Many developments in the Phoenix area that came online after the boom have not reached buildout, and/or have had to deal with a large number of foreclosures. It was assumed that when the homeowners took over the associations from the developers that these neighborhoods would have occupancy rates of near 100%. Since that hasn’t happened, assessments that were meant to be divided among many are now being divided among the few, and this can be pricey: [Thanks L!]
Owners of homes in the half-built San Tan Heights development in Pinal County are staring at a special assessment of $750 per home in addition to the monthly assessment of $125.
Why the big charge? While the HOA was under the control of master developer Miller Holdings, home builders fell behind in dues payments by $600,000. In addition, former and current homeowners owe the association over $1 million. To pay bills and keep vital services for existing (and bill-paying) homeowners, the new homeowner-controlled HOA managers decided the additional assessment was the only way to stay out of bankruptcy.
During Arizona’s long boom in home building, laws governing HOAs have evolved strongly in favor of the big developers and the communities in which the developments are going up. Not much thought was given to the fate of the lonely, few homeowners who might have to foot enormous bills if the planned development failed to fill up.
If that sounds tough, how about these condo owners?
A condominium development in Goodyear that was to include 144 units produced just 27. That handful of condo owners now must find a way to clean up leftover construction mess, tend to the common areas of a development planned for six times as many residents and fend off angry creditors. And, oh yes, keep their own water and power from being shut off.
I wonder how many residents, already discouraged with falling home values, just give up and walk away- making things that much tougher for homeowners left behind.
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cascading crash
I wonder how many residents, already discouraged with falling home values, just give up and walk away- making things that much tougher for homeowners left behind.
You aren’t going to have to wonder much longer. For three generations we have seen constant outward expansion of the suburbs – we are now seeing contraction. Permanent contraction.
Really I do object to the anti-spam word, it’s not cute. Get someone else to do your web site.
45 (I’m a degree south of that) -
Igor does get rambunctious every once in a while, so maybe it’s time to prune the list again.
Twist (and Mr. Twist) were first up warning of the emerging trend toward “Vacantvilles” years ago, and months before Janet Yellen sounded the alarm on the subject.
Well,
special assessments are only a one-time affair, so it’s not like the fees are going up 6 fold in reality.
For example, the place I used to live in needed to pull up trees in the common areas and required $500 special assessment from everyone.
Chuck
I personally view HOAs generally as a very weak attempt at forming an actual neighborhood that means something. They only seem to exist in suburbs that are largely disconnected to the real world. And want to preserve that status.