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Governance

WHAT IS GOVERNANCE

Governance is the practice of determining how rule-making occurs. It is the social environment in which people participate in public affairs, both formally and informally. There is a difference between governance and management. Management refers to individuals or groups of people who are given the authority to achieve desired results. Governance systems set the parameters under which management and administrative systems operate. Source

WHY DOES THIS MATTER?

Proper governance is the basis for any strong organization. How rules get made changes what rules get made. Proper governance ensures that sustainable policies are not just created, but that they are carried through and lead to their desired results. In 1998 Elinor Ostrom published Managing the Commons, which outlined ways that different communities have maintained shared resources for generations. Traits like collective- choice agreements, rules that match resource conditions, and low punishments for first time rule-breaking enable people to get past differences and promote common values.

BENEFITS

Establishing appropriate governance rules can ensure conflict resolution and increased engagement of marginalized stakeholders by allowing for people to be heard. It also increases adaptive capacity, improves economic development, and enhances livelihoods. By being evidence-focused and based on residents’ values, proper governance ensures that the rules benefit those people and reflect their lived realities More Information

BENEFITS

Effective governance is a continuous process of learning by doing. By establishing an adaptive strategy, the goals of an HOA are made clear to residents, as are the methods to achieve them. Metrics are chosen to indicate success, and strategies are crafted based on what improves those metrics. Adaptive management allows residents to partake in the scientific process, becoming experts of not just their units, but of the entire community. Source

THE PROCESS

  1. Establish Context; Understand what your HOA is responsible for (found in the governing documents), what resources are available, and what rules you need to follow (Colorado HOA Statutes). Contact local experts and get many different perspectives on potential problems as possible.
  2. Establish goals; This is where communication and input from residents is invaluable. What do residents want out of the community? What do they currently like about the community? What issues do they have? What are they unhappy with? Don’t just get input on problems, get input on solutions. Making residents a part of the decision making process forces them to consider all of the factors involved in a decision, not just the issues they care about. (See Community Resource page for more information on gaining feedback from residents.)
  3. Select indicators for success; Select indicators and set targets that align with resident values and are possible to achieve (Learn more: Setting achievable goals). The indicators we recommend HOAs use to track sustainability (as outlined in other resource pages) include: resident well-being, amount in reserve fund, energy use, water use, waste audits, commute time and satisfaction level, and biodiversity within property.
  4. Monitor Progress; You can’t effectively evaluate what you don’t measure. Regularly collecting and presenting updates on selected indicators keeps leaders accountable and informs what strategies do and don’t work.
    5. Learn More

AMENDING GOVERNING DOCUMENTS

The governing documents that guide life in an association should reflect residents’ lives, values and the reality of living in the association. Amending governing documents can be an expensive and time-intensive process that will almost always require the assistant of an attorney. But like most sustainability projects/transformations, it can quickly lower costs for long-term savings. Amending documents can make sure they are current with changing laws, and allow flexibility needed for the HOA to remain adaptive and resilient. A review to determine if documents need to change should occur every 4-5 years, more often if the association has to continuously (more than 3 times a year) consult an attorney for interpretation, or if the association regularly fails to meet or enforce document requirements. A wishlist with all of the association needs and issues will be more useful than picking the problem of the week.

TYPES OF DOCUMENTS

In order from easiest to hardest to amend, here are the different documents that determine rules in community associations. What is laid out in the documents and the procedures for changing them are specific to each association, but generally, associations follow these:

RULES, REGULATIONS, GUIDELINES, POLICIES

Clarify processes/protocols for how board members conduct business in accordance to the “higher order” documents. Can usually be amended by boards unilaterally. Colorado Law requires associations to have 9 specific policies in place. (Link)

BYLAWS

The “Operational Bible” of the association. Most important documents for boards. Can be amended by owners or board, depends on specific rules. Typically includes: how to hold meetings, keeping records, and voting protocols.

ARTICLES OF INCORPORATION

The “birth certificate” of the association. This is what legally defines the organization. Only major changes to the legal structure of the association, like transformation into a cooperative, will be changed through the Articles of Incorporation Learn More

Small Changes to Governing Documents

Sustainability Resolution
Anti-discrimination Policy
  • Your anti-discrimination follow federal and state laws, but it can go well beyond that and lead your HOA to becoming truly inclusive.
  • Policies preventing discrimination, like robust communication and conflict resolution, decrease the number of discrimination claims (Source) (See Community Resource Page)
  • Example policy and more information
  • Building Inclusive Communities
Retention/Destruction of Records
  • It’s important that documents are retained for as long as they are foreseeably relevant, but storing and sorting through documents (even digitally) can takes space, time, and money.
  • Having a stated policy on how long specific records should be maintained prevents accusations of tampering with evidence while finding this balance.
  • Learn More
Appropriate timing and escalation of enforcing regulations
  • One of the key principal from Managing the Commons is “graduated sanctions.” A lot of rule-breaking happens opportunistically as one time occurrences, so there is little use in harshly punishing these rule-breakers. Only repeated offenses should face steep repercussions. Helping people follow rules will lead to much fewer violations than punishing rule-breakers
  • Alternatives to fines
Architectural Guidelines
  • Consider limiting architectural guidelines to those that ensure improved sustainability rather than those that ensure uniformity. Guidelines like using smart irrigation, LED lights, and materials with “low-embodied carbon” help the planet and potentially save homeowners money in the long term.
  • Learn more
Allow necessary flexibility of meetings
  • Remove limitations on annual meetings so that it can be held when community members are available
  • A simple amendment to allow the board to select an appropriate date for the annual meeting can allow this flexibility.
Grow or shrink the number of board members to fit the association

SUSTAINABILITY COMMITTEE

A Sustainability committee, also called a “green team”, brings together the most sustainability-focused and impassioned members of a community association to lead and be responsible for sustainability projects. Chartering a standing sustainability committee helps HOAs research and understand sustainability projects while freeing the board to focus on their primary responsibilities.

REINCORPORATION: COHOUSING, CO-OPS, LAND TRUSTS, ECOVILLAGES

There are many ways a community can organize itself. If a community wants a complete re- start, if it’s governing documents are completely out of line with the community’s values and goals, it might be worth considering a reincorporation away from the traditional HOA model. Different forms of incorporation include:

Cohousing: A structure that focuses on informal social support, consensus-based rules, and “circles” rather than rules, boards, and committees, cohousing has a lot of evidence indicating that it improves physical and mental health as well as quality of life. Cohousing is increasing seen as a way to accommodate aging populations.

Cooperatives (Co-ops): In co-ops, residents own a share of the entire building complex. This can lead to major changes in governance, sustainability, and affordability. Co-ops tend to have a vetting process for new owners, allowing them to pick residents and enabling more values-based communities.

Community Land Trusts (CLTs): CLTs were specifically designed in the 1970’s to promote lasting affordability and racial integration. They do this through a limited/shared equity model that allows them to restrict how much units within the CLTs can be sold for.

Ecovillages: Ecovillages seek to harmlessly integrate human activities into the natural world not only through governance but through arcology (architecture+ ecology). Through this, they help promote 4 dimensions of sustainability (social, culture, ecology and economy).