month old female on her back, with her hands and feet bound, a red gag in her mouth, her genitalia spread, and a message written across her abdomen saying "lick me here," with an arrow pointing to her genitalia.


Oh, how absolutely horrible. It is sickening, really sickening. How can people do that to children?

Bushnell on the Park Condominium Association placed in receivership

"It is the first time, to my knowledge, that a receiver has been appointed for a condo association in Connecticut," Starble said. "It is an extraordinary measure, but it was made necessary by extraordinary circumstances. My clients applaud the court's decision to provide an equitable temporary remedy for home owners who have been the victims of egregious breaches of fiduciary duty. As a result of the actions of Bushnell Regency, the Association finds itself in financial distress and with a building in disrepair. To be clear, this situation is not a result of the economy; it is a result of one company's actions."


Protecting property values, I presume.

Tuesday, June 29, 2010

It sounds like the plot of a Cold War thriller: Russian spies living in the suburbs, using invisible ink, code names and "dead drops." The FBI says it's been going on for years.
I wonder if this alleged plot of suburban Soviet-style espionage involved penetrating the HOA power apparatus to get a real insider view of how local government is increasingly organized in the U.S.A.

David Kahne, a Houston lawyer who advises homeowners, says that in Texas, the law is so weighted in favor of HOAs, he advises people that instead of hiring him, they should call their association and beg for mercy.

"I suggest you call the association and cry," he says.

If a homeowner misses a couple of association dues payments, the s250 or s500 they owe often becomes s3,000 after the association's lawyers add their legal fees, Kahne says.

It's not the HOA that has to pay the lawyer's bill but the delinquent homeowner. If the homeowner wishes to contest and loses, the owner is on the hook for legal fees that could run deep into the tens of thousands of dollars.

Kahne says that as the economy has gone under, HOA management companies and lawyers have been making millions off homeowners through this foreclosure process.

"We're having literally thousands of lawsuits filed over very small amounts of money," Kahne says. "And those very small amounts of money rapidly become large amounts of money when the association attorneys add their bills."

These are the worst of times and the best of times in Privatopia, USA. Texas attorney David Kahne reports as the HOA foreclosure machine grinds up delinquent homeowners and auctions off their properties for a relative pittance, the community association industry is enjoying a bonanza of legal and other fees. And as with mortgage lenders, homeowners in arrears can only beg for forbearance since they don't have the law on their side in most states that allow nonjudicial foreclosure by HOAs, Kahne notes.

Kagan Declines To Say Gov't Has No Power to Tell Americans What To Eat

Monday, June 28, 2010

Welcome guest blogger Fred Pilot

I am pleased to welcome Fred Pilot as co-guest blogger (with Shu Bartholomew) during my more-or-less absence for vacation. Fred has been sending me articles practically daily for years, and he is one of the most knowledgeable and perceptive people you can find anywhere on these issues. I am honored to have Fred on board.

Thanks, Fred and Shu!

Welcoming guest blogger Shu Bartholomew

On July 1 I will be leaving on vacation with my three children and we will not be back until around July 21. We will be camping in Bryce Canyon National Park in Utah, visiting San Francisco, and doing other fun things. It will be hard for me to stay current on this weblog, so Shu Bartholomew has graciously agreed to serve as a guest blogger while I am away. I will contribute whenever I have the time and an internet connection, but it is hard to say how often that will be. 

Shu, as most of you know, is the creator and grand empresario of On the Commons, the weekly radio show that has featured just about everybody who knows anything about common interest housing.  Thanks, Shu!

Gated communities have ways of getting their fees |

Gated communities have ways of getting their fees |

A Pocono Country Place considered the Sterlins delinquent on all properties and deactivated gate passes held by all of their renters.

It meant that tenants had to go into the community office and register every time they wanted to get through the gate. As a result, many tenants moved out. In Monroe County Court, the Sterlins claimed a loss of $60,000 in rental income and complained that the community wrongfully interfered with their contractual relations with tenants.

Private communities can exert invasive pressure unmatched by municipal tax collectors.

Associations without gates often deny delinquent owners access to amenities such as a pool or other recreation services. Some communities change the key to an owner's mailbox.

At least 56,422 homes are within the borders of private community associations in Monroe and Pike counties. Homes in private associations, some gated, many ungated, account for 38 percent of all housing units in Monroe County and 64 percent in Pike County, according to county and U.S. Census data.


Thanks to Cynthia Stephens for this link.

Bill gives more rights to Illinois common interest communities -

Bill gives more rights to Illinois common interest communities -

Common interest communities, which usually are town house or single-family home associations, have been governed primarily by their declarations and Sections 18.5, 18.6 and 18.7 of the Condo Act. Some declarations are more comprehensive and owner-friendly than others.

The new legislation, also known as SB-3180, outlines procedures and requirements for association governance and operations. It passed both chambers of the General Assembly last month and awaits the signature of Gov. Pat Quinn. It becomes effective upon signing.

"The bill is condo-like," said association attorney Michael C. Kim of Chicago. "It's a slimmed-down version of the Condo Act, but it's not the same."


The idea is to give more protection to owners in HOAs. Section 18.5 of the condo act covers non-condo associations, but it is a bare-bones section. This is more specific and has more protection for unit owners in certain areas, such as access to records, meetings, and assessment increases.

With the clock ticking, Sacramento set to blow another budget deadline -

With the clock ticking, Sacramento set to blow another budget deadline -

SACRAMENTO — Most of us get in trouble when we're late. If you don't bring back a library book on time, they fine you. Miss a court date, and count on a warrant with your name on it.
But not California's political leaders — at least not when it comes to passing a budget. Wednesday marks the last day of the fiscal year — the day the state constitution says a budget must be in place. Yet, for the 17th time in the past 20 years, lawmakers and the governor will find themselves bickering well into the summer — and busting their deadline.
This is happening all over the nation now. State and local governments just ignore the laws that limit their power. Does that mean they are becoming more like HOAs and condo associations, or is it the other way around?

Liveblogging the final four USSC decisions now on SCOTUSBLOG

Here is the link to SCOTUSBLOG, where an able team of USSC litigators will be live blogging the announcement of the last four USSC decisions of the term in 15 minutes or so--including McDonald v. City of Chicago, that will determine whether the Second Amendment right to keep and bear arms applies to the states.

Sunday, June 27, 2010

Public finances: Can pay, won't pay | The Economist

Public finances: Can pay, won't pay | The EconomistThis article from The Economist compares and contrasts deadbeat American states, such as Illinois, with deadbeat nations like Greece. Thanks to Doug Selby for the link (and for the picture of the rattlsnake he dispatched today on his ranch). / US / Economy & Fed - US state budget crises threaten social fabric / US / Economy & Fed - US state budget crises threaten social fabric
This is from the Financial Times, a publication not given to panic or exaggeration.

RealClearMarkets - Is Illinois the New California?

RealClearMarkets - Is Illinois the New California?
As of Monday, the credit default swap spread for Illinois general obligation bonds climbed to 313 basis points for a five-year contract -- meaning a bondholder must pay over 3% of the bond's face value per year to be insured against default.

That's a higher price than for all but seven sovereign entities tracked by CMA, and slightly higher than California, whose five-year CDS spread sits at 293. Investors rate Illinois's debt as slightly riskier than Iceland's or Latvia's, but not quite as big a gamble as Iraq's.

This is an essay by Josh Barrow that was cited in a Chicago Tribune editorial (one of many) pointing out that the State of Illinois is in a terrifying downward financial spiral that places it, in terms of the risk of defaulting on its public debt, worse than Portugal and California, and just below Dubai and Iraq. The data on government probability of default can be found here. What I find disturbing--above and beyond the desperate situation this state is in--is the la-de-da attitude that prevails everywhere in elite circles except the editorial board of the Trib. The public can't be bothered, of course. When I bring this up in conversation with anybody I feel like one of those scientists in the movies who keep ranting about how Planet X is going to crash into the earth, and people just say, "Yeah, sure, but how about the Cubs?"

And of course, California is on it's own path to perdition, but as the Barrow article notes, California's public pension plans are not as badly underfunded as those in Illinois. Here's a taste from the Barrow article about how bad this is: Illinois's pension funding irresponsibility may come home to roost soon. Joshua Rauh, a professor at Northwestern University, estimates that the state's pension funds will run out of money in 2018 at the current funding pace. "He estimates the plans' total funding gap at $219 billion -- a liability that dwarfs the $117 billion in bonds outstanding from the state and localities within it."


Tiny prefab units promote eco-friendly building

Tiny prefab units promote eco-friendly buildingZeta Communities will construct the housing for the 22-unit developments, planned for parking lots in Berkeley and San Francisco. The projects will feature tiny living spaces - 310- to 340 square-foot studios - and no parking. Instead, they will include a car-sharing space.

The proposed four-story projects are the first foray into prefabricated housing for East Bay developer Patrick Kennedy of Panoramic Interests.

Read more:

How lovely. A 310 square foot condo with no parking. And all for only $200-$275K.

On The Commons

On The CommonsOn The Commons turns 10 years old this month. Our special guest is Evan McKenzie as we celebrate 10 years and kick off a brand new season of On The Commons.
Give it a listen and post a comment telling us all what you think...

Breezy summer reading about associations just a click away -

Breezy summer reading about associations just a click away - The Privatopia Papers runs headlines and links to news stories about dreary financial reports, dubious legislation and homeowner associations behaving badly. Attorney Evan McKenzie, a political science professor at the University of Illinois at Chicago, offers snarky commentary along with explanations of the finer points of law and governance.
Get the Chicago Tribune delivered to your home for only $1 a week >>

In one post, a Baltimore association proposed DNA-testing of its resident dogs to determine which owners aren't cleaning up after their pooches. McKenzie assured his readers the story was not something invented by The Onion, a satirical news source.

"It is no longer possible to parody the antics of homeowner association boards because no matter how absurd the concept you come up with, they have all ready exceeded it," he wrote.

Thanks to Pam McKuen for including this blog among the cool summer readings on HOAs. She gets my vote for most knowledgeable journalist on this subject (and not because of this article!) Hey--am I snarky? I thought I was just realistic...