Homeowner associations (HOAs) can be a force of extreme good or extreme evil, and everything in between. Today, I’ll discuss the benefits of an HOA and why you might want to live in a neighborhood that has one.
Next week, I’ll be following up on today’s article with some of the concerns around HOA. You’ll want to stick around for next week’s article because there’s lots of juicy crazy surrounding HOAs, and I will be using some stories to illustrate the cons of HOAs.
Fun fact: I actually researched whether it should be “a HOA” or “an HOA” and the internet was not definitive. I went with what felt right to me.
And just a head’s up, I figured out how to embed videos and GIFs for your reading pleasure, so buckle up.
What is a Homeowner Association?
According to Homebuyer.com, “an HOA is a non-profit organization made up of volunteers and a governing body that makes and enforces rules for a subdivision of homes, condominium complex or planned unit development.”
Basically, a group of the neighbors become your neighborhood government. (I know you’re picturing Gladys next door wearing George Washington’s wig!)
A Brief History of the HOA
According to Business Insider, HOAs date back to the mid-19th century (the 1800s, for those of us who can never remember how to translate it to numbers!), but they didn’t start to gain much traction until the 1960s.
This timing makes total sense to me because it corresponds to the rise of suburbia, which is the locale with which we most associate HOAs. It also corresponds to a time in our collective history where housing was often segregated along racial lines, and the HOAs were often used to maintain that status quo. Fair housing concerns deserve their own article, so I’m not going to dig into those complex issues today, but I would be remiss not to call out this part of their history.
Business Insider’s article cites “80% of homes in new subdivisions are part of a homeowners association.” HOAs aren’t going away, so it’s important to review these considerations if you are thinking about buying into a subdivision with an HOA.
Mandatory or Voluntary
In Michigan, we have both voluntary and required HOA participation. In some developments, the builder has written the HOA into the development records and deeds, usually because there are common elements that the neighborhood will be required to maintain. If you buy a house in the development, you’re in the HOA regardless of whether you want to be a part of it.
Some subdivisions have voluntary HOAs. If you join the HOA and pay the dues, you’re in. You get a say in what the HOA is up to and how it spends the money. I often see these in neighborhoods where the neighbors have basically banded together to raise money for snow removal and community events.
Of course, some people are going to be free-riders, not paying their dues and still getting snow removal. But on the flip side, these individuals can’t complain when the taco truck shows up instead of the grilled cheese truck for the summer block party. They are also going to get the stink eye from the neighbors around them who pay dues in good faith for the greater good.
Pros of Homeowner Associations
I’m an upbeat, positive sort of person so I decided to tackle the positives of HOAs in this first article. My current neighborhood does not have an HOA, so I’ll also provide some perspective from that side of the fence on some things I personally could benefit from.
Shared Maintenance Costs
This one is a biggie for me. Usually HOAs handle snow removal, lawn maintenance and landscaping for common areas (at a minimum). If you are in a condo association, the HOA also likely covers exterior maintenance and repair to the roof and exterior of your home, possibly some of the utilities.
Every winter, I start to get a little antsy about my neighborhood’s snow removal, or lack thereof. We live on public roads, so technically Wayne County is supposed to plow our roads. (Excuse me while I wipe away tears of laughter over here.) We have someone in the neighborhood who will often plow maybe 1/3 of the streets if he’s in the mood, which is better than nothing, but still . . . not awesome to never be sure if your street will be passable after a big snow.
Fun video below to remind you to enjoy summer while it lasts. 👇🏻
Shared Amenities
Often with an HOA you have access to some boss amenities, like a pool, fitness center, parks, etc. The HOA allows the subdivision to collect dues and maintain these amenities for the use of its members. I would love to have access to common spaces or a pool!
These shared amenities can greatly enhance your enjoyment of your home. Kids driving you crazy? Walk over to the neighborhood park to let them burn off that energy. Air conditioning goes out on a hot day? Cool off in that swimming pool which is always magically maintained and repaired without you having to do anything. These types of amenities improve the quality of life in the neighborhood.
Community
Because an HOA is an organized group with a budget, they often organize events for the community. Everything from block parties, to food trucks to Santa driving through the neighborhood in his red pickup truck. If you want to live in a neighborhood that organizes events like these, an HOA might be for you.
This is not to say neighborhoods without an HOA don’t put on similar events – they do! However, it would seem communities with an active HOA are more likely to have them.
There Are Rules
Gosh, I love a good set of rules. Hello, I was in human resources for 10 years, the place where rule lovers go to be together.
HOAs enforce existing rules and facilitate the creation of new rules, as allowed under the HOA by-laws. Why is this authority a great thing? Because you don’t have to worry about your neighbors doing crazy stuff that impacts the quiet enjoyment of your property or devalues your property. E.g. putting a stripped down car on blocks on the lawn, having parties until 3 a.m. when you have to work the next day and painting the bricks on their facade an ugly shade of eggplant.
If your neighborhood does not have an HOA to set and enforce these types of rules, you have to rely on your local ordinances and law enforcement to settle disputes. Unfortunately, most municipalities haven’t outlawed that particular shade of purple for those bricks. Also, once the police get involved, the situation is immediately escalated from a dispute between neighbors to DEFCON 3, and I’ve never heard of a good ending to this tale.
Maintenance of Property Values
This benefit is really the effect of the “the rules” benefit, but I felt it deserved its own segment. I’m a Realtor (like I’d let you forget), so this piece of the puzzle is what catches my interest.
When the neighborhood has rules about property aesthetics, architecture and maintenance, there is a strong likelihood the neighborhood is going to be more visually attractive than it would otherwise be, right? If a potential buyer drives by, they will observe that the neighborhood is well-kept and pleasing to the eye. People notice, which increases the desirability of the neighborhood, which increases market value. See where I am going with this train of thought?
That’s a wrap on the benefits of an HOA. Join us next week on The Young and the Restless (is that show still on?). I hope I gave you a laugh and some food for thought on the benefits of an HOA. Come back next week for some concerns around HOAs and the juicy tales I have lined up to illustrate them.
As always, I’m here to help with all your home ownership questions, concerns, goals and dreams. Reach out if I can help in any way!
