Mandatory Membership Fees in Golf/Country Club for Homeowners

One of our ArrowCreek homeowners posted this on our ArrowCreek411 Facebook page. I attached it to one of our earlier blogs, BUT YOU NEED TO READ THIS! It will give you more things to think about – how what ArrowCreek decides to do with its golf courses might/will affect you personally.

Abstract: There is a trend sweeping the private club industry in Florida, mandating that all  homeowner association members pay initiation fees and dues to the private country club in their housing development. So-called “mandatory membership fees” are an attempt to  eliminate, or at least reduce, a free-rider problem concerning the financial health of ailing private country clubs.

The Moral Hazard of Mandatory Membership in Private Clubs

This entry was posted in ArrowCreek Community Club, CIC Governance, Golf Industry, HOA, Land Value Study, Mandatory Membership, Not-For-Profit vs For-Profit, Principal-Agent Problems, Property Value and tagged , , , , , , , , . Bookmark the permalink.

4 Responses to Mandatory Membership Fees in Golf/Country Club for Homeowners

  1. Dec 11, 2014

    Folks,
    There are alternatives to homeowners owning the golf course, while preserving our property values and making ArrowCreek a wonderful place for families, retirees, golfers and non golfers to live.

    Next Monday, December 15 and Wednesday, December 17 at 1:30, and Saturday, December 20 at 10 AM and 1 PM in the Residents Center meeting room we will show a thoughtful Power Point, followed by discussion and Q&A.  90 minutes should be sufficient.

    Please try to attend.  Invite your neighbors.  It shouldn’t matter if those leaning toward GC purchase attend.  Our intent is raise questions, seek answers, express concern, and get people thinking and informed.

    Ask yourself: should a large majority of owners who don’t golf, subsidize the expensive hobby of the small minority who do?

    If you can give me an idea of your intention to attend, please do so, and tell me which day.

    Thank you,

    Wayne Krachun    851-4654

    Like

  2. Another ArrowCreek resident sent along this note:
    It is an excellent article.
    Everyone, please take two minutes to read the Conclusion, at the least.

    Like

  3. One of our ArrowCreek residents offered a definition of what a moral hazard is:

    A moral hazard is when one person or group of people have a tendency take on more costs or risks because someone else is footing the bill. This typically occurs when the people receiving a benefit are not those paying the full cost of that benefit. An example in this case would be a higher level of service, nicer furnishings, improved field maintenance, etc. which is enjoyed by golf club members but non-member HOA dues payers who are subsidize the bill. In such situations the general trend is for greater expense than would occur under normal market forces. An additional common characteristic of moral hazard is asymmetric information. Those receiving the benefit are frequently those who have the greatest amount of information, but they have an ongoing incentive to keep others who do not receive as much benefit but do subsidize those benefits in the dark.

    An everyday example of this is a politician enacting a law which subsidizes some subset of voters in order to gain their votes. The politician receives the benefit (votes), whereas the taxpayer pays the bill.

    Like

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