A.A. from San Diego, California writes:
Dear Mister Condo,
Why are HOA’s favoring Investors over homeowners? When I have tried to broach related situations with the Board, the assigned complex manager (who acts autonomously) tersely splits hairs, exclaiming Investors ARE homeowners. It makes no difference to her how I have tried to form a label to differentiate the two and present the incredulous Selective Enforcement happening daily. The point being, we are now over 60% rentals, of our 143 units (a majority of which are townhouses, with one section being a cluster of apartment-style flats). The Investors are now heavily remodeling (thus destroying the continuity of) the townhomes to create additional bedrooms in order to shove as many tenants in each unit as possible so as to retain a healthy ROI. In some cases, we are talking about a 2-bedroom transformed into a 3-4 bedroom by walling up the living room and family room, thus allowing 5 occupants. BTW, there are no architectural restrictions for interior modifications here. Naysayers are contending they are doing so to create rental “affordability” which I find ludicrous & gaslighting. Renters are given our guest parking. In my case, I, as an owner must pay to have my car off-site. When requesting a permit for a guest parking space, I was promptly denied without explanation. Frustrating, but not the first instance of owner discrimination I have faced in my short ownership.This Investor purchase trend has been increasing throughout HOA communities and I suspect why: legitimate home dwellers care for our communities and feel obligated to be housekeepers and clean up tenant messes. In our case, we are practically forced to do so, without complaint and without violation summons presented to the Investor/landlords, much less being discouraged from talking directly to the tenants. The burning question(s): Are HOA’s getting kickbacks from these investment purchases? Is that why they (and management) seem to have a love affair with them & their (often abusive) tenants? Thank you!
Mister Condo replies:
A.A., I am sorry for your poor HOA living experience. I am sure that your HOA is not alone in experiencing a high volume of investor owned homes. In fact, without having specific rental caps in place, any HOA or condo could find itself in a similar situation. The rules that would help would be to limit the number of occupants per unit and a stricter definition of who a “guest” is versus an additional resident. While I doubt that the HOA is getting a “kickback” for selling to investors, the developer of a condominium or HOA has one goal: to sell the homes or units as quickly as possible and to make as much money as possible doing so. If investors are willing to pay good money for these homes, the developer would be eager to sell as many units to them as possible. In an area where demand is high for rentals, investors are eager to invest their money where it will bring the best return. This is simple supply and demand economics. As an owner who plans on occupying your own unit, you might want to look around at other communities in your area that are more favorable to owners and less favorable to renters. These would be older communities that have low rental rates. They exist but you have to look for them. Other than that, the rental trend will continue as long as the demand remains high. Good luck!