Former Freespace guest blogger Derek Van Hoften writesI was quite surprised to see you suggest that homeowner's associations are anything other than private:
“At some point, your freedom to choose to go elsewhere is curtailed—that is, your freedom to exit is so expensive—as to make your acceptance of a particular agreement something less than a meeting of the minds.”
That sounds an awful lot like the type of logic used by anti-capitalists to advocate government oversight and control of private contractual relationships, or for government control of scarce resources. Why, we can’t leave things like water or land to the free market, because all of it will wind up in the control of people who won’t sell it to us on our terms. If your concern is a scenario where virtually all land were subject to a homeowner’s association so that no one could acquire land that is truly his own, shouldn’t you also be concerned about the water supply being scooped up by private actors, who would only sell it subject to some onerous terms?
When I buy a home, one of the most important criteria is that it not be part of a homeowner’s association. I despise them. Still, as long as they are truly private, I think they are legitimate.
It certainly is the same logic that the left uses to control private contracts—that’s why I cited Roscoe Pound’s famous law review article Liberty of Contract, 18 Yale L.J. 454 (1909). In that article, which I don’t have before me, Pound argues that a contract between an employer and an employee isn’t a real meeting of the mind because the employee doesn’t have a real choice in the matter: he can’t really afford to go somewhere else, so he doesn’t have the power to negotiate a fair deal with an employer. Thus it’s proper for government to regulate such contracts.
Likewise, I’m saying that homebuyers don’t really have much of a choice when it comes to buying a home in a place, or exiting a place, where there’s an intrusive homeowner’s association.
The fact is, there is always some point where the cost of exiting a deal is prohibitive. The more expensive the option to exit, the less the agreement that the parties reach can realistically be described as a meeting of the minds. The common law has always recognized this, and has struck down agreements based on an imbalance of bargaining power. That power is a dangerous one, and ought to be exercised only in rare circumstances, because it could lead to the eradication of all freedom of contract—which is just what Pound wanted—but are we really willing to abandon it in all cases? I’m open to such an argument, but it probably has some unpleasant implications.
I prefer homeowners’ associations to government, because the freedom to exit is greater in the former case than the latter. But even in the former case, the freedom to exit is pretty unrealistic. Either way, the mere fact that my argument is rooted in the same thought that enemies of freedom have exploited does not necessarily render it wrong.
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