Report: State spurred gated developments

     "Developers have a financial incentive to set association fees on the low side — they want to sell lots to builders and homeowners. High association fees might scare off potential buyers. Also, developers may believe the fees do not need to be high in the beginning because maintenance costs in a new community should be fairly low... It could leave a new association in the hole as it gets started, and struggling to raise artificially low association fees. Usually association fees are set by a vote of all community homeowners. Residents planning to stay in the community for a limited time do not see the need to pay more."

 This rare report from a public agency makes clear what many of us have written about for years: that community associations are often created more for the benefit of municipalities (tax dollars) and developers than for the eventual owners. There is an incentive to underfund the operation and reserves of the new association to keep assessments low and facilitate sales.

Thanks to Evan McKenzie and Fred Pilot for this post.

Report: State spurred gated developments PoconoRecord.com