The Colorado General Assembly is back in session and no doubt someone will bring up homeowners associations. It’s become an annual topic of legislative action.
Maybe lawmakers should look to Nevada for ideas on how to rein in rogue HOA boards and protect homeowners from arbitrary covenant enforcement, rigged elections, unfair dues increases and other activities that generate tons of complaints.
It’s a big issue because an estimated 1.6 million live in 12,000 neighborhood associations – townhome, condominium and timeshare – in Colorado.
Consider these nationwide statistics about HOAs from the Community Associations Institute:
========================================================================================= Estimates for the number of association-governed communities and individual housing units and residents within those communities:
Year Communities Housing Units Residents
1970 10,000 701,000 2.1 million
1980 36,000 3.6 million 9.6 million
1990 130,000 11.6 million 29.6 million
2000 222,500 17.8 million 45.2 million
2002 240,000 19.2 million 48.0 million
2004 260,000 20.8 million 51.8 million
2006 286,000 23.1 million 57.0 million
2008 300,800 24.1 million 59.5 million
Association-governed communities include homeowners associations, condominiums, cooperatives and other planned communities. Homeowners associations and other planned communities currently account for 52-55% of the totals above, condominiums for 38-42% and cooperatives for 5-7%.
· Estimated number of community association managers: 60,000.
· Estimated number of management companies: 10,000.
· More than 1.7 million people serve on community association governing boards. Another 400,000 serve as committee members.
· Since 2000, nearly 4 out 5 housing starts have been in association-governed communities, including condos converted from rental units.
· The value of the homes in community associations is estimated at $4 trillion, or about 20 percent of the value of all U.S. residential real estate.
· Estimated annual operating revenue for U.S. community associations is more than $41 billion. Community and condominium association boards also maintain investment accounts of more than $35 billion for the long-term maintenance and replacement of common property, e.g., roads, swimming pools, structures and elevators.
So you can see why some states are getting serious about HOA regulation.
One of the pioneers is Nevada. where lawmakers created an ombudsman office in 1997, and later expanded it and created a five-member commission to give that state’s HOA residents a place to appeal for help.
And check out the commission’s Web site.
In 2004, Florida joined Nevada by creating an ombudsman for community associations. Virginia, New Jersey, California also have debated creating HOA oversight agencies.
The CAI opposes state HOA oversight. The group believes the government should not interfere in HOAs, which are voluntary, private associations governed by their members. People who don’t like them can get elected to the governing boards or move away from them.
But other groups argue a government agency is needed to protect the interests of homeowners.