I do not love the idea of the government invalidating private contracts like this.
HOA’s are a very good example of private contract rent seeking. You have to sign the contract to move into the house, and a lot of houses come with similar contracts. So the opportunity cost of not signing is Large.
And then the local HOA can enforce whatever petty tyranny it feels like.
In theory, this should lead to houses without HOA’s being more valuable, and so HOA’s being removed or at least not created. But for whatever reason, the housing market is too dysfunctional to do this.
As I understand it, in many cases HOAs existing are a condition of housing getting built at all. They’re (in some cases) the way in which builders prove their planned development will not be a drain on town resources, because they’ll provide for their own water and trash and road maintenance needs.
I do wonder when, where, how, and why they morph into the kind of super-restrictive and intrusive HOAs that I would never want to live under, though, versus the ones that don’t do this.
HOA’s are a very good example of private contract rent seeking. You have to sign the contract to move into the house, and a lot of houses come with similar contracts. So the opportunity cost of not signing is Large.
And then the local HOA can enforce whatever petty tyranny it feels like.
In theory, this should lead to houses without HOA’s being more valuable, and so HOA’s being removed or at least not created. But for whatever reason, the housing market is too dysfunctional to do this.
As I understand it, in many cases HOAs existing are a condition of housing getting built at all. They’re (in some cases) the way in which builders prove their planned development will not be a drain on town resources, because they’ll provide for their own water and trash and road maintenance needs.
I do wonder when, where, how, and why they morph into the kind of super-restrictive and intrusive HOAs that I would never want to live under, though, versus the ones that don’t do this.