Low-Road Capitalism 4: Home Owners Association Fees and Fines Consumer Edition

LewisBraham

John Oliver has a good funny video piece on this HOA subject this week. I wonder if anyone has tried to handicap the value of houses with HOA fees and fines, given how 82% of new homes sold now are part of HOAs and how terrible and corrupt many of them are? What sort of discount should be applied to a home with an HOA versus one without? The thing is, this is low-road capitalism of the sort like hospital bills consumers can't anticipate before getting out of the hospital because costs aren't disclosed beforehand. It's the same with HOAs and their unique aggressive rules and the fines. You might know the standard HOA membership bill in advance of purchase, but not the fines for absurd infractions, which are really a money-making scheme for private HOA management companies. This again, has nothing to do with thinking houses should be government owned or "socialist," but just square dealing within our capitalist system, treating consumers, labor, communities and our environment with integrity and respect while still making a profit. Here's John Oliver's HOA video:

catch22

Thanks Lewis. We watched this show Sunday. A decent knowledge program for the unknowing of how these 'organizations' function or NOT. Housing 'police states'. Pretty sad commentary about the American society. Would surely keep us away from wanting to buy a house with a HOA operation. Some of these were okay organizations in the 90's, per friends who purchased then. Gives quasi normal folks (the boards) a power rush they can't find elsewhere.

LewisBraham

I think if I were comparing and trying to value two houses to potentially purchase, one with an HOA and one without, I would subtract at least an extra 10% discount to my valuation estimate of the HOA one and call it the "BS Factor Discount."