I understand what HOA’s do, and was first introduced to the term in a condo building (not mine). I understand in a condo building, or high rise, you’re all sharing one building and need to contribute to that building’s maintenance. But I don’t understand HOA’s in neighborhoods…when you live in your own house. Is it only certain neighborhoods? I know someone who lives on a nice street in a suburb and there’s no HOA. Who decides if there is one, and what do neighborhood HOA’s exist for? Are you allowed to opt out?
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John Oliver has an episode on HOAs that does a pretty decent job at explaining the basics of HOAs, and why it’ll be harder and harder to avoid them in the future.
They’re a way to subsidize the cost of the building project as a whole. Some HOAs can cover the cost of maintaince on the roads, parks, playgrounds, communal areas, planters, and medians. They’re usually set up as the development is built, and can act as mini local governments.
They’re “sold” as a way to keep property values up, to keep the neighborhoods looking nice, and to help settle disputes between neighbors. Which to some degree they can and do.
In most of the country, you can see for yourself where HOAs are, and how strict they are by just driving around different local neighborhoods. Notice one neighborhood has a tree in every front yard, no garbage/recycling bins in sight, and only 2 cars in the driveway? Notice another neighborhood doesn’t have any cars parked on the road? There’s a good chance that’s a strict HOA. Or how a neighborhood has cars parked in the lawn? Maybe theres a huge variety of trees/shrubs/bushes/hedges. They likely don’t have a HOA or any enforcement.
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