Privatopia: Homeowner Associations and the Rise of Residential Private Government
Since it was first published in 1994, Privatopia remains the most comprehensive scholarly work on the subject of homeowners associations. The author, Evan McKenzie, was a HOA attorney and is now a professor of political science at Albright University.
Below are some interesting excerpts arraigned by chapter; anyone truly interested in this subject will find the book at Amazon, Barnes & Noble, or Borders. It's quite possible that the population of Common Interest developments throughout the country would be greatly reduced if homebuyers were required to read this book before they purchased their homes.
As CIDs spread, consumer choice
is increasingly restricted. Americans who wish to purchase new housing are going
to be living in CIDs, and under the rule of private governments, regardless of
To many residents, association
boards often seem to operate as though wearing blinders, rigidly enforcing
technical rules against people’s use of their own homes and ignoring the
consequences of such intrusive behavior. The CID resident must choose between
conformity and conflict.
The CC&Rs are a system of
deed restrictions that are written into the deeds of all homes. Deed
restrictions date back to medieval England. They permit a seller of land to
retain control of how the land is used after it is sold.
In a variety of ways, these
private governments are illiberal and undemocratic. Boards of directors operate
outside constitutional restrictions because the law views them as business
entities rather than governments. The courts accept the legal fiction that all
residents have voluntarily agreed to be bound by the covenants by virtue of
having bought a unit in the development.
Over the past two decades, the
professionals who build and service CIDs have become a significant force in
interest group politics in many states. To a large extent, they have been able
to shape legislative and judicial policy making, prevent meaningful regulation
of CID activity, and keep the discourse on such matters largely private.
Instead of communities evolving
through decisions made by the people who live there, the look and feel of
communities is predetermined by developers who plan, build, and restrict from
Deed restrictions are intended
to protect property values¾a
rational that remains the most common justification for the loss of freedom
inherent in a development run under a regime of restrictive covenants.
Homeowner’s associations are
privatized versions of the council-manager system of government.
Due to the serious problems of
developer and homeowner association mismanagement and fraud that developed in
the early 70s, the National Association of Homebuilders and the Urban Land
Institute established the Community Associations Institute (CAI). The mission of
the CAI was to professionalize the governance and management of homeowner’s
associations and to convince the public that this was a better way to live.
The twin devices of restrictive
covenants and homeowner’s associations favor the developer in almost every
Because a developer generally
doesn’t see a profit until the last 20% of the homes in a subdivision are
sold, they want to maintain complete control of the development.
In 1973, the press was
beginning to focus on disturbing events that tended to undermine the public
image of CID housing.
CIDs existed because it made
enormous economic sense to builders, not because buyers were aching for smaller
lots, shared swimming pools, and neighborhood governments. The developers’
agenda of land-use economics needed to be translated into another language so
that consumers would embrace the idea of CID housing;
had to be sold on the concept.
The CAI is a private government;
sort of private legislature for a nation of private governmental regimes.
The CAI has no intention of
abandoning its public image as something more than a trade organization and it
clearly wishes to retain the credibility resulting from that perception. The
organization also wishes to maintain as much control as possible over the public
discourse concerning CID housing.
In 1992, the CAI was
restructured and largely taken over by property managers.
This new structure shifted
emphasis toward legislative advocacy and other forms of political action
including grassroots mobilization of its thousands of members at the national,
state, and local levels.
The ideal was that of
self-governing local communities living the fantasy of the New England town
meeting. The reality, too often, was an undemocratic oligarchy in which an
apathetic body of residents was governed by a few dedicated or overly zealous
neighbors who were for the most part told what to do by property managers and
The term condominium
refers not to a kind of building but to a kind of ownership. The property can be
apartment like or single-family detached homes. Condominium ownership means that
each buyer purchases an undivided fractional ownership interest in the common
area as well as their individual unit.
Neighbors eventually will be
running one another’s lives, without any minimum requirements of education,
experience, or professional competence.
Charges of violations are made
and heard by the Board. Their are no policies that separate the roles of accuser
and trier of fact or that call for the empanelling of an independent, impartial
Board members are routinely
advised to be extremely aggressive and inflexible in the enforcement of the
CC&Rs, a practice that produces enormous hostility against boards on the
part of those who are censured and fined.
People who willingly volunteer
to undertake such tasks often are motivated by a strong sense of community
responsibility. But these positions also offer obvious benefits to those who may
wish to be on a board or architectural committee to enjoy the perceived pleasure
of wielding power over others. Those of an authoritarian bent have strong
support from CAI and attorneys and managers who advise boards to behave in a
harsh and even threatening manner in rule enforcement.
Covenant enforcement litigation
has become a profitable legal specialization for attorneys in states with many
CIDs. In many cases, the attorney who advises the board on whether to file suit
will handle the litigation and receive substantial hourly fees, raising the
question of whether legal advice in these matters is always as disinterested as
it should be.
It is a peculiarly American
form of private government in which the property rights of the developer, and
later the board of directors, swallow up the rights of the people, and public
government is left as a bystander.
Children raised in HOA housing may be undergoing a form of differential political socialization. There will be a difference between being raised in a real city or town and growing up in the artificial environment of a typical common interest development. What’s being forgotten is that it is our culture that is being shaped, not just housing. We have a generation in this country that doesn’t know you should be able to paint your house any color you want.
To offer green open spaces and
other facilities while keeping population density high, developers created
common ownership arraignments. These arrangements required ongoing management
and maintenance. Cities and counties expressed no desire to undertake that
responsibility, and developers had no interest in subjecting themselves to a
greater degree of involvement with government regulation, so residential private
governments evolved as the standard approach.
Although millions of Americans
have purchased units of CID housing, they have done so without realizing that
they were to become part of a collective decision to privatize local government,
and without knowing the implications of that decision.
The individual CID resident is
exposed to treatment that would be unconstitutional had these government
functions not been privatized. The deregulation of governmental powers to
private entities was done without adequate provisions for accountability.
Nowhere is this more apparent than in the reliance CID housing has on untrained,
unregulated, volunteer directors.
The way the CID directors perform their role is perhaps the most critical variable in the success or failure of CID housing. It is a unique form of privatization that places the fate of the experiment in the hands of untrained, uncompensated amateurs; establishing no qualifications for their participation; creating no public institutional support structure for on-the-job training; and leaving the directors essentially free from public regulation, increasingly with immunity from private regulation through lawsuit.