HOAs and rental homes (06-24-2025--Hour3)

What's going on. Thank you so much for listening to this podcast. It is heard live every day from noon to three on WBT Radio in Charlotte. And if you want exclusive content like invitations to events, the weekly live stream, my daily show prep with all the links, become a patron, go to vpeteclendershow dot com. Make sure you hit the subscribe button. Get every episode for free right to your smartphone or tablet. And again, thank you so much for your support. End of the last hour, talking about the legislation moving through the General Assembly of North Carolina looking to rein in some of the practices that have turned abusive by some hoas and management companies. This ties into the next topic here, Institutional investors are not the villains of America's housing market. It's a piece by Caleb Pettitt at National Review. Okay, before I read the highlights of this piece, I got a message here from Cindy. It's a peak tweet and Cindy says the job of the HOA is to help maintain property values by upholding the laws and buy laws of property management. I completely agree that is what hoas are supposed to do. That's why you have the HOA is to keep the guy from putting seventeen broken down vehicles on his front lawn and driving down property values for all of the neighbors. Right. That's That's the classic example of why hoas exist. And I agree with that. I understand that. And if you don't want to I'm not advocating that you have to live in an HOA. If you don't want to live in an HOA and you want to have all the seventeen cars on your front lawn that none of them are operable, then you can go find some property, go live in a part of town that doesn't have hoa's right. That's that. Cindy is exactly right, that's the intent. However, that is a subjective and overly broad theory versus how it is applied. Right, because I can be on an HOA board and Cindy could be, and she's got more I'm going to finish her tweet, but we can both be on an HOA board and things that I don't care about, like what color are your shutters? Right, Things like that that I don't care about that I don't believe actually lower the property value of neighbors. But Cindy may or vice versa. Right, And what I've learned in dealing with the HOA stuff for the last now almost three years, is that there are different things that trip people's triggers. You know. For some people it's, oh, my gosh, I can see your garbage cans, and that's against the rules. We have a rule in our HOA that you can't have your garbage cans visible from the street or from a neighbor's property. So if I look out my window and you have your trash cans in the back of your house up against the back of your house and I can see them, that's not allowed. So you have to either put the trash cans in your garage, which on days like today when it's a you know, two hundred degrees and let's say you happen to have just recently adopted a new cat as we have now, we are not big fans of keeping those garbage cans in our garage just cooking away and stinking up the garage, right, Or you can spend the money to build a garbage can corral that's on the side of the house, and that then has all sorts of rules and regulations about how it has to you know, be painted to certain colors that go with the exterior of the house. And it has to be on a paverer bed, it has to be attached to the house. So there are all these rules, which of course drive up the cost. So we can't just move them outside. We can't hide them in the backyard. We have to screen them from anybody seeing them from any property, right, and that that gets expensive. And then if you put it outside and you've got it like around the back or something, Now, how do you how do you get the cans to the curb. You're gonna have to walk them down the grass and in the rain with a soggy lawn. That becomes you know, difficult to do, tears up your lawn. So then you got to put in a walking path. Then you've got to get approval for that. There's additional costs, right, all just to keep your garbage in a can, which is like this idea that we don't generate garbage in my neighborhood. Anyway, this is not an issue that trips my trigger. I'm just noting, like this is the ramifications of the policy. And so, but some people they really really hate the site of garbage cans and they will call and complain about any garbage can that's out too long on the curb and they can see the can from there from their window or anything like that. For other people, it's cars parking on the street. For other people, it's cars parking in the driveway when the car doesn't fit all the way in the driveway because they built the driveways too short. So now you have a big truck, you try to park it in your driveway, it hangs out onto the sidewalk, and now you get to complain about that. So you can't park in the garage because it's too big of a vehicle or whatever. Maybe you have three vehicles. Can't park it in the garage, can't park it on the street, can't park it in the driveway without somebody complaining about it. Right, So some of these, some of the these things all fall under that same banner of protecting property values. Right because to listen to the people the anti garbage can viewing people, they're like that, you know that drives down property values. I disagree. I think seeing people's garbage cans on the side of their homes does not actually drive down property values. I do not believe that's the case anyway, But I agree with Cindy's point that that's the purpose. That is absolutely the purpose. She goes honest say, I have served on HOA boards for years and the bottom line is homeowners will eventually comply before things escalate in paying fines the biggest problem. And I agree with that too. Most homeowners do comply. The case that I mentioned in the last hour, the homeowners were not even aware, they were never told, and their HOA was then making money. They were getting a cut off of the fines and the violations and stuff, and the property management company was getting a revenue off of that. And that's a perverse incentive that needs to be eliminated. You shouldn't make money by nailing your neighbors, you know. The biggest problem, she says, and the reason we have to have hoas is we have allowed rental companies to buy properties who do not maintain them well, and the renter is not obligated to take care of the property. We have to communicate with the owner, who could be in Texas or by the time they respond to the violation, it could be months down the road. Meanwhile, the house looks like garbage and it starts to bring down the home values in the neighborhood, so you can just find them out the wazoo. But they don't care. So here's one thing. Yeah, here's one thing you could do. I don't know what your bylaws state, but ours says that the HOA can actually go and do maintenance on a property. So if somebody's not mowing their yard, like we could actually send in a crew mow the yard and then bill you for it and then shut down all of your keyfob access to all of the amenities, to the pool, to everything else, Like you don't get access to anything until you pay off the debt. Now, and maybe the companies don't care, but at least you're mowing the yard. You're throwing that on the bill, and then eventually when they do have to settle at some point, then you can you can get your money back. It's not ideal, don't get me wrong, but yeah, and I don't know, I don't know how else you address that. But again, this is the challenge whenever you're trying to write a policy, is like you're trying to get at these abuses, and there are abuses, but it's a fair point. You know, stories are powerful They help us make sense of things, to understand experiences. Stories connect us to the people of our past while transcending generations. They help us process the meaning of life and our stories are told through images and videos. Preserve your stories with Creative Video started in nineteen ninety seven and Minhill, North Carolina. It was the first company to provide this valuable service, converting images, photos and videos into high quality produced slide shows, videos and albums. The trusted, talented and dedicated team at Creative Video will go over all of the details with you to create a perfect project. Satisfaction guaranteed. Drop them off in person or mail them. They'll be ready in a week or two. Memorial videos for your loved ones, videos for rehearsal, dinners, weddings, graduations, Christmas, family vacations, birthdays, or just your family stories all told through images. That's what your photos and videos are. They are your life told through the eyes of everyone around you and all who came before you, and they will tell others to come who you are. Visit creative video dot com. Here's a peatmeal from Greg. I just paid three hundred and nine dollars and ninety five cents to leave my HOA. I'm selling a condo and moving on. Somebody told me once quote you live in an HOA neighborhood, move the view will be much nicer. Yeah. And look, I have no experience with like the condo or multifamily HOA stuff that I think that's a different kind of a beast because you've got shared walls and roofs and you know, HVAC systems, like all of that stuff is ooh, it's a whole different animal. Let me see here. This is from Tim who says a few years ago in a development down the street and HOA dispute resulted in three people from three different houses getting killed all over some trees not being trimmed to the hoa's wishes. Good lord, that's what I mean. These are political positions and like you, you got to try to problem solve this stuff. And some people, just like in any political entity, they get a little bit of power and it goes right to their heads. Some people, you give them a whistle and they've never had a whistle, and now they have a whistle, and man, they love to blow it, you know. Dean, Welcome to the program. Hello Dean, Hi Pete. Hello, I've just been listening to you, you know, list all the issues and problems, and it's absolutely true. It's a totally flawed organization. Hoas were set up by developers, and the developers made sure that when they wrote them up the first time that it covered gave them one hundred percent of the power. And once they fill the development and made all their money and have no other invested interest in it, they just pass that same document over to all the homeowners and somehow expect them to make it democratic when the whole document isn't democratic. And where I find the big flaw is this that the management companies and attorneys and all that. If you say, look, instead of like forty five pages of HOA documents, let's write five pages and make it simple, because it's going to be administrated by people regardless they say, oh no, no, no, you need sixty seven percent of the vote. This is going to cost you, you know, more money than you could imagine. Nobody's going to agree to it. So you know, the problem gets perpetuated with a bunch of volunteers, as you say, running the running the prison and changing every three years to boot make it worse. I don't know, that's how that's my experience with hi's you just got ignore them and have thing. Do you know that if violations you can collect, if they haven't paid their dues, you can put a lian on their house. But actually violations aren't collectible. You can't lean a property for a violation. So theoretically they can just sort of add up and you can ignore them and not have to deal with it until you sell. Until you sell, yeah, but. And then it becomes you know, then it becomes a negotiation. So so you know, I mean, it's just it's it's sad because you know, people live in a community or they all they all have one house, one vote, and you think they would all want to live together. But it's just like you know, starting like the government, as long as you have Republicans and Democrats, you can make sure that, boy, there's never going to be an agreement. You lost me on the last part. It's like, if you're managing your HOA for the best interest of the community, and you're engaging with them and doing you know, communications with homeowners and explaining stuff and full transparency, then most of the time a lot of these issues get settled pretty quickly. That's been myselt. But you're administrating an ambiguous document that gives you the lattitude. Just like what you said. If the president comes in and he hates Rosebushes because it reminds him of his former wife, he you know, he has the power to administrate that. There's architectural committees, you know, sort of really at the core of all the dictatorship and power. Well, but that's why you end up with the large documents, though, Dean, is because people try to they try to limit that kind of subjectivity, so they spell everything out and they make it so tightly regulated that you end up with the you know, the eighty page document. It's yeah, I mean, that's just sort of the nature of the application. I appreciate the call. I mean, these are again, every HOA is different, and it's going to and the direction and the actions are dictated by the people that volunteer, which is why I say, good competent people need to volunteer for these positions in local government and your hoas and your civic organizations, otherwise they will become governed and led by bad incompetent people. All Right, if you're listening to this show, you know, I try to keep up with all sorts of current events, and I know you do too, and you've probably heard me say get your news from multiple sources. Why Well, because it's how you detect media bias, which is why I've been so impressed with ground News. It's an app and it's a website, and it combines news from around the world in one place, so you can compare coverage and verify information. You can check it out at check dot ground, dot news slash pete. I put the link in the podcast description too. I started using ground News a few months ago and more recently chose to work with them as an affiliate because it lets me see clearly how stories get covered and by whom. The blind spot feature shows you which stories get ignored by the left and the right. See for yourself check dot ground, dot news slash pete. Subscribe through that link and you'll get fifteen percent off any subscription. I use the Vantage plan to get unlimited access to every feature. Your subscription then not only helps my podcast, but it also supports ground News as they make the media landscape more transparent. Melissa, It's a Pete tweet. Melissa tweets at me um. You can take the used cat litter and bury it under mulch around your shrubs and plants. It keeps deer and snakes away. It breaks down over time. Wait are you talking about like when I'm cleaning out the litter box, like doing the big clean, or you saying like, after I scoop it, I need to take the cat pooh and pee and bury that around my house in the shrubbery because that's gonna stink. I don't know if I'm gonna do that. No, I'm I'm like one hundred percent certain not going to do that, although there is this neighbor that I know I'm kidding Or is it just like the litter you just dumped the litter because after a while, you know, you got to change out all the litter. So I don't know, but I've not heard that keeping away snakes though, that's a good We do have them in our neighborhood. So and everything is a copperhead, that is what I've learned. Also, every snake is a copperhead snake. In Charlotte, Melissa also says I was on the HOA board for a minute. No Roberts rules, no order whatsoever, complete chaos and idiocy. I quit I will tell you that's the first thing that I did. The first thing I did was I implemented Robert's rules of order to run the meetings because I had been to the meetings and I was like, this is insanity. These meetings are taking, you know, two to three hours. Everybody is like arguing about stuff that is not germane. It's not relevant to what we're supposed to be doing here. And you know, people are arguing with each other and all of this other stuff. And like there was they had a sign and it said el moo e l m O. Okay, it was like a you know, it's like a printed out piece of paper. It's just big letters E l m O. And they handed them out to everybody. So we all got one of these sheets and we were supposed to hold it up when basically somebody's talking too long and so why elm Well, it's it stood for enough, Let's move on. So I said we should just have an Elmo doll, Like, if we're gonna go Lord of the Flies were like, I have the conk, you know, if we're gonna do that, then just have like an Elmo doll. But and that's the thing, like and whenever anybody arguing with somebody, they would just hold it up when the other person was responding to them. It's just it didn't work. So yeah, so I was like, we're doing Robert's rules here, like, oh, I don't know how it works. Like, okay, it's fine, I'll show you how it works. And after you know, a couple of meetings, a couple months go by, people now understand how it rolls, and we're out of there in less than ninety minutes. So yeah, that's that's what I mean, Like, you have to treat these things with the you know, with the mechanisms that exist in order to make them function. All right, So let me get to this piece by Caleb Pettitt National Review dot com. Home ownership is increasingly becoming out of reach for Americans. Federal, state, and local lawmakers have turned their attention to targeting large institutional investors in the single family rental market over the past decade. People are worried that these institutional investors are raising rents and making it more difficult for families to buy a home. Those a pose those to institutional real estate investors have pushed for restrictions or outright bans on single family rentals or sfrs by institutional investors, but he says most of these purchases are actually made by small investors. Approximately sixty percent of metropolitan rental home investor purchases are made by investors who have ten or fewer houses, while investors who own one thousand or more homes never make up more than about two and a half percent of home purchases, and they rarely exceed one and a half percent of home purchases. America's housing market is not dominated by large corporations. In other words, also institutional SFR investors improve and increase the supply of housing because these large institutional housing investment companies, which were rare before the two thousand and eight housing crisis. After eight, Fannie May held a large nonnumber of foreclosed houses and needed to remove them from its portfolio. In twenty twelve, the government passed the Real Estate Owned to Rental Initiative to help Fanny May sell off foreclosed houses in bulk. Once Fanny May sold off most of those foreclosed houses, institutional investors needed ways to expand the number of houses they owned. Today. They employed two methods. They purchase and renovate individual homes or more and more. They're just partnering with the developers to build entirely new communities. And he says both methods are good for the housing market because they increase the supply of homes. You want more affordable homes, have more homes. Here's a great idea. How about making an escape to a really special and secluded getaway in western North Carolina. Just a quick drive up the mountain and Cabins of Asheville is your connection. 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Call or text eight two eight three six seven seventy sixty eight or check out all there is to offer at cabins offashville dot com and make memories that'll last a lifetime. Single family rentals as single family rentals that are owned by what are called institutional investors. Those are the big ones, the big corporate entities. Did you know that those institutional investors by existing houses to rent, and then usually on average, before they list the house, they make anywhere from on average fifteen to thirty nine thousand dollars worth of renovations and improvements to the homes, whereas new homeowners spend about six grand when they move in, so they improve the properties. Also, institutional investors actually lower rents by increasing the supply of rental housing. Research published by NYU professor Joshua Coven shows that institutional investors are responsible for both an expansion in housing supply and decreases in rent in the American single family rental market. For example, the city of Austin, I believe we talked about this a couple of months ago when this report came out that Austin, Texas had gone on this like building spree. They were like build board houses everywhere and all this stuff, and lo and behold, the rental supply increased fourteen percent and the median rent fell by four hundred bucks a month. More housing supply reduces the rental costs, right, because now people can move around and landlords are going to have to offer deals when you have a limited supply. And the I think the sort of the textbook case in this is Ashville. They hate any kind of development of new housing. There's some of that sentiment here too. Oh another apartment building going up? Okay, so what would you prefer? But because like the growth is happening, So where would you prefer that happen? How would you prefer that occur? More single family homes to be built? Okay? That takes a lot more space than the rentals or the apartment buildings. See I am an all of the above kind of guy on this stuff. I don't want to see stuff banned. I don't want you. I don't want the ban on by cul de sac, neighborhoods. Those are important for different buyers. All of the above. Some people would like to rent homes and will be good renters. And here's the other thing too. I thought for years that you know that you you got to have a house, and that you know, builds generational wealth and all of that, but that's not actually the case for every person in every situation, especially with you know, the cost of housing so high that your mortgage, your housing costs. When you own your home, that mortgage is your floor. That's your The housing price or the cost of maintaining that house is above and beyond just the mortgage. Anything goes wrong with that, you know, hvac repairs, roof replacement, whatever, all of that is above and beyond the mortgage. That's the floor. You rent an apartment, that's the ceiling. You're not going to pay anything more for that housing than what you're charged with the monthly rent, and sometimes that's better for people. Institutional investors also do not appear to have a significant impact on home ownership rates. Get this, The American home ownership rate peaked in two thousand and five and then steadily declined as the subprime mortgage housing bubble popped. Since twenty fifteen, homeowners so for the next decade. Since twenty fifteen, though home ownership rates have steadily grown to the point where they now exceed the pre nineteen ninety five average, we do have a good number, a good percentage of ownership. Much of the recent shift away the home ownership can be attributed to increased regulation following the eight financial crisis. Since then, mortgage lending has been more heavily regulated, which has caused the average FICO score of borrowers at mortgage originations to increase. To actually solve the problem of high rents and housing affordability, the mortgage market should be deregulated to facilitate more home building, and zoning laws should be rolled back to make building easier. And I completely agree. All right, that'll do it for this episode. Thank you so much for listening. I could not do the show without your support and the support of the businesses that advertise on the podcast, so if you'd like, please support them too and tell them you heard it here. You can also become a patron at my Patreon page or go to dpetecleanershow dot com. Again, thank you so much for listening, and don't break anything while I'm gone.