HOA Accommodating Owners in Today’s Market
HOA Accommodating Owners in Today’s Market
How much homeowners associations accommodate today’s renters and owners depend on the market. As quoted from the Chicago Tribune it’s like a pendulum swing one way or the other depending on the market and the supply and demand. During the construction boom of the 1990s, developers levied few restrictions so as not to deter prospective buyers but just a decade later as many new associations became established, they tightened the reins on non-owner occupants.
Then came the housing bubble burst of 2008. Many homeowners lost their jobs and their home equity and could no longer pay assessments or mortgages. Looking back we now know that many of them went into foreclosure.
Instead of being foreclosed on many turn to ranting so they bank with certain homeowners associations to loosen the reins on owner/occupied restrictions. Even though property values have gone up across the board many remain depressed and investors are scouting for bargains. Associations may come into play with these investors looking to purchase homes and rent them out. Most associations have restrictions on how many homes or condominiums in a particular building or subdivision can be rented versus owner occupied. Associations have to go back to the drawing board as to what they will allow depending on the current market.
According to attorney James Erwin, “it is very, very common now for associations to want to enforce or institute leasing restrictions of some sort.”
Rentals are really neither good nor bad and it depends on the Association, the market and the area. Having too many rentals in one particular area may bring down the housing prices across the board and the stigma is that renters will not care for their homes as well as owners. However, renters also keep units and homes from becoming vacant which can be left unheated, unwatched and susceptible to pipe breakage and vandalism.
Overall it’s better to have investors pay for specific assessments as an alternative for the building to stay healthy to allow occupied tenant. Having too many vacant were rented properties per unit or subdivision can play a factor on the value of everyone’s property. It truly is a fine line that associations, owners and renters all need to walk in order to create the best environment for all residents. Several condo owners in this article state that, “not allowing rentals in an association can be more damaging than allowing them.”
When considering investments, rentals or future association expects to find a healthy balance of all three. Property values will continue to increase and the health of the neighborhood, subdivision or complex will be well cared for.
