The Rise of the Homeowner Association

by HOATOWN.com THE RISE OF THE HOMEOWYER НОМЕОУ SOLD ĀSSOCIATION SOLD With 8,000 new community associations formed yearly and an estimated $35 billion in annual operating revenues, the association-governed community will continue to shape the future of American home ownership. 1 THE EXPLOSION OF HOMEOWNER ASSOCIATIONS Homeowners associations first emerged in the United States in the mid-19th century. Their growth was limited, however, until the 1960s, when several factors led to a period of rapid national growth, including: 1963 1964 1970 1977 The Urban Land Institute publishes TB 50* which was funded by the National Association of Home Builders, the FHA, United States Public Health Service, Office of Civil Defense, the Veterans Administration and the Urban Renewal Administration. The Federal Housing Administration authorizes federal home mortgage Growing scarcity of land for suburban develop- ment resulted in escalating land costs, prompt- ing developers to increase the density of homes on the land. In order to do this while still retaining a suburban look, they clustered homes around green open areas maintained by asso- ciations. These associations provided services that formerly had been provided by municipal agencies funded by property taxes; yet, the residents were still required to pay those taxes.** Another primary driver in the proliferation of single family homeowners' associa- tions was the U.S. Clean Water Act of 1977, which required all new real estate developments to detain storm water so that flow to adjoining properties was no greater than the pre-development runoff. insurance for condomini- ums or for homes in subdivi- sions where there was a qualifying homeowner association. Technical Bulletin 50 (TB50), also know as The Homes Association Handbook, is a 1964 study that classified associations in several ways and found that 470 subdivisions, at that time, were reported to contain common property maintained by some type of home-owners association. ** Accordingly, local governments began promoting subdivision development as a means of improving their cash flow. 2 TOTAL RESIDENTS UNDER HOA GOVERNANCE Estimated number of U.S. association-governed communities and individual housing units and residents within those communities. 70 mil 60 mil 50 mil 40 mil 30 mil 20 mil U.S. Residents 10 mil O Housing Units 1970 1980 1990 2000 2002 2004 2006 2008 2009 2010 HOA Community Growth by Decade Association-governed Communities 300,800 305,400 309,600 286,000 1970's. .260% 1980's.. .261% 1990's.. .71% 2000's.. .39% 260,000 240,000 222,500 130,000 36,000 10,000 1970 1980 1990 2000 2002 2004 2006 2008 2009 2010 3 TYPES OF COMMUNITIES GOVERNED BY ASSOCIATIONS Association-governed communities include -homeowners associations, condominiums, cooperatives and other planned communities. 7% НОA 's 40% 53% Condominiums Cooperatives* *A housing cooperative is a legal mechanism for ownership of housing where residents either own shares (share capital co-op) reflecting their equity in the cooperative's real estate, or have membership and occupancy rights in a not-for-profit cooperative (non-share capital co-op), and they underwrite their housing through paying subscriptions or rent. 4 HOMEOWNER ASSOCIATIONS BY THE NUMBER$ $2 trillion: The estimated real estate value of the homes in all community associations, which is approximately 15% of the total value of all U.S. real estate* $2,000,000,000,000 बी के * The total estimated value of all U.S. real estate is $13 trillion = $1 trillion 5 WHAT DO HOMEOWNERS THINK OF THEIR HOA? 90 percent of respondents say they are on friendly terms with association board members. 78 percent of respondents say their association rules and regulations enhance their property values. YES YES ON FRIENDLY 9 TERMS WITH THE BOARD ENHANCED PROPERTY VALUE 6 IT'S ALL ABOUT THE MEETING community association annual meetings association committee association board meetings meetings 310,000 1,000,000 = 100,000 Meetings/Year 2,500,000 7 WHO'S ON THE BOARD? Out of the estimated 62 million Americans that live in association-governed communities, some 1.75 million people serve on community association boards, with another 350,000 volunteering as committee members. of Sources: http://en.wikipedia.org/wiki/Homeowner association http://realestate.findlaw.com/ http://www.caionline.org/ http://www.plannersweb.com/wfiles/w126.html http://newurbannetwork.com/ http://www.epa.gov/smartgrowth/pdf/market acceptance pdí HOATOWN Instant Community Websites Please visit www.HOATown.com Designed by Mitch Moccia ON