Flutterby™! : HOA 2007-12-03 04:40:39.682536+00

HOA

2007-12-03 04:40:39.682536+00 by Dan Lyke 13 comments

For all of the value a Home Owner's Association is supposed to provide, it's amazing how much the existence of one depresses the value of a house...

HOAs are a pain in the butt. However I chose to buy in a neighborhood with one because I've seen how neighborhoods deteriorate without them. Looking at two similar houses in similar neighborhoods one with and one without an HOA you will probably find the one without to be valued a little higher. Go visit the same neighborhoods ten years later, though, and they will no longer be similar. The house in the HOA controlled neighborhood should have retained more of its value and the neighborhood will generally be in much better repair.

I think this is the general idea behind governments as well. With the same pros & cons... (not to mention that government is made of up pro-cons)

Nancy was watching (and I was lurking) a TV show about home values yesterday. The 550sqft Condo in D.C. was almost $400k, made me feel like a millionaire! But then, the shows are probably tasked with fluffing the flaccid fortunes of real estate investors, so it worked!

Side note: I used to hang with a guy that did well with buying/selling fixing up high dollar antiques. His house was amazing, full of what he called his 'mistakes'. He had a motto: Don't buy something just for it's 'investment value', you could be wrong and be stuck with it. Therefore, buy things you like, and it has to be worth it's purchase price to you.

We live in a very small town, and three areas around us are controlled by HOAs, including ours. Our neighborhood is relatively clean and the cost of houses is a bit more, the same with the other two areas controlled by their own HOAs. No junk cars in the yards, no parking on the street, lawns and defensible space that is kept up to fire code... In some of the other surrounding neighborhoods in this area, it's just not the case.

If it drives down the price of our house, I'm okay with that. We're not buying the house purely for value, we're buying it because it's a place we want to live. If we were investing, we probably wouldn't be buying in this location anyway.

We have an HOA comprised of the 7 homes living on a private road. Its main focus is the maintenance of the road, but also included are some other minor limitations. No poultry, no more than three horses, no more than two freestanding buildings in addition to the home, no subdivision of less than two acres. Cost is $100/year and a footage based adjustment for additional costs when storms wash out the road. Easy to live with.

Some HOAs want to control everything from the outside color of the house, to the height of the lawn to what goes on inside the house (ie no smoking) as well as who can live there. Costs can be significant running $500+ per month and may include mortgages for common areas as well as maintenance costs. Far too intrusive for my nature.

We're looking in neighborhoods that are between a hundred and fifty or sixty years old, and we're comparing them to subdivisions with HOAs that are from twenty, maybe thirty years old to new construction. In the HOA subdivisions, every house is identical, modulo some interior upgrades, so there's not much economic mixing.

Our perception of value is that the HOA based blocks start out at a fairly high price and then decline, and keep a fairly homogenous mix of people, whereas the non HOA based neighborhoods can evolve and improve, both because the houses can be modified and improved, but also because you get a mix of ages that keeps the area more vibrant long-term.

Some of this is our perception, but it seems to be strongly backed up by asking and sales price.

Perhaps it's a having kids thing or something, but I can't imagine moving somewhere where I feel I have to pay money to have an organization which assuages my fears that the neighbors might possibly be different than me.

You, over there, with the melting pot...... get that outta here. We don't allow that here.....

Dan, my experience in living in both is that the non HOA based neighborhoods devolve and decline. In Chattanooga, Ferger Place, where tom lives, has only remained relatively free of urban blight due to its HOA.

Topspin, the current HOA controlled neighborhood I live in is the most ethnically diverse neighborhood I've ever lived in. Granted I moved from a fairly homogeneous town to a town where you can hear several different languages spoken by the customers in a visit to the grocery store but the HOA certainly hasn't prevented this diversity from entering my neighborhood.

Topspin, I'm spanish, my girlfriend is white, there's a mexican family on once side, immigrant italians on the other, and a korean woman on our HOA board. Sure, we all make between 20k and 200k per year per family, but beyond that, I don't see how much more different we could be. It makes a great neighborhood, our streets are taken care of, our snow is cleared in the winter, we have our own water wells, and our defensible space is very strictly enforced. For an extra $35 a month on top of our house payment, I really can't see the downside.

Perhaps we CAN'T all agree that there are enough governmental restrictions on how my home is plumbed, wired, and appears? We need to create FURTHER organizations which stifle any differences or personality or changes to the 'hood without approval? Once one submits to such organizations, one essentially gives up the right to control their own property. Sure, in your case and Larry's case the rules AREN'T restrictive, but over time, as the people age and fear of change becomes an issue, you simply can't control what "guidelines" the HOA might pass.

JT, I seem to hear you saying that the snow being cleared, the wells have water, and defensible space matter more than your personal liberty with your property. Granted, it's a trade and I'm glad such places exist for folks who want them, I guess, but those issues aren't my idea of what makes a neighborhood attractive.

Larry, I'd agree that tom's housing value is probably maintained by a strong HOA, but that doesn't mean they are part of the neighborhood as a whole. They are essentially an island in that area of town. tom is likely one of the few who'd walk his kids to school (as I know he once did) down the declining, blighted streets nearby. tom is, of course, an amazing man with a full and unique grasp of what educating and teaching his kids means, but Chattanooga is full of folks who take pride in not "coming off the mountain" when they don't have to or associating with those who aren't like them or allowing their kids to be exposed to such things.

Some friends live in such, as a matter of fact he is the president of the HOA, and they've had nothing but headaches as folks complain about the choice of flowers at the entrance, how close to the road people park in their own driveway, how loud the lawn folks are, etc. Petty.... but that's what control comes down to for many people.... how much power can we get over the others.

#Comment Re: made: 2007-12-03 18:00:40.573009+00 by: Dan Lyke [edit history]

Hmmm... I guess at this point we get back to discussions about community, and what it takes to live in an area (virtual or real) where we all want to better our community, versus one where we need legal structures to keep the slackers inline. My observation is that I like the former, but as I think about it more we're also going to be paying something of a premium to live in an area where that's more likely to happen.

And maybe that's what I'm really seeing: That in the neighborhoods where such things are self-correcting the prices are higher, in neighborhoods where the residents feel they have to be reinforced the prices are middling, and in neighborhoods where nobody cares the prices are lowest, but I've already filtered those out (sometimes for geographic or other reasons) so I don't think about 'em too much.

The HOA and I didn't get along. It was mostly over vehicles, but the kicker was the letter, from the HOA lawyer, demanding that Paula Conner (my Mom) get rid of the unauthorized dog.

That, and I didn't care for the color scheme they picked for the buildings the last few years I lived there.

Once I sold that place, I vowed never again to live anywhere with an HOA. Petty dictators, precisely because the stakes are so low.