What does VR gaming have to do with CICs?  Palmer (who sold Oculus to Facebook for $2 billion back in 2014), believes that only the threat of serious consequences can make a game feel free.

What if your individual volunteer governors (Board of Directors), association, management company and vendors all operated as if there were serious consequences for doing the wrong thing?  What would THAT world look like?  Less omnipotence for sure!

❗❓❗HEAD SCRATCHER❗❓❗

Overwhelmingly Satisfied Concerned 

• Can we have a grounded discussion about the CIC pump material disseminated by CAI and FCAR?  We openly acknowledge that both organizations are specifically geared to benefit the industry and not CICs and their homeowners.  Terse pump articles published on HOAresources are one thing, but surveys cloaked in mystery proclaiming triumphant results are another.  Their surveys often fail to disclose critical details such as: how many people took the survey, length of ownership, residency status (part- or full-year), role(s) such as Board and committee service, etc.

While FCAR’s 2022 “Homeowner Satisfaction Survey” includes published results with mediocre detail, results from CAI’s 2021 Volunteer Leader Survey were never published save for the aforelinked one page summary written by Janet Newcomb.

Why is all this important?  For starters, there is no study proving that covenants increase property values relative to similarly sited homes without them.  Second, there is far more chaos and dissatisfaction within CICs than any industry group will ever admit and the evidence is everywhere, but especially on Reddit.

• Let's Get Honest About HOAs covered in  Why Homeowners Hate Their HOAs

• New research busts myth that HOAs protect property values

• Homeowners, residents dissatisfied with HOA communities…

Both articles immediately above are part of the excellent coverage provided by Deborah Goonan’s Independent American Communities 

💰 FISCAL RESPONSIBILITY 💰

Plan for Yield

• Several associations in Seattle, especially those with relatively substantial accrued reserves, have chosen to diversify their investments into municipal bonds, corporate bonds and equities that history has shown offer superlative returns over the long-run.

• Only 8% of 50 respondents to the 2022 CIC Reserve Questionnaire  indicated their association invests in non-principal guaranteed securities.

• Properties are designed to last decades.  Your reserve study looks out at least 30 years.  How are you planning to maximize returns to reflect your investment time horizon?  From our Reserve Resource & Infrastructure Guide:

• How much are your homeowners (members) paying to compensate for reserve investments that perennially underperform inflation?

• Do your relevant state statutes and governing documents restrict the type of investments you can make?

• Is your Board meeting its fiduciary duty or duty of care by failing to look beyond fixed income and/or guaranteed return of principal investments?

• Is your association acting like a prudent investor that has considered all the risks and performed all the necessary due diligence to make financial decisions that are reasonable for all time periods from 1 year to 3+ decades?

• Michael Pollock provides investing insights in The Best Places to Get Income in the Bond Market Now:

  • Bonds have done so poorly this year that many investors probably are wondering what the point is of owning any.

It’s unsurprising that many are fleeing the bond market, but those investors could be missing some key points, experts say. The market now may not be far from its cyclical low. And even if it doesn’t recover quickly, bondholders will continue to enjoy a decent stream of interest payments. - WSJ 11/6/22 

Do You Know Your Financial Advisor?!

…”for years people like me have been telling you that advisers have to disclose much more about themselves than stockbrokers do, so you can make better-informed decisions about their services and integrity… however, that isn’t always true. In some ways, financial advisers have to disclose less than brokers do—and what they don’t tell you could hurt you.” - WSJ 11/4/22