- This video is sponsored by Brilliant.
It's no secret
that many people find homeowners' associations
and the boards that govern them in private communities
annoying.
There are so many HOA horror stories that cataloging them
is its own cottage industry.
The esteemed publication, Buzzfeed,
sets the scene well, stating,
"In some neighborhoods, homeowners' associations
are pretty chill and get things done for their residents,
but unfortunately,
other HOAs sometimes spiral out of control
with members flexing their power to fine,
harass, and even sue homeowners over tiny infractions."
They then go on to copy and paste
stories from a Reddit thread like,
"One of my coworkers got a warning from his HOA
saying that he had too many boxes inside his garage.
They claim that he couldn't use his garage for storage."
And, "I got a $375 fine for a flower pot."
These complaints may become more common
because despite the issues, more and more Americans
are moving into communities governed by HOAs.
80% of houses built in new subdivisions are bound by an HOA.
Homeowners' associations
are a form of private local government
and they outnumber actual local governments
by a three to one margin in the United States.
45% of Floridians live in a HOA community.
Why are they so popular despite the gripes?
And is the privatization of neighborhoods
something we should worry about for cities?
Let's talk about that after the bike bell.
(bike bell rings)
What gives homeowners' associations the unique power
to annoy so many residents who live in them?
Well, they're basically a form of local government.
Technically, they're nonprofits,
but they basically have the same powers
as a local government would.
Residents automatically become members of the HOA
when they move into the neighborhood.
They can't opt out of the HOA and not use the pool.
They pay another tax in the form of HOA dues.
Nationwide, the average HOA dues are about $260 per month
and the HOA can raise dues if they deem necessary.
Residents are also subject to hyperlocal regulation
in the form of codes, covenants, and restrictions
that form the basis of the HOA's power.
You may have heard of CC&Rs in other planning contexts.
First, covenants have been used to prevent owners
from selling their homes to black buyers.
Those racially restrictive covenants
were deemed unconstitutional in 1948,
but they were still inserted until 1968
when Congress made it illegal
as a part of the Fair Housing Act.
Also, CC&Rs are deed restrictions
which is the same way Houston,
the city famous for no zoning codes, regulates land use.
But in HOAs, those restrictions can be extremely specific.
More specific than you would ever find
in a municipal zoning code.
Deed restrictions can tell owners what colors they can
and can't paint their house.
They can also specify that homes can only be sold
to people 55 years and older,
like America's largest HOA community,
The Villages in Florida.
Fun fact,
The Villages is larger than the island of Manhattan.
With the ability to tax and regulate its members,
HOAs have some pretty significant power over residents,
but residents also have power over HOAs
by voting for HOA board members.
But it doesn't start out that way actually.
When the real estate developer is building the neighborhood,
representatives from the company
make up the board of the HOA.
As more people move into the housing,
more seats on the board are open to residents
until they finally take over the management
of the organization.
Boards may also create subcommittees
to help manage the operation of the HOA.
One of the most common and potentially annoying
is an architectural standards committee
that ensures that every homeowner is abiding by the CC&Rs
regulating the design standards for houses and yards.
That's where that fine for the flower pot comes from.
And yes, not only can HOAs collect dues,
but they can also find members for violations.
After hearing how HOAs work,
you might wonder who would ever choose to live in one.
Sounds like another layer of taxes, politics,
and big brother esque control.
But the whole point of an HOA is to take those dues
and turn them into amenities and services
for the exclusive use of their residents.
Here's a look at the most common amenities provided by HOAs
according to a recent survey.
Most amenities are on land owned
in common by members of the HOA.
So it's not surprising
that landscaping is at the top of the list.
Often, streets within an HOA neighborhood are private
so sidewalk maintenance makes sense too.
And no surprise that classics like swimming pools,
playgrounds, fitness centers, and security are on the list.
All of these amenities can help increase
and preserve property values.
Buyers know that the swimming pool
will be adequately maintained every year
and will never be as crowded as the public swimming pool.
The Architectural Standards Committee
also preserves property values, at least in theory.
Home buyers know that they will never live
next to a neighbor with an overgrown lawn
or a rust bucket permanently parked in the driveway.
Many people think that's worth $260 per month.
69% of surveyed HOA residents
found their dues to be reasonable given the benefits,
but the evidence showing
that people actually like their HOAs is mixed.
As buzzfeed and other articles have shown,
people can find HOAs quite annoying.
It may not be for everyone who,
say doesn't wanna keep their yard perfect all the time
or has more creative ideas for exterior paint color.
47% of surveyed HOA residents
believe that their neighborhood
would be better without an HOA
and only 43% of homeowners in an HOA community
like being there.
A survey is one way of understanding
how people feel about HOAs,
but checking the sale price of homes is another.
Do homes in private communities
sell for more than equivalent homes in public neighborhoods?
That's exactly what one study tried to figure out
using mortgage record data of single family homes
across the United States.
They compared similar homes with and without an HOA.
What did they find?
Well, it turns out people are willing to pay
a 4% premium on average
for the privilege to live in a community with an HOA.
That works out to an extra $13,500
on the sale price of a home.
Remember, a buyer will also have to pay HOA fees
on top of that premium.
So it's pretty clear that many people find HOAs
to be valuable.
The bottom line is that real estate developers
often include amenities such as pools, clubhouses, and paths
to entice buyers to buy homes in their subdivisions.
Those amenities need to be managed by the neighborhood
and thus an HOA and HOA board are formed.
As Buzzfeed said, some homeowners' associations are chill
and get things done for their residents
and HOA drama is not a universal experience.
In most places, people pay their dues, enjoy the pool,
and maintain their house and yard.
But just because they're convenient to people like them,
doesn't necessarily mean they're good for cities.
I mean, I can think of at least one example
of something else that meets those criteria.
Proponents of HOAs will argue
that they're a form of contractual or private government
that can provide for the needs of residents
better than traditional municipal government.
If you believe local control is a good thing,
then HOAs are a step in the right direction.
But there are some very real downsides
to the proliferation of HOAs.
First of all, as quasi governments,
they actually have more power to regulate speech
than actual local governments do.
HOAs are based in contract law
while municipalities get their source of power
from the police power of the 10th Amendment.
HOAs also violate the one person one vote rule
that government elections have.
Renters do not get to vote in HOA elections, only owners do.
And some HOAs allow people with multiple properties
to get multiple votes.
Although most have restrictions
on the amount of votes one person can accrue.
Even worse, HOA communities can be seen as a way
for the wealthy to succeed from their cities
into enclaves with rules and amenities
that match their status and wealth.
They have what they want and desire
and maybe less likely to support bond measures
to pay for public amenities like roads,
schools, libraries, and parks.
Private communities can also create a fractured urban form.
Some private communities are also gated communities,
which mean that the public isn't welcome.
Even in non-gated HOA communities,
roads are often private property
and non-residents can be considered trespassing.
When large parts of a city become private,
it means that it's very difficult
to create direct connections between neighborhoods
or through a city.
This is particularly important
for people on bikes or on foot.
If you have to go all the way around a neighborhood
instead of traveling through it,
it can add to your travel time significantly.
Despite these negatives,
it's clear that HOAs are here to stay for the long term.
The proportion of new communities
with HOAs continues to grow.
This isn't great news from an urban perspective,
but at least Buzzfeed gets a never ending source
of new content.
If you're stuck in an HOA community you don't like,
that can be a difficult challenge to solve.
If you're stuck in an HOA community you don't like,
that can be a difficult challenge to solve.
There are websites out there that can give you advice
about joining an HOA board
and changing things from the inside
or simply annoying the existing board,
but you'll need to be a creative problem solver to do so.
If you need some practice as a problem solver,
you'll probably want some great problems to practice on.
One great place to get those problems,
as well as expand your knowledge of STEM topics
is Brilliant.
In their impressive library
of more than 60 interactive courses,
you'll find the challenges you need
to become a better creative problem solver.
You'll also be learning things
like probability and statistics,
logic and scientific reasoning,
all of which can help you overthrow your HOA.
You can also learn calculus,
chemistry, and computer science,
which could lead you to a career
that pays more than you're earning now,
allowing you to move out of that neighborhood entirely.
The best thing about Brilliant though
is that every single one of their courses
is built upon the principle of active learning.
You're not gonna be passively watching a video
or reading text, but instead, writing code,
solving problems, and taking quizzes.
It's super interactive.
This is a proven technique that helps you stay engaged,
learn more, and complete your objectives.
Brilliant also has daily challenges
that present you with an opportunity
to flex your new creative problem solving skills
and make problem solving a daily habit.
They're just a lot of fun too
and probably my favorite part about Brilliant.
If you wanna maximize your creative problem solving skills
and support this channel,
head over to brilliant.org/citybeautiful
and start learning today.
I'll post the link on screen too.
Thank you so much for supporting this channel.