“What Are Private Governments Worth?”, Amanda Agan & Alexander Tabarrok, Regulation, Cato Institute, Vol. 28, No. 3, Fall 2005
This is a very insightful question to ask and to answer, raising important public policy issues and providing direction for policy makers. To paraphrase, “Do the property value benefits of HOAs measure up to the protection and support received by state governments?” What is the government’s interest in promoting and encouraging these private governments?
October 9, 2005, Los Angeles Times Real Estate section
LETTERS TO THE EDITOR
TAPES ARE ON THE UP AND UP
If a common interest development were a governmental entity there would be no problem with what can and cannot be done in a public meeting.
What’s wrong with the one that’s been around for over 200 years? The US Constitution. Why must there be special constitutions for these de facto private governments? Just because these CID governments are not recognized doesn’t mean that they do not operate daily as the de facto governments over these territorial communities.
CIDs must be brought under the laws of the land that regulate governments and protect the rights of all citizens.
George K. Staropoli
Scottsdale, Ariz.
In regard to a move by one HOA to oust its board, Arizona’s Representative Chuck Gray told the Arizona Republic that “The homeowner’s ability to take control of their association mirrors the function of all government . . . . Prior to Aug. 12 residents needed two-thirds homeowner approval to force a recall election. [Now just a majority.]
Any bill that can be used to motivate homeowners into action against abusive boards does a service to all of us. But, don’t believe that this bill was a major victory over the forces of evil. No, it’s just one skirmish in a broader battle for rights and equality and against a legislature that refuses to recognize the broad constitutional wrongs being perpetrated on the people.
Under the mantra that citizens have the right to form private governments, and not be held accountable at all, to the state or under the 14th Amendment — as all municipalities are — the state perpetrates a gross injustice on homeowners. In other areas, where consumers actually sign a contract, the state has stepped in under its police powers to protect consumers — truth in lending, truth in advertising, protected classes of people, etc. But for some reason, not here with HOAs where the consumer has not even initialed the governing documents, nor explicitly signed away his constitutional rights, this gross injustice is allowed to continue.
Even in spite of media article after media article across the country, this injustice is allowed to continue. This failure to hold HOA boards accountable under the laws, as municipal governments are held accountable, reflects this injustice and the continued protection of the HOA private form of government by state governments.
It must stop today!
“[I]n the future, more complete forms of private secession may become possible. For example, if neighborhood associations become more numerous, the political pressures for substantial rebates from property taxes – for relief from the current system of ‘double taxation’ – are bound to grow.”
Private Neighborhoods and the Transformation of Local Government, Robert H. Nelson, (Urban Institute Press 2005).
The view that planned communities are equivalent to principalities is strongly presented in the book. Six chapters are reviewed from Parts V, Creating HOA Constitutions, and VI, Neighborhood Asociations in American Life, that include chapter titles of: Neighborhood Legislature, Freedom of Neighborhood Association, A Democracy of Property Owners and Neighborhood Secession.
To obtain the complete Commentaries on Private Associations and Local Government, download Secession (PDF).
For additional information, see the Ned Peirce Commentary in the Arizona Capitol Times, or United HOAS.
In the newly released book by Nelson, Private Neighborhoods, Nelson quotes Citizens Against Private Government HOAs (former name of this organization), pp. 342-3, Ch. 16, “The Executive Office”.
The material used (dated from 2003) reads, in part:
“According to this group, the lack of rights protection reflects in part the fact that ‘the HOA lacks a separation of powers doctrine as found in every level of American government’ . . . .”
“[W]hile members may vote for board members as if they were electing councilmen or legislators, the HOA is not a real democratic institution.”
The pattern of these chapters is to introduce prevalent problems and then the author presents his solutions.
Private Neighborhoods and the Transformation of Local Government, Robert H. Nelson, (Urban Institute Press 2005) [Not affiliated with the Urban Land Institute, ULI. See http://www.urban.org/%5D.
HOA Constitutional Government 