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Minn. work group hears experts on how HOAs affect housing affordability and civil rights
Summary
A legislative work group on common interest communities heard testimony Jan. 10 from national and local experts who said homeowners associations can raise costs, concentrate exclusions and operate with little oversight; members began drafting recommendations including limits on municipal practices that effectively force HOAs, 60‑day notice rules for fee increases, and governance and enforcement reforms.
The Minnesota legislative work group on common interest communities and homeowners associations met Jan. 10, 2025, to examine how HOAs intersect with housing affordability and civil‑rights concerns and to begin drafting statutory recommendations.
Experts and a public testifier told the panel that HOAs can increase homeownership costs, shift maintenance and infrastructure burdens onto buyers and sometimes perpetuate exclusionary practices. Cameron Riffkin, a policy specialist with the National Conference of State Legislatures, said HOAs are widespread: "over 75 million Americans reside in a community that's governed by a homeowners association," and state policy choices—zoning, permitting and disclosure rules—shape whether HOAs help or hinder affordability. He urged lawmakers to consult NCSL resources and the 2024 legislative tracking database for state examples.
Public testifier Steve Horvath of HOA United urged the work group to study academic research and model acts. Horvath recommended several legal tools, including a statutory remedy that awards prevailing homeowners actual damages and attorney fees and a civil‑penalty framework he said would deter serious violations. He also suggested adopting updates from the Uniform Common Interest Ownership Act and adding anti‑retaliation protections.
Shana T. Menz, a housing litigator with the Housing Justice Center, told the group that HOAs have a documented history of exclusionary practices and recommended three priorities: minimum standards for HOA rulemaking (including at least a 60‑day notice and a comment period for significant rule changes), protections to allow homeowners to rent their property without blanket screening rules, and meaningful redress before a homeowner can lose a home because of HOA actions. "Currently there are no requirements for people who are in HOAs and representing their communities to be representative of the community," Menz said, arguing for education, notice and procedural guardrails.
From an industry perspective, Nick Ericson of Housing First Minnesota explained why HOAs are often created: structural design (condominiums and townhomes), market choice (maintenance‑free products) and municipal approval processes such as planned unit developments (PUDs) or platting that can require common property. "HOAs are a tool of fiscal exclusion," Ericson said, warning that PUD negotiations and municipal conditioning can effectively force developers to create HOAs and thereby shift costs onto buyers.
Members spent the latter portion of the meeting converting those presentations into potential recommendations. Several members supported drafting language to prohibit municipalities from imposing approval requirements that would necessitate an HOA—Vice Chair Lucero described model wording to bar municipal requirements that "necessitate the formation of an HOA." Other proposals advanced included a 60‑day notice requirement for fee increases and special assessments (with emergency carveouts), mandated fair‑housing and governance training for board members and property managers, clearer dispute‑resolution pathways, guardrails for reserve funds and accountability when infrastructure or management is sold to private investors, and consideration of source‑of‑income protections.
No substantive statutory changes were adopted at the meeting; members directed staff to consolidate roughly 132 possible recommendations into thematic buckets (governance, oversight scope, dispute resolution, fines/fees/foreclosure, registration/licensing, training, insurance, etc.), circulate clean drafts ahead of the Jan. 17 and Jan. 24 follow‑up sessions, and use breakout groups to prioritize items for the final report to the legislature.
Procedural notes: the work group approved the minutes from Jan. 6, 2025, by voice vote and later recessed briefly by motion of Member Murray. The group adjourned after outlining next steps and scheduling the two follow‑up meetings.
