Elitist large-scale HOAs

Understanding private elitist HOAs as social welfare HOAs

Data on HOA member demographics is scare but I’ve been able to uncover  documents, 11 years apart, that lead one to believe that H-O-As are elitist for the most part.  A CAI  survey showed 79% respondents with incomes over $50,000 and 86% with some college of more.  US Census showed 24.4% and 44.9% respectively. A confirming study on a large-scale H-O-A showed 88.1% with some college or more and 76.4% with income over $45,000.

According to CAI’s LSA (large-scale associations) category of 1,000 or more units, a Nevada CAI survey showed a mere 2.0% were LSAs. This emphasis by CAI on LSAs, a small minority of HOAs across the country, impacts all H-O-As of every size in the state as a result of its intense lobbying efforts, its one size fits all policy.

These surveys are not  consistent with the totality of social welfare HOAs as contained in the IRS databases of 36,532 organizations filing under (c)4. Just 10.8% (3,931) of these organizations met the criteria for “homeowner associations” under the IRS subcategories, a far contrast with the surveys. Analyzing the justification by the IRS for one large-scale H-O-A raised concerns about the (c)4 tax-exempt process.

The absence of any discussion by SCG, a large-scale H-O-A, of it’s social welfare status  and related activities is compelling.  Based on my many years exposure to HOA legalities, I would hazard a guess that the board had advisers and assistance in preparing and filing its application.  SCG has close ties to CAI by virtue of its directors being CAI members, its attorney and CAM being CAI members, and its accounting firm, Mansperger Patterson & McMullin, also being a CAI member.

Read the full research study at elitist H-O-As.

Who controls CAI and its 50 state HOA lobbying committees?

CAI recently announced a record membership of some 31,000 members. But what does that mean?  Just what is the composition of its membership between attorneys, managers  and management firms, individual “volunteers” from HOAs, and others?  Is the composition of CAI’s governing body  similar to that of its membership?

CAI membership facts (CAI Industry Data)

Estimated percent members from different HOAs:                                  9.8%

Estimated percent members who are individual HOA members:          5.9%

Estimated percent individual members to  people in an HOA:                 .6%

In comparison: Estimated AARP percentage membership:                  36.0%

Estimated members who are individuals in a distinct HOA:                 18,600

CAI’s latest “Industry Data” shows 314,000 HOAs in America, making its membership some 9.8% of HOAs. Just about what it was back in 2006 when I did a similar analysis. BUT, and a big but, is it really 9.8%? Only if all members came from a different HOA and all members live in an HOA. For instance, do all lawyers and managers live in an HOA? Not revealed by CAI.

Before CAI reacted to my revelations in 2006 and “circled its wagons,” I was able to determine that “individual volunteers” amounted to some 55% – 60% of its membership, which was 26,000 strong. And that was after dropping HOAs per se as members and allowing for this new category. Discounts were allowed for multiple members from the same HOA. It is assumed by this offer that it is the HOA itself that is paying for these “volunteers.” (Prior to this change in membership, CAI advertised some 16,000 members).

 Looking at the ratios again, CAI could have members in at most only 5.9% different HOAs (.6 x 31,000 / 314,000). About the same as in 2006. Yet, its lobbyists like to say before the media and legislative committees that there are 10,000 or 4,000 HOAs in this state without indicating their “at best” membership size.

 Taking the CAI “people” figure of 62.3 million residents, that means CAI “represents” a meager .6% – that’s .006 – of the people living in HOAs.  In contrast, 2010 AARP states membership of 35,700,000, and that’s  36% of the 50 plus population based on the US Census  estimate.

CAI Governing body (CAI Governance, 2012)

Estimated percent individual representation on CAI Board:                         14%

Estimated percent individual members:                                                          60%

CAI is governed by a 14 person Board of Trustees, not to be confused with its “three Membership Representation Groups (MRGs), elected members who give their constituencies a voice in crafting CAI policy and work to ensure that CAI continues to provide services and benefits that members need and value.” (My emphasis). They are: Association of Professional Community Managers (APCM) Board, Business Partners Council, and Community Association Volunteers Committee, none of which can be accessed by the public.

 However, from a CAI recent press release, the14 member Board of Trustees consists of:

*  CAI’s president and president-elect are elected by members of the Board of Trustees.

* Four at-large members are appointed by a board-selected Nominating Committee (“at large” members), and

* eight members are appointed by CAI’s three membership representation groups:

* four by APCM Board members (managers), and

* two each by the CAVC (“volunteers”) and BPC (service providers).

Note that no attorneys are listed, but the BoT in 2006 showed 4 attorneys as members. The 2012 composition is the same:

President/president-elect – 2 managers

Trustees – 6 managers

4 attorneys (including Scott Carpenter)

2 “volunteers”

That’s about 14% representation by homeowners on the CAI governing body whose membership consists of 60% homeowner “volunteers.”

 Surely CAI is NOT an association representing HOAs or even homeowners, but representing the business interested vendors serving HOAs.

HOA demographics: About 25% Arizonans live under HOA regimes

Continuing my investigation into HOA demographics, I researched the percent of the Arizona population living under a homeowners association government.  Surprisingly, that game to 23.4%.

 As a very good indicator, although subject to a more refined analysis, data from the Arizona Corporation Commission records showed 7,297 nonprofit corporations with one of the following words in their names: HOA, homeowners association, condominium, condo, property owners association, and community association.  Based on industry data from CAI, the following averages were obtained over nine entries, spanning 1970 through 2009:

 average residents per HOA:            211

average Units per HOA:                    82

average residents per Unit:              2.6

 The analysis reveals an estimated 600,069 HOA units and 1,543,067 people living in HOAs, based on a 2009 Arizona population estimate of 6,595,778.  That’s 23.4% of the people subject to a second form of local government, the HOA, with their constructive notice constitutions not subject to or approved by the state of Arizona, that deny the constitutional protections of due process and the equal application of the Arizona laws.