When my wife and I bought a newly constructed house in Green Valley 15 years ago, we had never before lived in a homeowners’ association (HOA). I thought it nice that we could work with neighbors to maintain our common areas and didn’t think about all the rules in the CC&Rs.

Then the board added 10 more rules and subsequently fined a resident for having oatmeal-colored sunscreens rather than the required black ones. When the neighbor refused to pay the fine, the board began discussion of legal action. I and a friend ran for the board to stop the nonsense. After we won and rescinded the fine and sunscreen rule, we were verbally harassed at every board meeting thereafter and I was called a liar numerous times in emails circulated around the neighborhood. Being vilified by people I had considered friends resulted in our selling the house and moving.

Before buying another house, I checked on the reputation of the HOA in an older neighborhood. I was told by a board member that everyone got along and that the board was not aggressive. So we bought a house there. Then last year, the board changed the colors required on downspouts and other house features and pressured everyone to repaint those features as well as their garage doors. The reason given was preservation of property values. I would like to meet the person who bought a house based on the color of the neighbor’s sunscreens, downspouts or garage doors.

Curious as to whether HOAs actually affect home prices, I looked up studies by housing economists to see if any had researched the issue. I found a few conflicting studies on the relation of house sales prices to HOAs but none that properly accounted for the change in prices from previous sales correcting for other factors that could affect changes in prices.

So I examined the recent sales of a sample of 900 homes where data were available and calculated the change in prices from previous sales in urban counties of three states, including Pima County. When I calculated the average percent return on investment (APR) and corrected for inflation and home characteristics (acreage, square footage, etc.), I found that the median APR was significantly lower in HOA neighborhoods than in others in most years, particularly if the house was bought in the 1990s or after the Great Recession.  

The data show that HOAs are not protecting home price appreciation and they may be reducing it. My guess is that word is getting around that neighborhood squabbles regarding HOA rules are common and many people are not buying in HOA neighborhoods for that reason. My study was peer reviewed and published at http://www.housing-critical.com/home-page-1/ online. To download the report, click on the title “Correlation of Homeowners Associations and Inferior Property Value Appreciation.”

As a community largely populated by people living in HOAs, Green Valley could be a leader in purging its CC&Rs of rules that cause community discord. Some of them are a joke. In our first neighborhood here, the CC&Rs imposed by the builder were an obvious cut and paste job from another neighborhood. The specified house colors in the CC&Rs were not the same as those the builder offered at the time of construction. Apparently no one had noticed until I pointed it out. What’s in your CC&Rs?

Leon S. Robertson is a retired research scientist from Yale University.

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