Editors’ Business Blog: A foreclosure perfect storm

Guest column by Gary A. Poliakoff and Ryan Poliakoff
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The worst housing crisis and economic crash since the Great Depression have created a dangerous financial storm that threatens to destroy thousands of Shared Ownership Communities (condos, co-ops and HOAs) throughout the United States. The danger is quiet, but staggering—over 60 million Americans live in SOCs, or almost 20 percent of the population.

SOCs rely on maintenance payments from owners to pay for a host of municipal-type services provided to residents, including landscape maintenance, security, infrastructure improvements and even social services. But many owners, hit hard by the financial crisis, have chosen not to make these maintenance payments, pushing the responsibility for this “bad debt” onto their neighbors. As a result, maintenance costs in some neighborhoods have doubled or even tripled, forcing a small, hard-hit cadre of well meaning residents to cover the costs of operating an entire community. Read more