HOA Detective™ | June 26, 2026: My father bought the HOA Detective’s Fort Worth, Texas childhood home in 1962 for $9,500 using a VA mortgage. The interest rate on that “user-friendly” mortgage was 5.5 percent.
The entire monthly payment – including principal, interest, property taxes, and insurance – was less than $100 per month.
By modern standards, that statement sounds utterly absurd.
The place was not a dump, either. In fact, it was one of the largest homes in the neighborhood, situated on a double-sized lot that was the largest lot in a post-WWII subdivision of approximately 200 homes.
The truly remarkable part of the story is not the mortgage or the size of the house. The remarkable part is what happened afterward. The mortgage eventually disappeared. The tax collector did not, of course.
One expense my parents or the current owners have never had to pay is a bill for a homeowner association (HOA) assessment.
Today, discussions about housing affordability almost always focus on home prices. Yet few people stop to examine how the actual structure of homeownership has changed over the last sixty years.
The American Dream: The so-called “American Dream” of homeownership was once built around a relatively simple proposition:
- Buy a home.
- Pay off the mortgage.
- Own the home free and clear.
- Once the debt disappeared, the family retained most of the economic benefits of ownership.
- Equity in the home increased, even if it increased slowly.
- Leave the family home to the next generation.
- At the very least, the heirs inherited a home with no underlying mortgage.
Texas as an Example: To understand how we arrived where we are today, we need to examine both the property tax system and the rise of Privatopia over the last 50 years. In 1962, Texas property taxation operated under a highly decentralized and often chaotic framework. According to the Texas Comptroller ¹, property tax administration throughout much of the twentieth century was notoriously inconsistent. Different taxing jurisdictions frequently appraised the same property differently.
Assessment practices varied widely. In some cases, assessed values reflected only a loose relationship to actual market value. A 1945 state audit found that only seven Texas counties assessed property at the legally required 100 percent of market value. Across the state, real property was assessed at an average of only 47 percent of market value.
Texas SB 621, 66th R.S., 1979: The modern Texas property tax system emerged from the 1979 Peveto reforms. These reforms created centralized county appraisal districts, separated appraisal from tax collection, required appraisal at market value, and established more consistent valuation procedures.
From a governance standpoint, the reforms were difficult to criticize. Yet they also created a modern appraisal machine. Property values became more systematically measured. Reappraisals became more routine. Taxable values became more closely linked to market conditions. local governments discovered the economic advantages of privatized development.
Beginning in the 1970s and accelerating through the following decades, municipalities increasingly approved residential developments structured as common interest communities (HOAs).
Streets, stormwater systems, parks, open spaces, recreational amenities, and various infrastructure components were transferred from public responsibility into private ownership.
By the end of the 1980s, the reformed property tax system engineered by the 1979 Peveto bill was in place, and ad valorem property tax rates in Texas were on the rise as a result. In the most populated counties, this rise was nothing that anyone had ever seen.
This was an extraordinarily attractive arrangement for local governments. New residents continued paying property taxes while municipalities avoided many future maintenance obligations created by the burgeoning residential development boom.
The homeowner association inherited the bill, and the local municipality got to keep the growing property tax revenues that had previously been spent to maintain “the commons.”
Introducing Privatopia: Historically, homeowners paid property taxes and expected those taxes to fund roads, parks, drainage systems, and other community infrastructure. Under the emerging and rapidly growing Privatopia development scheme, homeowners increasingly paid property taxes and HOA assessments.
Today, the HOA/Privatopian model is entrenched throughout every major metro area of Texas, just like almost every other large metro in the country. The result:
- The public (property tax) obligation remains, and is bigger than ever.
- A private obligation (HOA assessment) has been added, and continues to increase.
- In effect, homeowners are increasingly responsible for financing two layers of government.
Win-Win no More: My father’s second home provides an instructive example. Purchased in 1975 for $15,000 using owner financing. The home had been built in the early 1950s and had never been renovated or modernized. Structurally, it was sound; it was simply a 22-year-old, post-WWII era home that was tired and showing its age.
The purchase was accomplished with a $5,000 down payment. Two principal payments of $5,000 each followed over the next two years. By 1977, the mortgage was gone. During the two years it took to pay off the original purchase price, he and my stepmother paid the previous owner $50/month for interest, and paid the property taxes and homeowner’s insurance. A WIN for the previous owner, a WIN for my father and his new wife.
47 years later: During 47 years of ownership, my father and stepmother never:
- Refinanced a first mortgage.
- Took out a home equity loan for any reason.
- Borrowed money to pay for home improvements – of which there were many.
For the remainder of his life, every improvement made to the property was paid for with cash. New windows, doors, New HVAC, roof replacements, new gutters, driveway improvements, fencing, appliances, and an enclosure that added approximately 200 square feet to the home’s footprint. All paid for in cash. No loans. No refinancing. No perpetual debt cycle.
My father died in 2003, my stepmother in 2022. NEITHER of them ever paid a single, solitary DIME in HOA assessments.
From what I can tell, they both lived full, rewarding lives WITHOUT the need for an HOA stuck to their lives like chewing gum on a tennis shoe.
To this day, the neighborhood where the home is located is a vibrant, desirable place to live, if Fort Worth, TX is the place you choose to live. Property values hold their own.
When the home was sold in 2022 by my stepmother’s estate, it took less than 60 days to receive an offer that was 95% of the listing price.
2026 Ownership Model: The modern homeowner often follows a very different trajectory. A mortgage may remain in place for thirty years. Refinancing events occur repeatedly. Home equity becomes collateral. Insurance costs rise. Property taxes rise. HOA assessments rise. Special assessments wipe out retirement savings
A Perverse Form of Privatopia: The modern high-rise condominium tower is the most perverse, illogical form of Privatopia. What was once a neighborhood of detached homes occupying one hundred or more acres can now be compressed into a single city block. 200 to 500 households can be squeezed into a single high-rise building of 25 to 50 stories.
- From a land-use perspective, the efficiency is remarkable.
- From a governance perspective, the consequences are profound.
- From a property tax perspective, the impact is TITANTIC!
Property Tax Juggernaut: The high-rise condominium is nothing less than a property tax juggernaut. Even a decent-sized mid-rise building containing 100 condominium units is the tax assessor’s dream come true.
Each owner pays property taxes based upon the assessed market value of the units, just as they would if the home were a traditional single-family detached house in a suburban setting. In many jurisdictions, the effective property tax burden approaches two percent of value each year. Think about the numbers:
- 100 Units @ $500K = $50 million real market value (RMV)
- $50 million RMV taxed at 70% = $35 million tax assessed value (TAV)
- Assuming an effective tax 1.5%, TAV = $525,000 total tax revenue.
Assuming this same city block formerly housed 30K SF of aging commercial space valued at $300 SF ($9 million RMV), the same TAV of .70% would yield a taxable value of $6.3 million, effective tax 1.5% TAV = $94,500 total tax revenue.
In Other Words: if the planning/permit/industrial complex can engineer a scheme that encourages the building of a new 100-unit condominium on the same city block that once housed 8 to 10 decaying commercial buildings that generated less than $100K in annual property tax revenues, all of a sudden, the local treasury is the beneficiary of more than $500K in annual property tax revenues.
CHA-CHING goes the tax man’s cash register, over and over year in and year out!
The best part of the scheme is that the local authority doesn’t have to invest anything to build that tax juggernaut.
- Need to widen the traffic intersection to service the juggernaut?
- Make the developer pay for it!
- Need to improve the sewer and water connections to serve the juggernaut?
- Make the developer pay for it!
- Need some green space in the area, so there is a place for the “unhoused” residents of the neighborhood to linger?
- Make the developer pay for it!
You Can’t Make This Stuff Up! Before you know it, the local city fathers are talking about building a billion-dollar sports arena to try to attract a professional sports franchise.
Never mind that the city hasn’t spent a dime on road maintenance for the last twenty years. Or that the schools are falling apart, while student grades are falling through the floor.
Welcome to Privatopia! The great irony is that the modern condominium was originally promoted as an affordable path to homeownership. Yet many owners now find themselves financing two “governments.” Under the Privatopian model, maintaining aging infrastructure and financing long-term capital spending obligations is the responsibility of the HOA.
Previous generations would have expected these costs to be paid for with property taxes collected by a local municipality rather than a privatized, unregulated entity called a homeowner association. Condominiums, as a form of housing, were a novelty most people rarely experienced unless they visited Aunt Harriet during summer vacation at her condo in Florida.
Notes | Sources
1. Texas Comptroller of Public Accounts, ‘The History of the Property Tax in Texas,’ Fiscal Notes (October 2015). – https://comptroller.texas.gov/economy/fiscal-notes/archive/2015/october/proptax.php
2. Evan McKenzie, Privatopia: Homeowner Associations and the Rise of Residential Private Government (New Haven: Yale University Press, 1994).
3. U.S. Census Bureau, Historical Housing and Income Statistics.
https://www.census.gov/data/tables/time-series/demo/income-poverty/historical-income-households.html
4. Texas Senate Bill 621 (1979), commonly known as the Peveto reforms. – https://lrl.texas.gov/legis/billsearch/billdetails.cfm?billtypedetail=SB&billnumberdetail=621&legSession=66-0
Because You’re Buying More than a Home!
