There is a huge difference between the way businesses and governments operate. Businesses typically keep their eye on the bottom line and minimize unnecessary expenses. If there is a cost effective way of doing something, they’ll find it and use it. Governments, on the other hand, only seem to care about the size of their departments. The more staff they have, the greater their budgets and the higher their salaries. To help get to that point they rely on regulations, red tape and more staff to oversee useless rules. And the money to pay for all this waste? No worries, just raise taxes. I knew all that so when I first encountered HOAs and was told that certain services were provided “privately” the only thing I found alarming was that the taxes were 3 times as high as they had been where I had come from where everything was included, in fact the HOA assessments were higher than my property taxes had been.
My long held beliefs about the efficiency and cost effectiveness of businesses began to unravel as I watched a “privatized government” at work. These creations of the special interests enjoyed all the benefits of the unaccountable governments while masquerading as efficient businesses. This new model was forced on owners in residential associations, be they condos, co-ops, HOAs or any of the newer concoctions that seem to creep into our daily vocabulary. It embodies all the worst characteristics of both businesses and governments.
Chuck Welsh joins us On The Commons. Chuck, an avid boater, a US Naval Officer for a number of years and a former developer bought a brand new pre-construction condo in a gated development in Florida. The design for the property came complete with plans for a marina. The entire project sounded like it was designed with Chuck in mind. A beautiful unit, amazing views, room for his boat and the promise of a carefree lifestyle with property values soaring through the roof. Isn’t that what we are all promised? Regular listeners and readers of this blog know that when it comes to housing in the US, things are never quite as smooth or problem free as one might expect. Sadly that was the case with Chuck’s ideal condo. All the elements of his dream home were there – in a dream – the problem was that the nightmares started when Chuck woke up. We’ll talk to Chuck about what happened that led to 10 years of his life that was far from “carefree” and his condo – well, even with an upswing in property values, ended up costing him a lot of money, not to mention being dragged through the courts for four years. And that private marina that was the icing on his cake? Well, that didn’t work out so well either. Tune in for all the details as well as a fascinating discussion on the future of privatized residential governments.
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