Day 5: HOA Bans and Municipal Ordinances - Every New Rule Is a Gift to Operators

Hey, welcome to day 5 of the Boatin' RV 100 series. I'm Joe Downs with Storage Moguls, and today I'm showing you how local governments and homeowners associations are inadvertently building your waiting list for you and why the regulatory trend is one-directional and accelerating. This is in theory. We track this across target markets and it changes how we evaluate every deal. And if you want the full market selection framework with AI-powered tools, You should head over to storage mobiles dot ai. It's our free community with GPT tools, multimodal learning, and content across every storage vertical and niche. And that's exactly why we built Storage Mobiles. It's a community that's made up of real people, actual operators just like you or just like you want to be. We've got the husband and wife team, the two neighbors who partnered up, the two brother-in-laws who always kicked around a good idea, the solopreneur who. Decided to stop playing small. Folks, nobody here is selling you a fantasy from a stage they haven't stood on in years or from behind a microphone when they haven't done anything. We're, we're a network that actively evaluates real deals. We're talking about acquisitions under $2 million. They're financeable, digestible, the kind of deal that someone with a W-2 and a serious mindset can actually close. And we're about real results. Members in our community are becoming storage moguls. Not someday, now. And we're operators. We're not just preachers. We teach underwriting at night because we do it during the day. That's what we do at Storage Moguls. So check out storagemoguls.ai. You can register now. You can join for free. You can level up at your own pace. And if you— I think there's still some— I said the first 500 during the Storage 100 series, first 500 to register, we You get a free GPT, deal analyzer GPT that we built for ourselves and we use. And I believe we still have some left, so don't hesitate. I think we're running out. I don't know how many are left, but I'd get on it if I were you. StorageMoguls.ai. All you can do right now is register because we're launching in a couple weeks. So go ahead and register. All right, back to today, because if you're not paying attention to HOA density and local ordinances when you're picking markets, You're leaving one of the most valuable, reliable demand signals in this vertical on the table. Here's what's playing out in neighborhoods across the country right now. HOAs are banning outdoor storage of boats and RVs, and that's no surprise. That's not new, but it's also not going backwards. It's, that's a trend that's not reversing. Yeah, it's not happening everywhere, but, but in increasing numbers of communities, the rules prohibit keeping a boat in the driveway or the old RV on the side of the house. Which we've seen many places. Homeowners who bought a boat or an RV fully intending to store it at home are getting letters now. Municipalities are adding to it as well. Overnight street parking for recreational vehicles is prohibited now in a lot of cities. Newer subdivisions have zoning codes that restrict outdoor storage by default. The regulatory environment is tightening, not loosening. My line on this from the source material is exactly right. Even if you want to store it at your house, They're moving against you. That's the reality for a growing segment of boat and RV owners, and every one of them is a potential tenant. Here's why I call every— or yeah, here's why I call every new HOA ban a gift to operators. Let me say that again since I fumbled it. Every new HOA ban is a gift to you, the operator. The HOA letter arrives, the homeowner typically has 30 to 60 days to remove the boat or RV from their property. And what do they do? They don't sell it. They love it. Selling the boat because of a neighborhood rule is not how this plays out. They find storage. They call the nearest facility. In most markets, that facility has a waiting list, so they add their name to it. They pay a deposit and they wait, and they get fined in the process by their HOA. And when a space opens up, They move in and they stay because moving a 35-foot RV to a different facility is kind of a hassle. Switching costs are high. You're learning a new facility. It's a pain in the neck. That's forced demand. And forced demand is the most reliable kind. These tenants aren't comparison shopping on price necessarily. They're not necessarily thinking about switching either. They have no other legal option for storing their vehicle. That's the occupancy floor that you're going to build on. Every new ordinance, every new HOA rule, every new municipal ban adds more tenants to the pool permanently because the regulatory trend is one directional. It doesn't reverse. Let me make this concrete and with a real market as an example. So in dense HOA markets like suburban Boston, I like to use this example because I know some people up there. The waiting list at a boat and RV facility can run a year or longer, not weeks, a year. That's a tenant signing up in September and being told they might get a space by next September. So why does this happen? Well, the conditions are stacking on top of each other. So you have high HOA density means a large percent of homeowners in the area can't store at home. They're forced into the market. Proximity to waterways means there's a deep base of boat owners who need seasonal storage. And in cold climates, the fall move-in rush is intense. Everyone wants in at the same time. When those 3 conditions align, you get your year-long waiting list. And a year-long waiting list tells you one thing: you can raise rents, you can be selective about tenants, and you can still be full. That's the market you want to operate in. So how do you use HOA density and municipal ordinances as a market selection tool before you spend a dollar on due diligence? I'm going to tell you. Step 1, look up your HOA penetration in your target market. What percentage of housing units are in an HOA-governed community? In some suburban markets, it's 40 to 50%. In others, it's under 10%. You need to know. Higher percentage means more forced demand baked into the market structure. That's good for you. Step 2, pull the municipal code. Most cities publish outdoor storage ordinances online. Search for recreational vehicle, watercraft, outdoor storage, something like that. Search for all of them. 5 minutes will tell you whether or not the regulatory environment is working for or against you. Step 3, call some existing facilities in the market. Ask if they have any spots. Ask how long their waitlist is. This is the most direct signal available. A facility with a year-long waitlist is telling you that demand dramatically exceeds supply. And you haven't even looked at a deal yet. Step 4, check Nextdoor or— and/or actually local Facebook groups. HOA enforcement activity shows up in real time when people are bitching and complaining about it on those sites. Posts about boats being told to move, RV owners looking for storage recommendations, that's live forced demand being created right now. And then step 5, talk to a dealer. They know which customers got letters. And where they went. One question worth addressing directly though, could this trend reverse? Could HOAs start allowing outdoor storage again or municipalities repeal their RV parking restrictions? Yeah, in theory, sure. In practice, no. HOA restrictions on outdoor storage tighten over time as communities get denser and neighborhood— and neighbor complaints increase. Remember, 1 in 10 households owns a boat or an RV. That means 9 out of 10 don't. They don't loosen. Municipalities adding RV parking bans are responding to constituent pressure from homeowners who don't want vehicles parked on their streets, which is most of them. That pressure doesn't go away. New construction, the subdivisions being built right now, increasingly includes HOA governance with Outdoor storage restrictions baked in by default. The new housing supply is creating new forced demand automatically. And here's the part that makes it this particularly durable. There's no one organized, or there's no organized opposition, right? No one's running for city council or the HOA board to repeal RV parking ordinances. No HOA insurgencies is fighting to allow boats in driveways. It's the opposite. These rules pass quietly and stay permanently. Every year, the regulatory environment gets a little more restrictive, and every year, a few more boat and RV owners need commercial storage. That's the demand pipeline you're investing into. Let's connect this to your underwriting, because HOA density isn't just a qualitative market factor. It changes your occupancy assumptions and your pricing power in ways that affect your valuation. In a low HOA density market with no municipal storage bans, your tenants have alternatives. They can store at home. Your occupancy ceiling is lower and your ability to push rates is limited because you're competing against a free option. In a high HOA density market with active enforcement, a significant portion of your demand is forced. Those tenants have no home storage option. It's not allowed. Your stabilized occupancy ceiling goes up. 92% to 95% or better is realistic now. And your pricing power is stronger because you're not competing against the driveway. In the best markets with a dense HOA coverage, waterway proximity, active enforcement, you can realistically underwrite a waiting list. That's maximum pricing power. You're not discounting to fill spaces. You're managing who gets in. This is quantifiable input in your pro forma. The regulatory environment in your target market is worth spending an hour on before you even look at a deal. All right. Here's the frame I want you to leave today's episode with. HOAs and municipalities aren't your competition. They're your demand generation engine. Every letter they send to a homeowner with a boat in the driveway is a lead for your facility. Every new ordinance is a permanent addition to your demand pipeline. You didn't build that pipeline. You don't have to maintain it. You just have to be in the right market with a good facility when those letters— 3 things to take away from today. First, pick markets with high HOA density near waterways. That's where forced demand stacks on top of organic demand. Second, track the ordinances, new bans, And are demand signals, and they show up before the demand shows up at your gate. Third, underwrite accordingly. The regulatory environment is a quantifiable input in your pro forma, not just a qualitative factor. All right, tomorrow, day 6, we're gonna shift to the capital side of this equation. Why the REITs haven't arrived in boat and RV storage yet, and what happens when they do, and what that window looks like for operators right now. All right, please like and subscribe so you never miss a demand signal that's hiding in plain sight in your target market. And finally, share this with someone who owns or is buying a boat and RV facility in a high HOA density market and hasn't raised rates in 2 years, or don't try to buy from them. And remember, the best marketing campaign you never had to run is this HOA letter your future tenant just received. Be in the right market, run a good operation, and the regulatory environment will build your waiting list for you. For more ways to maximize your self-storage facility or boat and RV facility, you should consider joining Storage Moguls at storagemoguls.ai. You can start for free and level up at your own pace. And if you register soon, like I said, you'll get that free GPT we built and use ourselves. So join us at Storage Moguls and we'll transform, transform you from someone interested in boat and RV storage into a storage mogul that you'll see the world, the storage world differently soon enough. See you tomorrow.