The current rhetoric heard on Capitol Hill is power to the people. However, since 1960 when builders petitioned Congress for federal backing of high density housing, Congress has failed its constituents. This failure is two-fold in nature: 1)non-protecting the constitutional rights of homeowners living in common interest developments and 2) failing to limit the powers of the systems under which they are governed.
On of every eight Americans now lives in a common interest development (CID) such as condominiums, cooperatives and single family homes' homeowners associations. In fact, CIDs are the fastest growing segment of new housing within the United States. Within five years, it has been estimated that 25 to 30 percent of Americans will find shelter under some form of CID association. These very Americans may also find their constitutional rights are in jeopardy.
Professor McKenzie's definitive work sounds an alarm for homeowners as he evaluates the explosive national, legal and social consequences of the rise of CIDs. The author traces the origins of these special types of communities from feudal Germany through Victorian England where Ebenezer Howard promulgated his utopian dream of planned cities. If the name Ebenezer brings Scrooge's greed to mind, good! For it wasn't idealism but rather an enormous profitability for developers and builders that was , and continues to be, the driving force behind the explosion of CID housing in the U.S. Dr. McKenzie demonstrates how CIDs with their restrictive covenants and isolationist intent, have been flawed from the beginning.
In the early sixties with land prices rising and the population booming, the real estate industry promoted common interest housing for the middle class. The Federal Housing Administration endorsed this growth by providing developers detailed guidelines to qualify them for federal mortgage insurance. Local governments embraced the increasing tax base. The die was cast with scant public debate. In 1964 there were less than 500 CIDs nationwide; six years later, 10,000; and today, over 150,000 governing over 32 million Americans. This change resulted in millions of homeowners essentially losing control of their property.
In a country founded in individual liberty, restrictive covenants presage conflict. In a country here property ownership has been synonymous with freedom, individuality and autonomy, CID homeowners no longer retain control of their property rights. In Pennsylvania, a homeowner was taken to court by his homeowners association because he erected a fence to protect his young son from falling off the 400 foot cliff on the edge of his lot. Veterans are denied the right to fly the American flag; homeowners are prevented from displaying Christmas lights; neighbor's notices are censored; newspaper publishers are denied delivery access. Rules, ostensibly to protect property values, come first... people last!
Add to this unbalanced equation, a system of governance which relies on a volunteer board o directors, composed of neighbors, with little experience in running a corporation; charge them with running each other's lives and support them with "aggressive, legalistic managerialism." The combination, can bring out the worst in human nature. The system's inherent contradictions often foster resentment and non-participation both within and without the community and/or ignite controversy and litigation.
Due process is not what is available in an association "hearing" where the board of directors invariably acts as "judge, jury and executioner," where management controls access to the evidence, and where the homeowner's fees pays for the attorney against him.
Maryland law states that all homeowners are entitled to see all records of their association In spite of that law, a homeowner in Montgomery County had to go to court in order to actually obtain the records. Not infrequently, the laws are ignored and violated with impunity. Furthermore, most homeowners are intimidated or lack the financial resources to go to court for due process. In concordance, homeowner involvement is discouraged, and homeowners are viewed as a necessary nuisance.
Privitopia exposes the legal fiction that buyers voluntarily choose CID housing or even understand its implications. In fact, price, location and limited personal options are increasingly restricting choices. Already in some areas, most new homes are association homes. For instance in Montgomery County, Maryland, it is estimated that one-third of the population now resides in CIDs.
Most Americans do not understand the intricacies of CID ownership. McKenzie persuasively argues that many are mislead by the "rhetoric of village democracy" and the governmental functions such as security, street and light maintenance, and trash collection that are being provided privately. Imagine that the number of private security guards in the U.S. now exceeds the number of police officers.
It is not only the homeowner who is grappling with the implications. Courts around the country are being asked to determine whether homeowners associations should be viewed by the law as governments, private businesses or non profit enterprises. A business would have tort liability; a government would be restrained by constitutional limitations. Due in large part to members of the trade association, Community Association Institutes, CIDs enjoy a special unregulated status and benefit from a double standard…sometimes a corporation, sometimes a "quasi-government." But the real profits are reaped by the business professionals who provide CID services. There is little accountability to the homeowner who shoulders the burdens.
The professionals involved in building and servicing CIDs and their paid lobbyists have shaped legislation and judicial policy making, preventing meaningful regulation, and so far, subdued public discourse. It may be true as political scientist, Dennis Judd, asserts that public policy follows the activities of entrepreneurs, but congressional action is being long overdue. Privitopia should be required reading for every elected official. Every CID homeowner should make room on the reference shelf for this important scholarly expose.
It is time for an open, informed national forum. If 32 million Americans are losing their constitutional rights, it is time for the public debate to begin…loud and long! Thank you, Evan McKenzie for caring about the American dream.