Tuesday, March 18, 2014

Why Community Associations Work

- - The number of association-governed communities in the United States has increased from just 10,000 in 1970 to 325,000 today. 

Four primary reasons drive this continued growth:

         The Value of Collective Management. Americans have largely accepted the collective management structure of community association living. The private covenants and rules characteristic of associations are not novel in residential living, whether rental or ownership. Similar restrictions often exist in rental apartment lease agreements and in zoning laws and building codes that govern more traditional single-family, detached housing.

         Privatizing Public Functions. Local jurisdictions often require builders and developers to create community associations as a requisite to new housing construction. Because of the fiscal challenges faced by many municipalities, associations are created with the stipulation that they will assume many responsibilities that traditionally belonged to municipalities, including road maintenance, utilities, trash pickup and storm water management. Privatization allows local jurisdictions to approve the development of needed housing without having to increase taxes to pay for additional infrastructure. 

         Expanding Affordable Homeownership. Almost from their inception in the 1960s, condominiums have tended to serve as lower-cost housing, especially for first-time buyers. This was especially true of early condominium conversions, in which apartment buildings are refurbished into condominiums. Making housing affordable for greater numbers of Americans has been a consistent goal of federal, state and local governments for decades. Without the efficiencies inherent in association development and operation, affordability would be an even greater challenge.

         Minimizing Social Costs and Fostering Market Efficiencies. Community associations not only maintain home values, but also reduce the need for government oversight. Associations promote shared responsibility through contractual membership, collective management, mandatory covenants and agreements between the association and homeowners. Put simply, community associations are an efficient way to provide services, assign payment responsibility and be responsive to homeowner concerns and priorities.

Information from the Community Associations Institute (www.caionline.org):

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