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HOAs may be preserving communities to their death

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Forming homeowners associations (HOAs) has become second nature to developers. But handing a development over to the HOA has often not been quite as easy.

There are many stories of mismanagement and misappropriation once the development is in the hands of the HOA, so many HOAs are so afraid of change, and they preserve their communities to a point of being irrelevant, undervalued and slowly fossilising. Thousands of HOAs have been formed over the past years, so literally hundreds of thousands of households fall within the purview of these volunteer-led organisations. And each one is led by individuals who are often afraid to embrace change, so they fail to remain vigilant of their biggest threat: stagnation. In what may be one of the greatest ironies of the modern era, and in far too many cases, these HOAs and their volunteer boards are guilty of ‘preserving’ their communities to death.

 

 

One of the key challenges is to differentiate between the benefits of preservation and the dangers of stagnation. It is often the case that boards and HOAs feel it necessary to cling to the original vision for the estate without realising that the marketplace, the home owners and their expectations have clearly moved on.

An estate is like any business in that it needs to evolve in order to keep pace with, or stay ahead of, market expectations. All of these factors make it necessary to be prepared to move forward at all levels and especially in terms of strategy, concept and delivery. Yet, most HOA boards believe it’s their solemn duty to mindlessly preserve the original vision of their ageing neighbourhoods.

Over the life cycle of any community, circumstances change. An HOA’s desire to preserve every detail of the original concept makes reasonable sense in the first sales decade, makes less sense in the resale decade, and makes no sense in the third sales cycle and beyond. The latter is a mistake that may lead to consequences that are difficult to turn around, if not recognised in time.

A board must decide what to keep doing, what to do better and – most importantly – what to stop doing.

 

 

What do we need to keep doing?

  • What is working well? Why?
  • Who is essential to making this work? What are they doing?
  • How can we ensure this good practice continues?

 

What do we need to do better?

  • Would this work better with some small changes?
  • What would it take to make those changes?
  • If we were to design this from scratch, what would we do differently?

 

What do we need to stop doing?

  • Is this process necessary?
  • Are we doing this just because we’ve always done this?
  • What would happen if we stopped doing this?
  • What’s preventing us from seizing this opportunity?

 

 

In this continuing and evolutionary process, enhancement, adaptation and reinvestment are essential ingredients to ensure that communities age gracefully while remaining relevant.

Many HOA boards believe they’re protecting property values by ensuring the rigid and unyielding original concept is protected, instead of investigated and improved upon. Unless HOA boards think differently, these communities will grow even less desirable with each passing year, and the spiral of decline will accelerate. This will have a long-term, corrosive effect on property values and damage the interests of the very people the HOA was intended to serve.

But here’s the good news. Older neighbourhoods retain at least one important advantage over newer neighbourhoods. Location! Older neighbourhoods have the opportunity to reinvent themselves and offer stiff competition to newer neighbourhoods. A few bold moves by a visionary HOA board can make an enormous difference in the estate’s future.

 

 

The simplest operational meeting agenda can often bring revolutionary change by simply asking: What is working, and what could be better? So, start the ball rolling.

  • What are the things that work really well, and should not be changed?
  • If we had one free day every week, what new opportunity would we explore?
  • What do we hope to do, but never seem to have time to get to?
  • If we were dropped in here from outer space, what’s the first new thing we would do?

Simple initiatives can trigger a positive spiral of reinvestment, renewal and long-term commitment by existing residents. This in turn will draw new investment from outside the boundaries of a closed environment, and will lead to fresh ideas, pressure to change, and the support to ensure the community becomes more desirable and helps drive higher property values and, of course, an improved lifestyle and experience for all home owners as well.

Francois Schoeman CEO Pecanwood Estate

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Recent comments

3 Comments
  • Douw Raimondo
    Posted at 13:06h, 26 Aug Reply

    This is a very insightful piece and I am experiencing this same phenomenon in my Estate in Bloemfontein (Woodland Hills Wildlife Estate) – Our HOA on the Estate is run by well established Fossils to afraid to adapt our embrace change.

  • Pieter de Haas
    Posted at 15:29h, 26 Aug Reply

    We should look at a new model in place of the Director orientated HOA model involving the residents in the form of participation planning via formal Committe structures for the lack of a better word – improvement in transparency and strategic thinking👍👀

  • Dave Christie
    Posted at 17:37h, 26 Aug Reply

    Great article. Fully agree.

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