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Tuesday, October 31, 2006

 

How did HOAs get so powerful?

My mom recently received a letter from our Home Owners Association (HOA). It was a copy of a letter sent to our next door neighbors informing them that their two donkeys, which they have had for seven years, are not allowed by the HOA except by a special variance. However, our neighbors were also informed that applying for a variance would essentially be a waste of time because six of the eight board members were already disinclined to grant their request. So, basically my neighbors were told they had thirty days to get rid of their donkeys.

The donkeys are really cute. They look like the donkey from Shrek. Our neighbors rescued them seven years ago from an abusive home and they are afraid that the trauma of uprooting them will make it so they have to be put down. Our neighbors are going to fight the HOA and my mom and I have agreed to help in any way we can. But the whole situation got me thinking about Olson and what he would say about HOAs.I wondered how the HOA could become so powerful. I naively thought that HOAs were only concerned about the color of your house and if you left your trash cans out on the curb too long. How could my HOA tell our neighbors that they can’t have their donkeys when the area is zoned for horses? The HOA even said in their letter that just because donkeys were a member of the horse family it did not mean they were allowed just as wolves would not be allowed just because they are a member of the dog family.

The fact that the HOA has done nothing for seven years means something has changed. So, considering Olson I looked for a “bootlegger” and a “Baptist”. It turns out that our neighbors have had a feud going with our neighbors across the street. And it just so happens that our neighbor across the street is on the HOA board. And suddenly everything made sense. Our neighbor across the street was the “bootlegger” using the “Baptists” of the HOA to promote his own agenda. The “Baptists” in the HOA are concerned with falling property values. By their rationale if they let our neighbors keep their donkeys then what will stop other people from wanting to keep pigs, goats, etc. – animals that would detract from the enjoyment of the neighborhood and ultimately decrease property values?

However, none of this was an issue before the bootlegger was able to get the Baptists on his side. The members of the HOA are not a very large group but they are very latent. I doubt many of them even read the association bylaws let alone attend meetings and vote for the association officials. Since they are not very active in the association they are rationally ignorant about what the association is up to. This is slightly different from what Olson describes as a rationally ignorant voter because a member of the association could, if they so desired, influence the outcome of a vote (especially since so few members actually vote). However, because the cost of informed action to an individual member is likely more than the benefit they will receive, they are rationally ignorant.

For example, lawyers had to be hired to draft the letter to my neighbors. I’m sure many members of the HOA (including my mom) would rather see that money go to improving the park or some other productive venture. However, by not taking an active role in the HOA the neighbors are basically writing a blank check to those who do take an active role, like my neighbor the bootlegger. Having read Olson this is what I expect to happen. But, I still feel sorry for my neighbors and their two little donkeys. The abuse of power is just wrong whether it is by a bootlegger in an HOA or a roving bandit in destitute country.

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