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?
In: Other
The idea is that a large part of the value of the house is the location. Of all properties. The value of surrounding properties affect the value of the property itself. So an HOA is an attempt to prevent the value of the surrounding properties from decreasing, so that the value of the property itself does not decrease with it.
Most neighborhoods that have been built in the last 20’ish years now-adays have community amenities such as neighborhood parks, swimming pools, playscapes, dog parks, etc, that you would normally find in apartment / condo complexes. It’s become pretty standard in more modern neighborhoods.
Gone are the days where a neighborhood was just a community of homes and nothing more.
In the last 11 years, I have lived in 3 different homes in neighborhoods with HOAs (*1st one rented a home, 2nd and 3rd ones we purchased*) with HOA fees. And the fees usually covered the cost of said amenities.
Secondly, the other thing about HOAs is that you have this association that has rules regarding everyone’s home in the neighborhood. Most people think that they have too much power (*How does this ruling association get to have any say on what I do with MY home!*), which is the main problem people have with them.
Now, most discussion on reddit, and social media in general, will share horror stories about busy body HOAs and/or insane requirements, but IMO, those situations are much rare than people think.
Personal experiences along with experiences from many of my friends and family regarding HOAs has been pretty normal and uneventful really. All of them were just standard fare rules such as “*Keep your yard maintained*”, “*Don’t leave trash and litter all over the place*”, “*be courteous of your neighbors, i.e. dont throw keggers 7 days a week and leave beer cans all over the place*”. Stuff like that.
I’ve always participated in the HOAs, and in my 11 years, nothing crazy ever came up. Biannual/ Yearly meetings were the usual boring stuff such as: “*Are we renewing the contract with XYZ Maintainence company, or do we want yo go with ABC Maintainence company instead?*”, and “*What community events to we want to plan this year?*”.
As to your questions regarding how do neighborhoods get HOAs?
Usually they are automatically included in brand new neighborhoods where all the houses are new builds. Usually those are called “Builder HOAs”, where the builders apply a very standard HOA.
But in older neighborhoods, and in newer neighborhoods where a certain percentage of the homes are not owned by the builder, everyone in the community were come together and vote on whether to have an HOA or not.
Think of it like the creation of a Union, where enough workers vote on unionizing, and if there is enough votes, a Union is created.
And in the same vein, once a Union or an HOA is voted in, everyone is forced to join it, even if you voted against it. It’s a majority rule situation.
As for Opting out, that depends on each individual neighborhood. Again, like a Union, some will let you opt out, some dont.
They exist because local governments don’t want all the extra expenses, but owners like to protect their property values by enforcing ordinances and housing builders like building lots of houses.
No local government, no ordinances or enforcement, but what if there was some kind of contract everyone would have to sign when they buy the house with a sort of private government? Thus, the HOA.
good answers here, but HOAs are typically required by municipalities, not just put in place by a developer. Just like in a condo, they provide standards and communication and common area maintenance, so community pools, sidewalks, and even roads. Essentially if you have a gate in your community, it is a private road and maintained like an elevator is maintained in a condo.
Most cities want them now, because what used to happen is the developer would give the road right of way and sewer to the city. Which is all fine and good until they need to fix said sewer or road. And who wants to pay for that? Certainly not tax payers.
The other benefit is that basically creates a self enforcing mechanism for maintaining property standards, mowed lawns, etc. this helps the developer keep the neighborhood top notch for selling his pipeline of units (they don’t all sell at once). But it also absolves the city of having to take care or get involved in neighborhood disputes. Again, why get the policy or city council involved in something that you can make sure gets farmed out to someone else for free?
Some neighborhoods have shared land. Basic maintenance and taxes are a bare minimum cost for residents to split. The residents may also choose to add amenities to the shared space and can split those costs as well.
Apart from that, certain neighborhoods may make their own policies to maintain a given state. For example: an agreement that no one will paint their house a strange color.
There’s no reason any neighborhood couldn’t do this if all were in agreement but it is most commonly implemented when the neighborhood is first created.
Sometimes I’ll drive around neighborhoods that obviously don’t have HOAs and realize I’m very glad mine does, at least from a clean yard’s perspective. Mandating nice looking yards (doesn’t even have to be grass), and regular maintenance and upkeep of the house does so much.
Some neighborhoods could look one thousand times better if they had regular yard work and some fresh paint on the houses.
Where I live in Utah, HOAs exist because the city refuses to be responsible for basic necessities like roads and sewage.
New development is often only allowed if a “company” (the HOA) takes financial responsibility for the roads, plumbing, and other services of the neighborhood. The HOA isn’t allowed to dissolve because then no one would be responsible for those services.
My own neighborhood plumbing is so badly designed and documented that we have to cut off water to 100 houses if *anyone* needs maintenance.
I hate it. Raise my taxes and make the government provide public services!
As I understand it, they prevent your neighbors from having their property look like crap and dragging down the vibes/prices.
Cities require new builds to be HAO to absolve the city from responsibilities like trash and maintenance while still collecting property tax
At its core, an HOA is a government. Governments create a shared set of rules that everyone who lives in its jurisdiction is expected to abide by, ostensibly for the benefit of the group of people living in that jurisdiction. We have national, state, and town governments, and an HOA can be thought of as a “neighborhood government”. In this model, the HOA fee is the tax collected by that government to run it. I’m oversimplifying, but some examples of what governments do:
* Providing services – Governments provide services and infrastructure, such as public roads, sewers, and schools, that support opportunities and protect citizens from exploitation.
* Providing benefits – Governments provide benefits such as food assistance, housing help, utility bill assistance, health insurance, and Social Security.
* Enforcing rules – Governments ensure that citizens follow rules and regulations, and that they don’t violate the rights of others. (This isn’t really a “benefit”, but it’s something that governments need to have in order to be effective).
When shopping for a (single family) home, one house we ran into had an HOA. The community (about 10-12 houses) was on a private road, so some of the town’s rules/benefits didn’t extend into the community. The fees paid were used to maintain the road, as well as negotiate a cheaper trash pickup rate for everyone on the street. Normally, this is a win-win situation; homeowners pay less than if they had individual contracts, and the trash pickup service was guaranteed all the customers on that road, resulting in more subscriptions than if people made the choice individually. The only people who wouldn’t win, are those who feel like they don’t need the service, and thus are paying for something that doesn’t benefit them.
Latest Answers