As to developers subsidizing HOA fees during development and early(ier) sales:
Typically, the developer will subsidize or deficit-fund the association until there are homeowners paying sufficient assessments to cover the expenses. The association, whether funded by developer subsidy or owner assessments, pays contractors and other expenses. The board collectively decides on all such transactions.
Some of this is going to depend on what you are used to. I live in a city which has a police department, fire department , its own school district, currently provides water and maintains the sewer ,funds the library systems , and operates parks and recreation facilities. But all I have to do is cross the border and leave the city to find things done differently - there are only five cities in my state where education is the responsibility of the city government. The other 700 school districts are run by school boards which are independent of any city/county/town/village government. There are volunteer fire departments , and some municipalities do not have their own police department but rely on the county police/sheriff’s department. So it wouldn’t surprise me at all to hear that government-funded police don’t patrol areas covered by an HOA - in fact, I know of one in NYC that has its own “police department” although I’m not sure they are actually, legally police.
The Sea Gate Police Department was founded in 1899. It is a law enforcement agency made up patrol officers, supervisors and a detective unit that investigate crimes that occur within Sea Gate’s jurisdiction. The officers are made up of retired police officers and New York State peace officers. The unit answers to the Sea Gate Association, and are funded by part of the annual dues that Seagate residents pay. The due is 13 percent of the value of the resident’s property.
My point was that in DuPage and Cook, where there is little open land to develop, this takes the form of squeeze developments. Two parcels combined to build 6 units. Or 5 combined to build 15. It’s not an insubstantial number of new homes. And it’s not all village services – just roads and landscaping not refuse and water.
For anyone interest, this is a study of the price premium for homes with HOAs. They estimate it at 4% with substantial regional variation.
The introduction lays out the statistics for HOAs (80% of new subdivisions) as well as the cost premiums and municipal delegation. The appendix includes maps of HOA frequency and average dues.
Yeah - I guess it makes sense that, if a developer is building homes in the boonies, where government services are minimal/nonexistent, the government might wish the developers/homebuyers bear the cost of providing increased services, rather than just dumping those costs on the existing governmental unit.
I guess I can imagine some instance in which a government felt it was worth providing a developer some tax break, perhaps if they really wanted to attract new residents. But it is not something I have heard of before and it does not seem to me as though it would be the norm.
Maybe. But out here in DuPage, it seems there have been plenty of big developments where cornfields are turned into subdivisions. I haven’t conducted any study, but I have driven up/down Rte 59 in Naperville… 
And in my suburb, there are many MANY new teardown builds of single family homes, but not subdivisions/HOAs that I’m aware of. There was one subdivision of 50 homes a decade ago when the old hospital was torn down. I just checked a listing for one home currently listed in that development, and it shows $0 HOA fees.
There are some townhome/condo developments - if we are including those. But I assumed everyone realized that every such townhome/condo development had an association.
When I see this, it’s usually set up as a condo (because each unit is not its own building) which of course has an association but it wouldn’t involve roads because the two parcels would be about 40-60 feet wide. With the ones you are talking about , would the six units have its own association or would there be an association that combined those six units with other buildings in the area? Because I suspect a 3 -15 unit association has different problems than a larger one.
I haven’t looked at the document.
An accurate evaluation of this basic question – do HOAs actually increase property values – is incomplete (or deceptive) unless it considers the HOA dues.
Using a rough average of $6.65 in mortgage payment per $1,000 of mortgage:
Given a $400,000 home, that 4% cited in the study would equate to $16,000 more value in the HOA home than in the non-HOA home.
And the HOA fees don’t tend to go down over time.
From experience from listening to complaints around here and elsewhere:
Get the damn thing in writing. Do it now, while everybody is still getting along fine.
It’ll work just fine without being in writing – until it doesn’t. Eventually somebody will move or die or get dementia, and somebody else will move in who either wants to freeride and won’t hold up their end of the bargain (and may also rut the road up with improper traffic), or who wants to massively “improve” the road and wants the rest of you to pay for it.
While you’re at it, specify (if any of you cares) what sorts of business people can run from home, including whether they can run short-term rentals and if so whether continuously or only occasionally and if the latter with details.
It may also have been in order to make them eligible for the city to take them over. In NY, at any rate, state law says that the municipality can only take over streets if they meet the minimum right-of-way width. (This is remarkably hard to explain to some of the lake people who own places on private roads that don’t.)
Fire access is however another good reason, and is also going to be affected by steepness, turning radius, etc.
Makes sense to me.
I doubt they should specify whether or not the HOA allows people to park on their lawns, though. But that there has to be some genuinely reasonable process for amending the bylaws, and for countering decisions that blatantly go against them and/or are being enforced on some members and not others – yes, I think that should be state law.
Heh. I agree with your sentiment and I questioned my gf about it 20 years ago when I moved in and became involved in the agreement. My gf would never consent to broaching the topic. It’s been in effect for 35(?) years with nary a blip. The three couples are a best friend group, we socialize, share eggs (our hens) and garden harvests(the eldest couple).
Funny you mentioned dementia, as our one neighbors is dealing with this. I found her one chilly day walking in the woods behind her home. She didn’t recognize me but stayed calm and talked to my dog. Her husband now has secure locks on all doors.
And I love how in the 2008 photo there is one single mower sitting there and by 2013 there are a couple dozen. That little guy must have had a busy few years.
But don’t the new homeowners also pay property/GE/whatever happens to be locally relevant taxes? You make it sound like the “increased services” required by new homes come with no increased revenue to the governmental unit.
Sure. But I was thinking of 2 sorts of things.
One, the initial costs of roads/water/sewers for the new subdivision. Perhaps in the long run the new residents will prove a benefit to the community, but I can at least understand the sentiment of the existing community feeling a developer - who is motivated by profit - ought to bear some portion of such costs rather than simply having the existing community subsidize their profit.
Second, if a big subdivision of new homes is likely to impact the school system - maybe requiring a new school or additions to existing schools, or perhaps significantly impact police or fire services - again, I can imagine essentially a one-time “special assessment” to fund such expansion. Certainly, once the subdivision is built and populated, the costs of such services ought to be funded equally across the entire community.
But if there was no HOA what money would you be paying to do the things the HOA does? HOAs are not usually in the business of making money. They charge what is needed to pay for the services they cover and a little extra for a rainy day fund in case something really big and expensive comes along.
If the HOA is not paying for that then someone is.
That isn’t necessarily true.
In non-HOA communities, the common facilities are generally public and the maintenance OF the common facilities is generally done by the municipality, paid for collectively through property taxes.
Which goes back to the ‘double dip’ for HOA homeowners who are:
If an HOA community is responsible for maintaining all of its own infrastructure, then the city is collecting the same property tax from HOA homeowners as from everybody else while providing dramatically fewer services – taxation without representation, so to speak.
In a hypothetical town with zero HOAs, everybody contributes pro-rata to the tax base that provides everybody with services.
In towns with significant numbers of HOA, we all pay for each other, but the HOA residents also pay for themselves.
This is the heart of the ‘double taxation’ issue.
Is it?
I’d be willing to bet if a town with mostly HOAs magically ended their HOAs and made the city pay for the same services that the property taxes would be raised substantially.
But then the property taxes would be amortized across all residents instead of us paying for us and me paying for me.
ETA:
If our hypothetical city can get a milage increase. Which would be voted on.
HOAs just collect the money. A municipal government would have to ask for it.
I think the tax issue about roads and stuff is not really why people get upset about HOAs. They get upset because the HOA board sends them a violation about stuff like their landscaping isn’t proper, they have trash cans out, their cars have to be the garage, etc. One thing to remember is that the HOA is not a independent government agency. It is made up of volunteers from the neighborhood. If the residents don’t like how the HOA is being run, they can vote other people for the HOA board. If the president is a power-hungry nitpicker, then all that’s needed is someone else to be elected as board president and the nitpicker goes back to just being a normal resident.
I’m not persuaded. My assumption is that folk choose to buy into an HOA because they want their common areas maintained to a level higher than elsewhere through the municipality.
If a subdivision w/ an HOA has a clubhouse, pool, is that open to the rest of the community? But the HOA owners CAN use the park facilities outside of their HOA, no? In my friends’ HOA, the HOA mowed the front lawns and plowed sidewalks - services not provided outside of the HOA. Also, I suspect many HOA members appreciate having stricter standards applied within their neighborhood than elsewhere in the community. And I suspect they place some monetary value in having such stricter standards.
Don’t want to feel “doubly taxed”, don’t voluntarily choose to buy into an HOA. Simple solution.
HOAs are run by the homeowners that are members. I’d say they are more responsive to the will of homeowners than the local government is.
Not exactly an objective source. Certainly presents one possible opinion.