Developers: 2, Homebuyers: 0

Just Bad Legislation!

As proposed, developers are granted more power and subject to less accountability than the top-ranking elected official in any county in Georgia.

The proposed legislation, offered in the House by state Rep. Larry O'Neal (R-Warner Robins) and in the Senate by Sen. Cecil Staton (R-Macon), is a sparkling jewel for developers, lenders and county-government politicians.

Home buyers, meanwhile, pay property taxes twice. They pay for their own infrastructure with taxes over which elected officials have no control. And they pay the debt and upkeep on everybody else's through separate county-levied property taxes.


House Bill 1323
By: Representatives O`Neal of the 146th, Keen of the 179th, Royal of the 171st, and Porter of the 143rd
(http://www.legis.ga.gov/legis/2005_06/search/hb1323.htm)

Senate Bill 414
By: Senators Staton of the 18th, Chapman of the 3rd, Whitehead, Sr. of the 24th, Carter of the 13th, Grant of the 25th and others
(http://www.legis.ga.gov/legis/2005_06/fulltext/sb414.htm)


JIM WOOTEN – AJC
Published on: 02/19/06
http://www.ajc.com/opinion/content/opinion/wooten/stories/021906.html

Conservatives set out to privatize government. But a revolutionary bill in this year's General Assembly governmentizes the private sector.

The "Georgia Smart Infrastructure Growth Act of 2006," is pending before the House. A similar bill, the "Rural Georgia Economic Development Act of 2006," has been introduced in the Senate.
The powers of government given to developers are sweeping. The protections for consumers are virtually nil.

Both bills are intended to spur large-scale residential development. Developers would borrow money tax free to build roads, recreational and other facilities, schools, fire stations and most anything else. The debt is the equivalent of a mortgage of up to 40 years applied to every home sold. Default on fees and assessments, however unreasonable, and your home's on the auction block.

Protections for home buyers? Two — neither particularly meaningful. One protection is that within 10 years, a measure of self-government passes to homeowners. Another is that property buyers are required to acknowledge that the "infrastructure development district may impose and levy taxes or assessments, or both taxes and assessments, on this property."

Not reveal how much. Not how long. Not terms of management contracts or leases that could bleed future homeowners. Nor is there any accounting for whether the charges levied against homeowners for facilities and services are fair and reasonable. The consumer protections amount to buyer beware.

The proposed legislation, offered in the House by state Rep. Larry O'Neal (R-Warner Robins) and in the Senate by Sen. Cecil Staton (R-Macon), is a sparkling jewel for developers, lenders and county-government politicians.

Lenders have virtually no risk; if the development fails, they take the property and the improvements. Developers are czars who set and levy fees for facilities and services.

County officials, who must approve the projects, have entered a pact with the devil. They get the project and all the taxable property therein added to the tax rolls at little or no cost.

Home buyers, meanwhile, pay property taxes twice. They pay for their own infrastructure with taxes over which elected officials have no control. And they pay the debt and upkeep on everybody else's through separate county-levied property taxes.

The concept is not entirely new. It's drawn from a Florida law on the books for more than 20 years. By now, some 300 such developments have been approved.

One of the most popular is The Villages, a 23,000-acre retirement community in Central Florida. At the 2000 census, its population was 8,333. Now it's estimated at 57,000 and growing by 400 per month. By 2010, the population is expected to reach 100,000, according to its chamber. It offers all the amenities that middle- class retirees could want. A clean, safe community offering dawn-to-dark activities has appeal for which they are willing to pay. That is the free market at work.

With honest, reputable developers, the risks are minimal. But laws should protect home buyers from crooks and scoundrels.

In 10 years, of course, control will pass to residents. But the first chance homeowners have to replace a developer appointee is "within six months of the sale to the general public of land representing 50 percent of the geographic area . . . " Geographic area. It's not until six months after 80 percent of the geographic area — not excluding set-asides — is sold that homeowners have the first opportunity to gain a board majority.

One protection that's definitely needed: Disclosure. Before potential purchasers close on contracts, they should know of the existence and terms of all leases — recreational facilities, for example — and management contracts and agreements for which they are to be financially obligated.

They should know, too, how much debt they assume for infrastructure and amenities. I would argue, too, that upon achieving majority control of the board, the homeowners association should be able to terminate contracts deemed not to have been fairly drawn between parties of equal standing.

As proposed, developers are granted more power and subject to less accountability than the top-ranking elected official in any county in Georgia. Better think long and hard about this one, boys.