INDUSTRY OVERVIEW
The future of secured communities inSOUTH AFRICA
Predicting the future is far from an exact science , but the one thing we can be sure of is that secured communities must adapt to keep up with changes ‘ beyond the wall ’.
In trying to decipher the future of secured communities , there is much to consider . Regulators will soon require HOAs to address matters that were previously the responsibility of government , and to find business models to address them adequately . This might seem targeted and burdensome , but HOAs – when they take over the running of a community – inherit a slew of assets , but also significant risks and responsibilities . So the time has come for some serious introspection , and for HOAs to look at ways to guard the communities they govern .
The days when an HOA ’ s management and board could sit back as mere custodians of the status quo are fast coming to an end . It ’ s time to go beyond managing operations and assets inside the walls of these developments . As an industry , we constantly need to research and evaluate the future , as best we can – we must take heed of the signs on the horizon , and read the ‘ writing on the wall ’.
Local government and HOAs
The relationship between local government and HOAs is not a new topic . Many have tried to separate them in the past , more from a convenience point of view . ‘ Experts ’ have tried to prevent legislative interference in their perfect models , but let ’ s stop lying to ourselves and our stakeholders . Change is not coming – it ’ s here ! Those who wish to dig in their heels or stick their heads in the sand will be hurt most . We would like to argue that we merely administer common funds for common services , and have little effect on anything outside the gates . And – we insist – they dare not intervene inside our hallowed walls . With this attitude , it is easy to predict growing tension between most HOAs and local government . Already there is conflict about rates , taxes , traffic , security vs SAPS , and the list goes on ...
Between 1990 and 2010 , many developers built aesthetically pleasing estates specifically to hand over to an HOA , and then moved on to new territory – a strategy that has had some dramatic consequences . With many of these developments now standing as a castle on a hill among the surrounding community , the true cost of separation is starting to become obvious . The driving force of this type of development , and the cost of aesthetic commonage , is rapidly becoming dwarfed by the cost of security , governance and compliance with external pressures .
It is clear that separation by means of a fence or a wall alone cannot adequately address the issues . As property values ‘ beyond the wall ’ decline , they affect the property values , aesthetic values and lifestyle values of the luxury estates in their midst . This is leading to proposed legislation that will attempt to level the playing fields once more .
And that ’ s the big question . Is this the only way to ensure a property holds its value , has security of utilities , safety and good quality amenities ? It probably still is , for now .
We have to change some paradigms and ways of managing developments . We need to protect ourselves , both from governance inadequacies inside the gates , and also on a macro level . This onus cannot be placed on the smaller developments ; it must be championed by the old dogs – the communities that have seen it all play out before , and have somehow survived and even prospered . Careful investigation of these cases can serve as a reference for how the new model could evolve . This is of value not only to home owners and HOAs , but also to developers . The very nature of property in South Africa has been captured by a model that still holds risk if we do not address the growing property tensions outside our gates .
The big picture
The fact that it is possible to participate in the management of the local area surrounding a development is not new ; it is already implemented by mega developers . The problem starts when the developer exits , and the HOA becomes an island . This island often elects leaders that are popular but not skilled in governance , business or sustainability . Furthermore , many fall prey to the illusion of elitism , and believe in keeping the gates closed for status , rather than recognising the uprising starting ‘ outside the castle ’. All through history , castles have been stormed . No matter their form , or the legitimacy of the attack , it will come . In the same way that the best way to protect your house from
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