Goldwater Institute: stop mandating HOAs

 I applaud The Goldwater Institute’s position that the government mandating of HOAs must cease. 

I believe that the Institute must also address the reality that government intervention has produced unjust laws that violate the rights and freedoms of the people.  And, in keeping with its philosophy of protecting individual rights, the Institute is in a position to support corrective action to remove these unjust laws that mimic the private declarations, creating an imprimatur of state approval of private contracts. 
Either rescind the condo and planned community statutes need to be rescinded or protection provided for homeowner rights under the law.  The HOA governing documents, these so-called “private constitutions”, are a top-down imposition of profit seeking developers on the community by developers, encouraged, supported, and defended by state governments. 
These private entity developers soon leave without any concerns about the problems of democratic government that they have created for the homeowners, the people.


The Goldwater Institute Daily Update, Jan. 13, 2009

The fix for HOAs won’t come from government

The Arizona Republic recently reported that developer abandonment threatens bankruptcy for “as many as 200 of the more than 10,000” Arizona homeowner’s association communities. If there is an HOA bubble that is about to burst, it was created by government mandates and subsidies, so the best reform option is to stop those policies, not throttle contractually-created communities with more regulation.

Tucked in the middle of the Republic’s article is a fleeting mention of how towns like Gilbert force developers to create HOA communities for new developments by conditioning required permitting and approvals on HOA creation. But local HOA mandates aren’t the only governmental intervention. For decades, the Federal Housing Administration has indirectly subsidized the creation of HOAs by giving buyers easier access to mortgage financing when buying into an HOA community.
Government policies have caused developers to oversupply HOAs to meet artificial demand for HOA communities. When HOAs are created to satiate government bureaucrats, rather than homeowners, it shouldn’t be surprising that many HOA communities are neither well-crafted nor homeowner-friendly. But, the solution to the HOA problem is not more government intervention. It is less. The first step is for government to stop mandating and subsidizing the creation of HOAs.

Nick Dranias holds the Goldwater Institute Clarence J. and Katherine P. Duncan chair for constitutional government and is the director of the Institute’s Dorothy D. and Joseph A. Moller Center for Constitutional Government.

Published in: on January 14, 2009 at 7:53 am  Comments (1)  

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  1. […] [HOA Constitutional Government] Goldwater Institute: stop mandating HOAs […]

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