Really interesting and thoughtful discussion. A few general comments about HOAs from the cheap seats:
Homogeneity of houses (significantly limited diversity in appearance) exacerbates the need for painful ‘sameness.’ It’s a vicious cycle that makes a ‘long lawn’ or an unapproved paint color or an open garage door or curtains (vs. blinds) or a b’ball hoop over your garage FAR more conspicuous than in neighborhoods with more architectural diversity. That definitely benefits the original builder (everything is picture perfect while they’re trying to lure buyers), but how many homeowners actually seek out neighborhoods with such uniformity and sterility ?
Standardization definitely creates cost savings to the builder, but is there any evidence that those cost savings are passed along to buyers ?
There really isn’t any compelling evidence that HOAs increase property values.
HOAs tend to create a perverse incentive where the HOA side (property managers, attorneys, investors who wait to buy a dirt-cheap house in foreclosure that the HOA has put a Lien against) tends to benefit from the misery of the homeowner. The goals of the two sides aren’t aligned.
HOAs can easily create cliques and pit neighbor against neighbor, often devolving into a “Lord of the Flies” situation. The horror stories are seemingly endless.
Look into the Business Judgment Rule. Homeowners rarely beat the HOA in court. I think the majority of states still have a Business Judgment Rule that applies to HOAs. This should be done away with immediately.
Your neighbors all have to pay to defend the HOA against your lawsuit. This rarely makes the plaintiff popular, no matter how valid your case or how wronged you have been.
Arbitrary and selective rule enforcement is at least as big a problem as ridiculous rules, clearly spelled out and uniformly enforced.
The Board may change, your neighbors may change, the rules may change. Very little you can do about any of that.
Double dipping. Has any City EVER lowered your property taxes because you’re now paying your HOA for services that Cities have long traditionally provided ? This is a windfall for cities.
With governments, there /can/ be public awareness of their actions, allowing criticism or consequences for wrongdoing. HOAs really do function as ‘shadow governments’ and have very limited accountability. Some HOA governed neighborhoods are really small (very few houses), creating a ridiculously limited pool from which Board Members can be appointed. Hard to turn over the Board in these situations when there isn’t anybody else willing to serve.
Investors having multiple properties within a HOA neighborhood can wind up with a disproportionate voting interest. Yet another case where interests can be out of alignment.
Opting out – particularly if real estate prices have dropped dramatically – can be impossible for homeowners. Litigating creates a David and Goliath situation, apart from the issues I raised above. Whoever has the most money tends to win in Civil Court. How many homeowners have such deep pockets ? In addition, the money is in representing well-heeled Defendants where insurance companies are footing the bill, not in representing the truly-wronged lowly homeowner. Good luck getting top-notch legal counsel to represent you if you’re the aggrieved homeowner.
Cheers !