We can continue to deny the systemic flaws in the nations homeowner associations, we can ignore the problems, make excuses, blame the victims, minimize the issues hoping they will miraculously disappear but at some point, those rose colored glasses are going to have to come off. At some point we will have to stop fooling ourselves into believing that the light at the end of the tunnel is the rising sun and acknowledge that the train wreck is imminent. This shoddily built house of cards is going to come tumbling down.
Tyler Berding joins us On The Commons this week. Tyler is an attorney in California who represents associations. Unlike many of his colleagues, Tyler has been open about the problems with the HOA/condo model and admits that it is not working. He has long been warning us about the problems of multi unit housing, particularly the condo conversions. These buildings start off as rentals and are then sold as condos but as older products they have a shorter remaining life span than a newer building. To compound the tragedy, they are usually sold to people who are least able to afford the special assessments for major repairs and replacements that aren’t far behind. We’ll talk about the problems and try to figure out if there are any answers to the housing dilemma.
Tyler maintains a blog called Condo Issues http://condoissues.blogspot.com . One of the entries is a 2013 report on a survey conducted in California about reserves in HOAs and Condos. Interestingly enough, his survey finds that reserves are about 50% funded. However, CAI released the results of their own survey today announcing that America’s housing is healthy and association reserves are 70% funded. OK folks, you can relax, CAI is on the job!