FAILING GOLF COURSES AND THE HOA

“In the RED corner, 90% who are non-golfers, the HOA, wants to kill the golf course. In the BLUE corner, the 10%, who are golfers, want to save the golf course.”

THERE IS ONE 1 THING THE BATTLE BETWEEN GOLFERS AND NON-GOLFERS HAVE IN COMMON

I receive calls almost every week from a home owner’s association (HOA) board member about the dilemma facing the community’s failing golf course. In every case the classic confrontation between the golfers and non-golfers develops. Unfortunately the non-golfers outnumber the golfers as high as ten to one. In essence, if the golf course cannot pay its way and the non-golfer group prevail the golf course is doomed! But there will be consequences.

The battle is economics right to the core of the individual household. The Golfer feels if the golf course closes part of the beauty of the neighborhood is lost. The non-golfers, especially the home owners on the other side of the street, say they don’t give a damn about golf, because they don’t play golf. They call golf a waste of time, money, and real estate. “Why should I pay so clowns in pink shirts can chase a little white ball around a field and curse like truck drivers?”

ARGUMENT ON BOTH SIDES

The writer agrees, somewhat, with both sides in the debate. I do feel a person who is not a golfer should not be required to subsidize a person to play golf. After all, golf is probably one of the greatest wastes of time, money and real estate ever devised! I mean, golf was illegal in Russia till very recently. On the other hand, however, a golf course is permanent open space or green space. Managed, yes, but 99% of golf courses built since the early 80’ are on designated green space land and likely cannot be used for any other purpose. So, the non-golfers just say, “Let it grown in.” Grow in? Have a look:

Ravines Golf Resort was a first rate golf course in Middleberg (Jacksonville), Florida. The weeds will just grow taller. It will take many years (generations) before the original forest returns. 

MY POINT…

THE 1 THING GOLFERS AND NON-GOLFERS HAVE IN COMMON – PROPERTY VALUES

First of all, while the debate goes on the one thing that hurts the neighborhood is uncertainty. Let’s make it simple: If you want to sell your house, what do you say to a potential buyer when you don’t know whether the golf course will survive or not? Wait! You be the buyer. Would you buy a home not knowing whether the golf course behind you will survive or not? Would you buy a home in a development with an HOA in full battle dress over the plight of the number-one amenity? Which adds another question: What is your home worth if nobody will buy it?

So, both sides have the value of their property at stake – especially during the uncertainty period. I believe higher end golf course residences have far more to lose than more numerous lower priced residences. Sorry, but nobody seems to have useful data to back up my assumption.

First of all, I believe the higher the price of the homes in a golf course development, the more they have to lose both percentage wise, and in real dollars if the golf course closes. A $1 million dollar home could drop 50% or more if its upscale golf course amenity fails.  However, I don’t believe a $200,000 home will lose more than 20% if the course closes. In fact, homes that do not have golf course exposure in a lower priced golf neighborhood may actually become more valuable than the ones backing up to a weed patch that was once a pretty green golf course fairway. I believe too, since there are many more lower priced golf course residential properties around a community golf course than upscale developments individual homes would be less vulnerable collectively by the loss of the golf course. Based on my assumptions, I believe saving a golf course is more important for high-end neighborhoods than ‘average’ priced golf neighborhoods.

Then, I have further for arguments with the high priced home owners: If you don’t play golf and don’t care about the golf course, why would you buy a home in a golf course community? Secondly, if you can afford to own a home in an upscale golf course community you’d better be prepared to pay whatever it takes to maintain the full integrity of the neighborhood, whether you play golf or not. Unfortunately, golf course communities that do not have covenants that protect the golf course via HOA financial support have a tough road to haul. Attorneys will line up for that fight all day lng!

I spoke with and HOA board member recently who outlined exactly the above dilemma. Only 230 upscale homes trying to support an ultra-high end golf course. Classic: The non-golfers say, “Let it grow in!”

If the upscale neighborhood golf course grows in (fails) I believe home values in that neighborhood could plummet 50% or more (my assumption only). I say that, because with a failed amenity (the golf course) the overall development becomes known as a failed neighborhood. Nobody wants to own a home in a failed neighborhood.  Ask yourself, “Would you?”

I know it can be expensive to keep up an upscale golf course with 12-foot green speed maintenance demands. But if homes in the neighborhood are $1 million plus value with a golf course in the back yard they need to come to grips and pay what is needed to keep the golf course alive. It’s an insurance policy on the value of your property. If you have to pay $5,000 a year to belong to the golf club to avoid a $500,000 drop in the value of your home, I would call that a pretty good investment.  

Hey! If you can afford a $1 million dollar home, you can afford to contribute to the integrity of your neighborhood – golf player or not.

By the way, I get calls from everywhere, for instance: Wyoming, Montana, North Carolina, New York, Virginia, Georgia, Wisconsin, Alabama, California, Florida… well, you get the point. Remember, the first consultation is free. 

Any comments?

Mike