Arnold Kling  

The Theory of Consent

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Bart Hinkle poses an issue.


Last week a Chesterfield circuit court ruled Romito has no obligation to pay dues to the homeowners' association in the tony Bexley neighborhood. Romito bought his property two decades ago, when membership in the association was voluntary. Last year the Bexley Association made membership and dues mandatory. To force Romito to pay dues now, ruled Judge Herbert C. Gill, would be "simply unjust."

Thanks to Don Boudreaux for the pointer.

I would not necessarily support the judge's ruling in all cases. Suppose that my neighborhood could obtain street repair and trash collection services at lower cost than is provided by the county. My neighbors would like to collect dues to pay for those services and have our taxes reduced accordingly. Assume that the neighborhood association now will arrange for trash collection at my house and also maintain our streets, and assume that the County will reduce my taxes. Should I have the right to opt out of paying dues to the neighborhood? What if I voted against the neighborhood's decision?

I do not think that there is a perfect solution here. However, my idea of competitive government is to try to minimize the cost of exit. For that reason, I would like to see neighborhood associations allowed to opt out of county services. If I am fed up with my neighborhood association, it is easier for me to move to a nearby neighborhood than it is for me to move to a different county to escape bad county government. The larger the territory controlled by the government, the harder it is to use exit. To me, that argues for minimizing the power of larger governmental units.


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CATEGORIES: Political Economy



COMMENTS (7 to date)
Phil writes:

Why not have competing neighborhood associations, even in the same neighborhood? Or are the required decision so local that it wouldn't work to be in a different association than your neighbor?

I suppose if one NA decided that all garages have to be painted brown, and another decided they all have to be painted white, there's no way to make *anyone* happy.

siredge writes:

Agree with Phil. I don't think neighborhood associations should be able to compel anyone to join them. And you might feel that moving isn't a big deal, but for many of us, it is a very big deal, especially someone that has lived in the home for 20 years, like the gentleman from the lawsuit.

Philo writes:

"To me, that argues for minimizing the power of larger governmental units." Hearing you express this view, most people would not realize that you also wanted to *increase* the power of *smaller* governmental units.

Pandaemoni writes:

I must disagree with the notion that I should be forced into compliance with a local homeowners' association, when I have not otherwise agreed in advance to be bound by their rules.

My experience with homeowners associations is that they often lack due process (or at least impartial due process) and make decisions on which rules to enforce and how those rules are interpreted in an arbitrary and capricious manner. The same may be (and often is) true of governmental decisions, but generally the systems are better designed to prevent such abuses.

I have never been frustrated with local politics to the degree that I have been with the politics of the petty dictators I have seen dealt with in homeowners' associations. My personal experience includes their doing things like awarding contracts for neighborhood services to companies the president of the association had a financial stake in (and then I was harrassed and fined because I had the nerve to complain about the conflict of interest).

In my case, I have to blame myself. I had agreed to be bound by those associations' rules, and I should have investigated them further before moving in. I probably should have had a lawyer read the association rules and bylaws and analyze them for potential issues.

If I were in a situation where membership was voluntary, and they tried to make it mandatory by simply voting to make it so, then no way. The homeowners' association always has the option of paying me to leaveā€”of buying me out. Once they own my property, *they* can resell it to a new buyer with the requirement that he or she be bound by their rules. (They can, of course, also pay me simply to secure my agreement to abide by their rules, if they wish.)

If it is not worth it for them to buy me out or buy my assent, then I question whether the value added by their newly mandatory rules is worth the personal cost to me of forcing me into compliance or of foisting the cost of moving onto my shoulders.

Ryan writes:

Phil and Siredge,

The association is there to define property rights between neighbors. For example, some people want to paint their house bright pink, and some people want to live in a neighborhood where there are no bright pink houses. If you're in the latter group, you buy a house in an association prohibiting bright the color pink.

Allowing future owners to opt out of the association or choose another association upsets the expectations of those owners that bought into the development expecting to live in a pink-free neighborhood.

Mike writes:

I was the president of a small HOA. It was mandatory membership and was part of the deal when we all bought our homes. Got the post because no one else wanted to take on the task. If the other homeowners had been paying attention while we had neighborhood parties, I would have never been allowed near the post.

I was the only person in the neighborhood to actually read the by laws. I used a parliamentary procedure to kill the Architectural Control Committee.

I was quite pleased with myself.

We've since moved away but go back to visit once in awhile. No one has yet painted their house pink. But I really would love to see it happen.

Andrew writes:

Hi Mike
Would be interested in the parliamentary procedure you used to kill the Architectural C'ttee.

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