Q I have a friend who is the president of a local homeowners association in an upscale Mukilteo neighborhood. He recently contacted me with a question that I could not answer. I was hoping you could help.
Apparently there are some residents living in the community who are not adhering to some of the conditions, covenants and restrictions in terms of home and yard upkeep.
What he wants is an article or something in writing that discusses how unkempt homes, yards, etc., affect the overall neighborhood and property values. I could not find anything so I was hoping that you might be a resource.
He believes that having something from an outside source may have more impact than just the words of a resident board member. Do you know of anything or have you ever written any articles on this topic?
S.S., Everett
A I have not specifically addressed this issue in past columns, so I will do so now.
First, let me briefly recap a previous column on the topic for the benefit of readers who may have missed it.
Conditions, covenants and restrictions are essentially a form of private zoning that imposes rules on the property owners within a housing development. The initial rules are written by the developer and administered by a homeowners association that is also set up by the developer when a new housing development is created.
You’ll find the covenants attached to your title insurance policy in the closing papers that you received from the escrow company after buying your home.
They may impose standards for lawn and home maintenance, to preserve views, ban parking of boats and trailers in front of houses, etc. These rules are intended to maintain a clean, attractive neighborhood for the benefit of all property owners and preserve and enhance home values in the neighborhood.
In answer to your specific question, neighborhood appearance definitely has a direct impact on home values. Most people want to live in a neighborhood where the homes are clean and painted and the yards are well kept. When you drive into a neighborhood that is full of homes with weedy, overgrown lawns and peeling paint on the houses, you get the feeling that the residents don’t care much about their property. Neglect tends to breed further neglect.
If I see a neighborhood like that, I assume it’s on a downhill slide and will only get worse.
Who would want to invest their hard-earned money to buy a home in a neighborhood like that? Very few people – and only if they could buy a home at below-market price. Typically, those kind of buyers are real estate investors who will buy a home and turn it into a rental house, which further accelerates the neighborhood decline because renters typically do not care for their property as well as homeowners.
Conversely, if a neighborhood is full of well-maintained homes with clean, mowed yards, it makes a good appearance and attracts home buyers. Home prices are based on the basic economic equation of supply and demand.
Since the supply of homes in a given neighborhood is fixed, the only variable is buyer demand. If your neighborhood makes a poor appearance, it drives away prospective buyers and reduces demand for homes in your area. That means home prices in your neighborhood will not rise as fast as the home prices in the desirable neighborhoods, and may in fact even decline.
Some homeowners may feel that covenants are Draconian rules that infringe on their freedom to use their own property as they wish. But as I have pointed out in this column, it is truly in their best interest to comply with these restrictions and make sure their neighbors do as well, because it will have a positive impact on the value of their home, which is probably their biggest single investment.
Mail questions to Steve Tytler, The Herald, P.O. Box 930, Everett, WA 98206. Fax questions to Tytler at 425-339-3435, or e-mail him at economy@heraldnet.com.
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