New Orleans        There was a startling AP story by Michelle Conlin and Tamara Lush that thudded on my porch a couple of days ago that opened my eyes to another dimension of the foreclosure fiasco that continues to seep the country:  the finances of homeowners’ associations.
I can remember taking a look at these things when they first started to ramp up decades ago when I still loved in Arkansas.  I thought then there might be some confluence between what we did in community organizing and what they wanted to in a smaller footprint.  I could imagine us offering training, helping organize, and so forth.  One thing and another, and perhaps another good idea bit the dust, or perhaps having it fall off the list was a good thing…who knows now.

One thing is clear.  These things have gotten huge!   The article documents this well:

“…one in five US homeowners is subject to the will of the homeowners’ association, whose boards oversee 24.4 million homes.  More than 80 percent of newly constructed homes in the US are in association communities.  And of the nation’s 300,000 homeowners’ associations more than 50 percent now face ‘serious financial problems,’ according to a September survey by the Community Association Institute.  An October survey found that 65 percent of homeowners associations have delinquency rates higher than 5 percent, up from 19 percent of associations in 2005.”

Damn!  This is the equivalent of a private government where god knows what might happen.

It isn’t hard to understand why their feet are pinched.  As banks foreclose on mortgages and people walk away, the association would be trying to service the same units and common space with fewer fees, so something is going to give.  Where foreclosures used to be rare and based on more extraordinary problems, it’s off the chain now.  The AP cites a Houston area number where association triggered foreclosures have gone from 500 in 1995 to 2200 in 2007 at the beginning of the downturn, and that is only a fraction of what’s shaking in Texas since these were only the ones that went through the courts!

Even falling behind a couple of hundred dollars on fee payments can put a homeowner up against the wall.  One expert referred to the associations’ power as equivalent to a “banana republic.”  Utah and Arizona have pushed legislation to prevent debt collectors from strong arming these often elderly folks from wild fee collection tactics.  If Arizona stepped up, you know it must have been horrendous.  The reporters told a story from Fort Pierce, Florida where homeowners had begun to boycott fee payment to protest against bad management and extravagant expenditures which were leading to special assessments of thousands per year, and for their trouble were being foreclosed.

Maybe we should have been organizing in these communities after all to help people hold their associations accountable and help them to work well.  It is a cinch that this is a crisis that has been bubbling  beneath the surface that is boiling over now and needs attention immediately.