The Community Next: Public Policy Paradigms
Panel included CAI members and
nonmembers. Stakeholder groups were
represented by an academic, an insurance
professional, a state legislative lobbyist, attorneys,
community association volunteer leaders, community
association managers and state legislators, each
of whom have spent significant time interacting in
the legislative process. The discussion led the group
to identify the prevalence of challenges and opportunities
that community associations have and may
continue to encounter, issues that may be addressed
in the next 15 years, and the impact of relationships
with legislators, regulators, other decision-makers
and stakeholders.
By 2030, at least one-third of all owner-occupied
homes are expected to be located in a community
governed and administered by an association.
A critical shift is expected to occur between
2040 and 2050 whereby the community association
model will become the majority form of housing
in America. As this model continues to grow
and communities continue to age, the challenges
and opportunities identified in this report must be
addressed.
»FOCUS ON PROVIDING A BROAD
RANGE OF BENEFICIAL AND VALUABLE
SERVICES
Community associations are community management
organizations providing three core services—
community, business and governance. In 2014, the
estimated value of homes in associations was $4.95
trillion. As perceptions of community associations
evolve over the next 15 years, focus must be on
the broad range of services performed by associations
and the beneficial value they provide. When
legislative bodies focus solely on the governance
functions of associations, the core community and
business functions that are an essential part of the
complex association model are ignored, leading to
legislative enactments that underserve the community
and business functions. Public policy must preserve
the comprehensive and balanced treatment of
community associations embodied in the uniform
acts, while avoiding random solutions to rare circumstances
that would impair self-governance and
increase operational costs.
»TELL THE TRUE STORY OF
COMMUNITY ASSOCIATIONS
Volunteer leaders and professionals should sharpen
the image of community associations with the
media, government decision-makers and the general
public as polling by the Foundation for Community
Association Research clearly shows. Partnerships
with municipalities should be explored
that recognize the vital responsibilities associations
carry for infrastructure maintenance and repair.
Public policy must reflect the model of community
associations as a provider of a broad range of
services and cultivate the respect, deference and
autonomy for associations that is given to other
business and social organizations.
»EVOLVE AND ADAPT THE ROLE OF
COMMUNITY LEADER
The community association model relies on volunteer
leaders. In 2014, an estimated 2.3 million
board and committee members participated in
their associations, performing 78 million hours of
service at an estimated value of $1.6 billion. To
continue fostering strong, responsive and harmonious
communities:
-Membership on boards and committees must be
more flexible and enable use of professional
(compensated) directors
-Leaders must be trained in governance and
management
-Stakeholders must proactively convey the benefits
of associations to decision-makers
-Disputes within the community
must be resolved amicably through
dispute resolution procedures
»DESIGN WAYS TO REPAIR
AND REPLACE RESERVE
STUDIES
Associations maintain community infrastructure
and building components and systems.
But infrastructure and buildings are aging:
as of 2014, 54 percent was at least 35 years old. Careful
planning for future repair and replacement through reserve studies
and reserve funding is the best physical and fiscal approach to
fostering financial stability of associations.
»DEVELOP RESOURCES TO MEET DEMANDS OF
AGING IN PLACE
There is no doubt that aging residents prefer living in their homes
as long as possible. Currently, approximately 25 million Americans
age 55 or older reside in community associations. Over the
next 15 years, associations must develop the resources to meet
increased demand for services for our older residents while being
sensitive to the fact that many residents are on limited or fixed
incomes. Public policy must consider flexible funding alternatives
such as allowing tax credits for property tax and mortgage interest
deductions that are of little use to many older residents. Further,
the government must redirect funds expended on the nursing side
to motivate older residents to stay in their homes by providing
payments to associations for the services they provide.
»CREATE FLEXIBLE TOOLS FOR AGING
COMMUNITIES
As communities age, particularly in changing metropolitan areas,
their original use may no longer be the best use of land and environmental
resources today. Public policy should provide an effective
and sustainable legal structure that features reasonable procedures
for termination and sale to parties seeking to redevelop the
land, for dissolution of insolvent associations and for conversion
of the form of ownership and organization. Fannie Mae, Freddie
Mac and FHA project standards need to be modified to accommodate
these objectives.
»BE READY TO USE NEW
TECHNOLOGY
Rapidly evolving technology and changing
external conditions present challenges
and opportunities for community
associations, but many associations lack the
tools that are essential to successful adaption.
Public policy should foster flexibility in
procedures for communications, meetings and
voting, decision-making such as amendment approval
procedures, dealing with environmental and energy factors, and
expanding on-line information. Public policy must recognize
that each association is unique and promote flexibility to allow
the development of the most appropriate models at a pace that
makes sense for each community.
»BUILD EFFECTIVE RELATIONSHIPS
Community associations should build effective relationships with
decision-makers—public officials at all levels of government and
regulatory agencies. This begins with training association leaders,
homeowners and professionals. Stakeholders should engage
in proactive communications to inform decision-makers of the
positive aspects and benefits of community associations. Associations
should seek partnerships with research-focused institutions,
such as colleges and universities, to develop objective and
independent data and analyses. Association attorneys should
advocate educational programs for judges and other attorneys to
foster deeper understanding of the community association housing
model.
FINAL THOUGHTS
CAI is uniquely situated as a multidisciplinary industry leader to
promote effective steps to meet the challenges and opportunities
ahead. From the viewpoint of homeowners, associations must be
perceived as helping them achieve an enhanced quality of life as
well as a return on their investment by increasing the property
value of each neighborhood. From the viewpoint of the larger
community and of society itself, associations must be recognized
for lessening the financial burdens of municipalities and for
stewardship of natural resources and energy.