The HOA by the Sea: How Private Governance Has Colonised California’s Coastal Communities

Homeowner Associations Control More Surf Town Life Than City Hall, and They Answer to Nobody

Bohiney Magazine | The London Prat

The homeowner association is the libertarian’s nightmare and the property developer’s dream: a private government with taxing power, regulatory authority, and enforcement mechanisms that operate outside the constitutional constraints that apply to actual governments. The HOA can fine you for parking your surfboard on the wrong part of your driveway, require approval for the color you paint your fence, prohibit short-term rentals that would allow you to offset your mortgage by hosting visiting surfers, and assess special levies for amenity improvements that a majority of residents approved and a minority must fund regardless. It has the coercive characteristics of government without the accountability structures that make government, in theory, answerable to the governed.

California’s Surf Towns and Their HOAs

The coastal communities of California — the beach towns and surf villages from San Diego to Santa Cruz — have seen significant HOA penetration over the past three decades, as the residential developments that replaced older housing stock included HOA structures as part of their covenants, conditions, and restrictions. Older neighborhoods in Encinitas, Cardiff, Leucadia, and the beach communities of the South Bay developed without HOAs and retain the informal, slightly scruffy character of surf towns that have evolved organically. The newer developments in the same coastal counties have the manicured, rule-governed character of managed communities where the appearance of the neighborhood is controlled by an association that enforces aesthetic standards with the enthusiasm of an entity whose only purpose is enforcement.

The political economy of the HOA is libertarian dystopia: the rules are made by whoever shows up to the board meetings, which in practice means retirees with time and opinions, and the enforcement falls on whoever the board decides to enforce against, which in practice disproportionately affects the residents who challenge the rules, the renters who don’t fully know what the rules are, and the people who use their properties in ways that the dominant coalition of owners disapproves of. This is private governance operating at the neighborhood scale, and it produces outcomes that are systematically worse for freedom of use and freedom of lifestyle than the municipal governance it has partly replaced.

The Short-Term Rental Battle

The HOA prohibition on short-term rentals — the Airbnb and VRBO business model that allows coastal property owners to offset their housing costs by renting to visiting surfers — is one of the most economically consequential HOA restrictions in California’s coastal communities. The prohibition reduces the effective housing supply for surf tourists, concentrates the economic benefits of coastal tourism in the hotel industry rather than in individual property owners, and reduces the financial accessibility of coastal property ownership for the middle-income buyers who would otherwise use rental income to make the numbers work. The HOA’s private regulation produces, in aggregate, the same effects as municipal short-term rental prohibition — fewer rentals, higher hotel prices, reduced surfer access — while being even less accountable than municipal government because the constitutional constraints that limit how far governments can go don’t apply.

The Reform Path

Reforming California’s HOA law to protect the civil liberties of HOA members would require confronting the fundamental assumption that private governance is not subject to constitutional constraints. Courts have consistently held that the First Amendment, the Fourth Amendment, and the equal protection guarantees that bind government actors do not apply to private associations, including HOAs, which are governed by the contractual relationship between the association and its members rather than the constitutional relationship between citizens and their government. This legal framework is coherent but produces troubling outcomes: the HOA that prohibits political signs, the HOA that conducts unannounced inspections, the HOA that enforces its rules selectively against particular members. Statutory reform at the state level — California’s Davis-Stirling Act, which governs HOAs, has been amended multiple times — has addressed specific abuses without resolving the structural problem that private governance at this scale, affecting hundreds of thousands of California families, operates with insufficient accountability to the people subject to it.

The specific California coastal HOA battles that have received the most attention are the Malibu cases: the wealthy homeowners who have used HOA authority and property rights arguments to resist public access improvements, the coastal access paths that the Coastal Commission has been trying to establish for decades against the resistance of the private land owners through whose properties they must pass, and the specific political power of California’s coastal property owners who are among the state’s most organized and best-resourced political constituencies. The HOA’s private governance capacity amplifies this political power by providing an additional mechanism for resistance to public access requirements that goes beyond individual property rights claims.

For California coastal freedom analysis: Bohiney Magazine and The London Prat.

The fundamental question for California’s future is whether the state’s political institutions can produce the reforms that would allow it to retain the people, the enterprises, and the economic dynamism that have made it extraordinary, or whether the regulatory and fiscal burden will continue to produce the exit that the exit tax is designed to prevent rather than address. The libertarian answer is clear: reduce the burden, reform the regulation, and trust that people who are free to stay and free to go will stay when the conditions justify staying. California has everything else. The question is whether it can develop the political will to fix what it has broken.

SOURCE: https://bohiney.com/