Florida’s unscrupulous HOAs contribute to high housing costs
A year ago, the headline above a Miami Herald editorial posed a provocative question – “Is America’s worst homeowners’ association in Miami? – and then answered: “It’s starting to look that way.”
The editorial was a follow-up to a series of Herald reports on what authorities had found once they were finally able to peel back the curtain and document years of criminal activity in Miami-Dade’s Hammocks Community Association.
The Hammocks HOA’s board members had been able to continue their “gangster-style wrongdoing” year after year because there was a total lack of transparency. Board meetings were held in secret. Maintenance fees soared without any explanation. The list goes on. The community’s 18,000 residents were the victims.
When reports about the Hammocks scandal began to circulate statewide, residents of HOA-run communities in other parts of Florida started to ask, “What about us?” It turns out many other communities were plagued by various kinds of problems with their HOAs.
These disclosures led the 2023 legislative session to pass a comprehensive bill dubbed a Homeowners Association Bill of Rights. It took effect last Oct. 1 and addressed many problems exposed in the Hammocks scandal.
In 2023, lawmakers also enacted several other bills that attempted to address specific issues ranging from the use of golf carts to HOAs’ use of drones to see if items were being stored out of sight in homeowners’ backyards. (If you’re curious, the laws governing HOAs are codified in Florida Statutes, Chapter 720.)
With time running out in the current legislative session, a bill pending as of this writing would give the Florida Department of Business and Professional Regulation more enforcement power over HOAs.
Millions of Floridians reside in communities that have HOAs. Virtually all of the state’s newer housing is in such communities, so families looking to buy a home may well discover that it’s almost impossible to avoid HOA communities.
Therefore, the state has a solemn obligation to continue its push to protect the residents of these communities. In a sense, then, it’s fortuitous that the Hammocks scandal brought attention to the problems and prompted the legislature to act.
On the other hand, what hasn’t received sufficient attention is the role HOAs play in inflating the cost of housing. HOA dues may seem a relatively minor expense compared with contributing factors such as home prices, homeowners’ insurance, property taxes and interest rates.
However, in many HOA neighborhoods, families struggling to make ends meet are paying big bucks for the unwanted amenities associated with a country club lifestyle.
Moreover, the city governments in the suburban municipalities where most of the residents reside in HOA communities have discovered that they can hand off to the HOA various duties that cities ordinarily perform.
These may include maintaining sidewalks and other infrastructure, operating parks, swimming pools, clubhouses, and other recreation facilities, attending to code enforcement and some zoning matters, and — especially in the numerous gated communities — providing a degree of public safety and security.
One might think that, relieved of these responsibilities, the cities could reduce their property taxes, but most do not. Instead, they have too often invested the money they save into padding the pay and pensions for those city employees — especially the cops and firefighters — whose unions’ endorsements help the city officials win the low-turnout elections that are sadly typical for most municipalities.
When HOA dues and cities’ property taxes are piled atop the property taxes levied by the county, the school district, the water management district, and even the inland navigation district in some counties, it adds to housing cost increases that are driven by increased demand and insufficient supply.
Now that the Legislature has attempted to clean up the HOAs, it’s time to take a look at the fiscal practices of all these municipalities whose spending adds to the already high cost of housing.