Another Culprit in the Housing Meltdown: Those F#$%&!#$!&#! Homeowners’ Associations
For whatever reason, almost 60 million Americans live under the watchful eye of one of those Godforsaken homeowners’ associations. What the F$#!$ is the attraction? You have all the risks and responsibilities of owning your own home, and yet you’re right under somebody’s thumb as if you were a tenant. The worst of both!
We’ve all heard news stories — and first person accounts — about homeowners’ associations that give new meaning to words like Petty and Anal Retentive. No pets. Or even better, you can have a dog as long as it doesn’t go above a certain weight. “Fido has gained three pounds. Get rid of him or get out.”
Your house has to be a certain color. You’re only allowed to have certain types of plants in your yard. Your fence (if you’re even allowed to have one) has to be a certain type/size/color. No vehicles can be parked overnight in your driveway or on the street in front of your house — your own vehicles or your guests’.
Who the hell are these small-minded douchebags? All they’re doing is screaming to the world that their potty training was absolutely stone cold fuckin’ Brutal!
And now, if you’re frantically looking for ways to avoid foreclosure, here’s another thing your friendly hall monitor won’t let you do: Rent out your house as an income property.
Eww! Renters! They’re dirty, they use drugs, they’ll never amount to anything and they bring down property values!
As this article says: “Houses on the market are sitting empty and their would-be sellers are desperate for cash — but many homeowners associations are banning rentals…Even though demand for rentals is at an all-time high, 18 million housing units are sitting empty in the U.S.”
About 40% of homeowners’ associations have rules prohibiting owners from renting out their houses. And if that isn’t bad enough, there are entire towns that have these prohibitions. Take Madison, Mississippi (please!).
Preventing foreclosures — keeping people in their homes — is the way to recover from this crisis; or at least to prevent us from spiraling even further downward. Presumably nobody disagrees with that. The only disagreement is over the method; whether these foreclosures are prevented by “government intervention” or by millions of lazy homeowners suddenly getting a grip and pulling themselves up by their bootstraps.
I’m not usually in favor of the federal government stepping in and overriding local authority. But in this case: Do It!
Congress needs to pass a law telling these anal homeowners’ associations to get out of the way. Local governments — homeowners’ associations, municipal governments — can NOT be allowed to prevent a desperate property owner from renting out his own house.
A federal law like this would allow tens of thousands — maybe millions — of strapped homeowners to save themselves from foreclosure and bankruptcy by renting out their homes.
And unlike the trillions of dollars we've already handed to Wall Street — this law wouldn’t cost a dime.
Congress: Do the right thing.
cross-posted at Bring It On!
Labels: homeowners associations housing crisis, homeowners associations renters, Madison Mississippi
posted by Tom Harper @ 5:42 PM
15 Comments:
That's a great idea. Anything legal that prevents foreclosures...
J: Yup, that has to be the top priority.
We have a bizarre fixation on ownership in this country to our detriment.
That said, renters ARE filthy hippie pothead commies, so I guess they have some sort of point.
Um, sir, if it won't cost a dime, then how will your plan help stimulate the economy? You must be a renter!
Randal: You've got it. Not only am I a renter, but I'm going to rent a house next door to YOU and wreck your neighborhood with drugs, sleazy welfare recipients and reduced property values :)
The first home we bought was in a neighborhood that had once been a housing development. At closing we were given a document containing about 40 covenants residents were expected to sign and abide by. Most of them were reasonable, common-sense things. For example, not storing your garbage cans in front of or beside your home where they would be on display to passers-by, and definitely not just leaving your garbage can out by the street between pickups. Some covenants were contrived and obviously being widely ignored in the neighborhood. There was no active neighborhood group charged with monitoring or enforcement. I suppose if someone became irate about a violation, they could take their neighbor to court, using the covenant as grounds for some kind of remedy.
As you say, Tom, active groups are a whole 'nother matter. Behind them, often, are scared, picky-picky types who've sunk a lot of money into their homes, made a longterm commitment, and don't want to suffer a loss of enjoyment of their surroundings and property value because of people with bizarre tastes or habits and attitudes that barnyard animals would find disgusting. Those things, BTW, aren't exclusive to renters.
You-know-what does happen. In my community, one nutball who'd already been in trouble with the city for code violations built up a collection of rusting, mostly non-running vehicles he considered priceless collector cars. To the rest of us, they were junkers. His collection was stored over nearly every square inch of the yard behind, beside and even in front of his home.
The guy skirmished with neighbors and authorities for years. When finally forced to give it up, the city paid nearly all the cost for towing the junk away and disposing of it. The guy had blown most of his money on buying the cars and working on them. Then, HAZMAT had to come in and remove soil because leaking fuel and fluids had contaminated the ground.
In another case, a couple painted their fence and home in bizarre patterns and colors to spite neighbors they were feuding with.
The thing about the homeowner associations is that people have a choice. They can check out what they're buying into by talking to people in the neighborhood and by reading the rules. If the homeowners association and its rules are unacceptable to prospective buyers, they should keep looking.
The thing homeowners association members might want to keep in mind in the current situation is that renters willing to abide by their rules could be a blessing, while empty homes proliferating could mean blight and a sure loss in property values. IOW, some flexibility might be in their own picky-picky self-interest.
I know I've said a thousand times that I'm in real estate (sorry if I'm a broke record). What I can tell you about homeowners associations fits in one well-known and thank-goodness-still-abhorred-word: NAZI.
They are f'ing NAZIS. I would sooner live in a cardboard box on Broad Street than live in a PUD (planned unit development, i.e., homeowners association). I would be the person constantly in trouble, and constantly telling the association to stick it in creative places.
Local news item from Central Virginia: one of the haughtiest PUD's here is seeing their association go broke, because a lot of strapped homeowners are foregoing their monthly dues in favor of eating dinner each night and paying the mortgage. The associations can file liens against your property, and become a preferred creditor against you. How nice is that, and people choose to live in these little Berlins? Amazes me to no end.
A home is the single largest investment a person will make in their lives, and people have a right to protect that investment. However, with 18 million empty homes, and millions of homeless families, we shouldn't be putting dollars before people.
if you don't want to abide by the rules that govern your neighborhood, then don't buy a house there. having said that, the homeowner assoc. might want to take another look at the rules to possibly allow renters so their friends and neighbors won't lose their homes. this is, after all an unusual situation we are in right now. sometimes bending the rules (temporarily) benefits everyone.
I live out in the country and have no neighbors, and that is one reason I chose to live where i do.
OMG! Our condo association just increased our dog limit from one to two, but only if each is under a certain weight. We're NAZI's! ;-)
SW: Our first house was in an older neighborhood, built a few years after WWII. Some of the deeds we had to sign included "no Negros on the premises" and also "no Japs." (Their wording, not mine.) The realtor just laughed when he showed them to us.
The neighborhood seemed to be a magnet for people like the neighbor you described -- people who think wealth is measured in the number of old barely-running vehicles on the property and parked all up and down the street. We had 3 neighbors like that (not at the same time) and 2 of them owned their homes.
When you've had a few "bad" neighbors (and who hasn't), I can see the attraction of living in a sterile nanny-state homeowners' association where everybody has to behave and be considerate. But overall it's not much of a tradeoff. I don't think I'd ever want to live where I'm governed by a bunch of those "scared, picky-picky types."
Bee: "Nazis" and "little Berlins" sounds just like everything I've heard about those places. I've had loud neighbors and neighbors who park their junk-ass cars all up and down the street; but I'll take that any day over living under the thumb of some anal busybody.
Lew: You're right, we definitely shouldn't be putting dollars before people. And it makes no sense at all that some people would rather be surrounded by empty foreclosed houses than have those icky renters living nearby.
Kate: No argument there. For that reason, I never have (and God willing never will) lived in one of those controlled environments. But in this current crisis, it's not enough to just say "those people shouldn't have signed the agreement."
Kvatch: There was this totally sick story in the news a few years ago. A woman in one of those homeowners' associations had a small dog whose weight was "legal" under the association rules. Then her dog started putting on weight, and a petty neighbor squealed on her to the authorities. The woman was desperately underfeeding her dog to make him lose weight so she wouldn't have to get rid of him (or be evicted) and the dog died.
....and, it would lower rent prices due to increased supply, which would help out strapped renters, but then again would hurt those who are currently renting out their homes.
Drat! Always a downside!!!!
Prague Twin: Good point -- the increased supply of rentals would mean lower rents. It might be a slight downside for the landlord, but then again, the money that the renters aren't giving to the landlord is money that they might use for shopping and stimulating the economy. Or so the theory goes anyway.
Long time no see; welcome back.
Tom wrote: "I don't think I'd ever want to live where I'm governed by a bunch of those "scared, picky-picky types."
Neither would I. I think I can understand some who go that route. I find it harder to understand those who buy in and then act all oppressed, either because they didn't read the rules or failed to think through the implications of living under those rules.
You can bet in some cases no renting = no minorities in our backyard as minorities tend to have a higher percent of renters. I'm not saying that's the case for all but some. There is still a mode of thought that minorities lower property value, even if they are coming in as owners let alone renters.
I think you have people falling head over heels into these places with draconian rules is because they are fixated with owning and don't see the bigger picture. They didn't see it ARM loans so why would this be different. They "own!" They are "respectable members of society" they have a "chip in the game" which means they too have their very own money pit.
And until the darn thing is paid off or triples in value overnight, you don't own that house, the bank does. And there is no promise that the value of that house will go up or down. I talked to a lot of people who made zip off their home and they were nice places.
I'll keep renting and being an alleged lowlife.
Ricardo: Good points. There's probably an unspoken desire to keep minorities out of those "decent" housing developments. And that obsession with "owning" probably clouds their judgment. Like you said, they signed those ARM papers without reading the contract; so they probably did the same thing with the homeowners' association by-laws.
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