In the June 23, 2012 NY Times article by David Segal, “A Georgia Town Takes the People’s Business Private,” Segal asks and answers, “What is local government for? For years, one answer, at least implicitly, was ‘to provide steady jobs with good wages.’” It reduces public government to just providing for the maintenance of the community, following the lead of the other form of local government, the private HOA regime whose purpose is to just “maintain property values.”
While the answer is in keeping with the theme of the article regarding the privatization of government services, it ignores the unique functions that distinguish a public government entity from a business, or more importantly, a membership nonprofit business. Just what are those unique functions?
Are governments just a business? Are businesses just a government? Are HOAs just a business? Are HOAs just a local government? In his April 2, 2008 CAI Ungated blog entry, CEO Skiba writes: “Community associations are not governments . . . . Yet they are clearly democratic in their operations.” Skiba continues further with, “The solution to that problem is not to replace democracy with tyranny, royalty, or some other form of government, but to work to make the democratic process better and to hold those elected accountable. . . .” He seems to be pleading that whatever aspect of democracy there is in HOAs, we must make serious improvements. Note his use of “some other form government” is an admission that HOAs are political governments.
I find it hard to accept the above assertion by Skiba that CAI supports making HOAs more democratic. Rather, CAI supports the top-down imposition of UCIOA laws that blatantly contradict its other pronouncements that HOAs are the town hall ideal of democratic governance. And it contradicts CAI’s documented positions before the courts and state legislatures opposing constitutional protections for homeowners in HOAs.
Political scientists (among them Wayne Hyatt, Evan McKenzie, and Steven Siegel) have accepted a compromise position that HOAs are a sui generis entity, a unique combination of business and public government functions that require a new set of laws to establish a just and fair governance of people living in an HOA controlled community. Yet, since Siegel’s seminal paper of 1998 (Wm & Mary Bill of Rights Jnl), the laws remain pro-HOA without HOA accountability to the state, and without the equal protection of laws that apply to all other citizens except those living under HOA regimes.
A detailed discussion of the de facto status of HOAs as state actor governments can be found in The Foundations of Homeowners Associations and the New America, “Part III, American Political Governments.”