Americans hate HOAs. Why do so many people live in them?

It’s February. I am sipping a mint julep and pretending that summer has arrived and quarantine is over when my friend, who we’ll call Mary, sends me a question over Discord. “Why,” Mary asked, “is every house I could afford to buy located in an HOA?”

It’s a good question. Mary, 30, is a millennial, and above all the other things it means to be a millennial she is struggling with the complexities of obtaining a mortgage while still paying off student loans. The average millennial has a net worth of around $8,000 while, in Q1 2021, the median U.S. home price was $347,500.

Of course, your first home isn’t your forever home. It’s your “starter home.” The concept is that you buy a one- or two-bedroom home and use the equity you gain when you sell it to buy a larger home for your growing family.

Starter homes probably doesn’t exist anymore for a number of reasons. One of those reasons is the huge number of homeowners who were forced to downsize during the 2008 recession, essentially going back to their “starter homes” with wrecked credit that precludes them from upgrading in the near future. Another reason is that millennials tend to put off homeownership during the ‘starter home’ phase: as 20- and 30-somethings have kids, they do so in their apartments, unable to move into starter homes because of the $38,792 in student loan debt that American students carry on average.

“Unfortunately, Mary,” I explained, “you’re probably going to be stuck in an HOA, and not in the dream house in the suburbs you want.”

She laughed. “Oh, I don’t want a house in the suburbs. My real dream is a little intentional living community, like a commune, I guess? Like, a big farm, with tiny homes, and we’d all kind of vote on how the place ran.”

I paused.

“Mary, that’s an HOA.”

In the early years of the twentieth century, a group of residents in a rural area outside Los Angeles formed the Arroyo Seco Improvement Association. Their aims, as described in the Arroyoside Forum in 1911, were “working out local problems in the Dayton Avenue district near Avenue 20.” Many neighborhoods around L.A., like the Dayton Avenue district, were built in one go, with residents then responsible to convert these new neighborhoods into communities.

These early organizations were more like advocacy groups and often lobbied to have their communities included into, or excluded from, nearby cities. They also sometimes organized neighborhood activities. But they didn’t have authority.

As planned communities were built across the country, many were subject to deed restrictions designed to keep out people of color, Jewish people, and renters. Neighborhood associations in these communities would take on vigilante policing duties, keeping a watchful eye on residents suspected of subversive activities. Associations wanted the power to do something about these undesirables and the answer came to them from the most surprising place.

But first: what was the point of restrictive covenants?

Detroit residents placed this sign to face a federally-backed housing project in 1942.

Between 1915 and 1960, some five million Black Americans moved from the southern United States to the north and west. The vast majority of them migrated to major cities: Chicago, Detroit, New York, San Francisco, Oakland. The north had factories, particularly during the world wars, and the economic opportunities were far greater in the north and west than in the south where racial segregation was widespread.

White families in the north were nervous about the arrival of millions of Black southerners because, uh, the absence of racial segregation in the north didn’t mean the absence of racism in general. But the economic prosperity caused by this Great Migration, and the basic tolerance that was foundational to the northern and midwestern states, meant that Black families found the north and west to be, if nothing else, more hospitable than the south.

Plus, Black residents found cheap rentals in inner-city areas. Why? Because white families were moving out of the cities in droves. They moved to suburbs where they could realize the dream of homeownership and live in perfect little neighborhoods.

This shift, commonly known as White Flight, is sometimes painted as an act of racial reactionaryism. The story goes that, as Black residents moved in, scared white families headed for the hills. In reality, the shift towards suburban life was more about space and individualism; Black families moved into cities that were already being vacated by white residents.

No, the racism wasn’t White Flight. The racism was that those white families moved into suburbs with restrictive covenants designed to keep Black families out. Many prospective homeowners wanted to live in all-white neighborhoods, so the introduction of nonwhite families meant a decrease in home values, something even the most tolerant white homeowner could not abide.

The problem is that it isn’t just nonwhite folks that can bring down property values. The wealthiest buyers want to live in perfect communities. They want perfectly manicured lawns and perfectly painted homes. A rusted Toyota Celica in the driveway brings down the house value for everyone.

Enter the Clean Water Act of 1977.

The Environmental Protection Agency spent many of its early years trying to explain to Americans the environmental problems the nation faced – and, in turn, trying to justify its continued existence. Formed in 1970 by the Nixon administration, there was a general feeling that the public was only temporarily interested in environmentalism and that the agency would be dissolved after a few years. To make sure that didn’t happen, it began the landmark DOCUMERICA  project.

DOCUMERICA sought to capture the environmental state of the country by hiring photographers and photojournalists who would take photos both of natural areas and industrial areas around the country.

The scenes captured by DOCUMERICA were stunning, particularly for Edmund Muskie.

Born in Rumford, Maine, Muskie had lived his whole life on the shores of the Androscoggin River. He was aware that the river was polluted, but was stunned to see the magnitude of the problem. He also happened to be a United States Senator and so he introduced the Clean Water Act to regulate what could and couldn’t be dumped into public waterways. The act was passed in 1972 and amended several times, notably in 1977.

It’s the 1977 amendment that obligated new real estate developments to manage their stormwater runoff and that, in turn, created the modern homeowner association.

Developers would create a new community and designate one part of the community to be a park and it would be here that the community’s stormwater runoff system would be located. Then, the community would be organized into a homeowner association, and its primary job would be to manage the park and stormwater facility. Towns realized that HOAs could be responsible for their own roads, which would take the burden off the town. HOAs took over trash and recycling duties, too. Some created more lavish parks with pools, tennis courts, and a community center. In the fifty years since the Clean Water Act, HOAs have evolved into little governments with a vast array of duties. To pay for their obligations, HOAs can levy fees and assessments and, in many states, fines for noncompliance.

“Those who join [an HOA] can bypass the public system: homeowners who fear crime do not have to vote for tax dollars to attack the root of the problem; they can build a gate to keep the criminals out. Opponents maintain that the erosion of public support, reflected at the ballot box, leads to further deterioration of municipal services and reductions in local revenues. Nonmembers experience a reduction in public service levels and may be worse off. At the extreme, homeowners associations may contribute to sentiments of secession and withdrawal from the public sector.”

Ron Cheung, “Homeowners Associations and Their Impact on the Local Public Budget”

HOAs emerged as a competitor to the public weal. An HOA is a microcity supplying public services to a private audience. If the folks want a pool, they can have a pool. In an HOA where a majority of voting homes can afford a higher assessment, they can hike the monthly HOA fee for no other purpose than to drive out lower income residents. The democracy of the HOA is also its worst trait, because HOAs rarely have protections for the minority. Those who oppose the HOA must fall back on conventional laws and that doesn’t always work out.

For example, it’s 2021 and an HOA can’t ban Black residents (haha, just kidding). It could, however, prohibit “Black Lives Matter” signs, as a Texas HOA did in 2020, or outlaw basketball hoops, as a Baltimore County HOA did in 2021.

Wealthy HOA residents often demand services far beyond what they might expect the city to provide, such as expansive swimming facilities, public gardens, or on-site schools. And once they have those things, a 2009 study by economist Ron Cheung noted, they vote against any public services for the non-HOA parts of town. HOA residents “can bypass the public system: homeowners who fear crime do not have to vote for tax dollars to attack the root of the problem; they can build a gate to keep the criminals out. Opponents maintain that the erosion of public support, reflected at the ballot box, leads to further deterioration of municipal services and reductions in local revenues. Nonmembers experience a reduction in public service levels and may be worse off. At the extreme, homeowners associations may contribute to sentiments of secession and withdrawal from the public sector.”

Nearly 74 million Americans live in a community with some form of homeowners association. California alone has 49,200 HOAs, more than 10% of the 354,000 HOAs that exist nationwide. Florida is close with 48,000 HOAs. Both states are known for their rapid expansions – California’s in the latter half of the twentieth century, Florida’s right now.

Maybe more surprising is that 70% of residents say their HOA is “good” or “very good.” Surprising because, well, here’s what the internet has to say:

In 2018, AARP dug into the question of whether people really like their HOA or not and came to a pretty clear conclusion: they do, if they’re AARP members. Boomers were way more likely to approve of their HOA than Millennials and Gen Xers.

A lengthy reddit thread in 2020 showed just how frustrated younger homeowners are with HOAs. And yet the number of people in HOAs keeps growing every year.

Condominiums and townhouses tend to be less expensive than free-standing homes. In these structures, an HOA is necessary not just for amenities or stormwater but because the walls and roof and shared with your neighbors.

In my local market, the median home sold for $328,900 in 2020. The median condo sold for $260,000. That’s a whopping $68,900 less. If you’re a millennial on an FHA first time home buyer loan putting down 3.5%, that’s putting just $9,100 down instead of over $11,500. It’s not hard to see why condos and townhouses might be popular with younger buyers. Sure, that $2,400 difference isn’t huge, but the average millennial has just $5,000 in their savings.

Without lower-value single family homes to buy, younger home buyers sway towards condominiums and townhomes. New construction, on the other hand, comes almost entirely in the form of single-family homes – and almost entirely developments, with HOAs built right in. Picking up a piece of land and building your own new construction is viable in rural areas but in suburbs most of the land is already spoken for or priced for developers to buy, not individuals. That’s forcing people into HOAs they don’t necessarily want and contributing to a national epidemic of poorly-run homeowner associations.

So is Mary’s problem the concept of the HOA or the execution of the HOA? She wants her intentional living community, one that by its very nature comes with common areas that require democratic institutions to manage – like an HOA. But she also wants to preserve individual identity and free expression. Can these things co-exist?


An HOA is what you and your neighbors make of it and the secret to having one you like might be to get in at the ground floor. Most HOAs use bylaws written by the developer who built the neighborhood. Residents in HOAs often don’t want the hassle of being responsible for the community, which empowers the worst elements to become HOA president.

Mary’s commune model, though, could incorporate the community’s ideals into the bylaws. As new members buy-in, they would understand that they were buying into the community’s ideals, too. Just as HOAs can function as a way to privatize public services, in communities with limited public services HOAs can provide services the rest of the town won’t offer. There are ways to make the HOA model work, but it’s not hard to see how so many people feel trapped in, and unable to rework, the HOAs they’re in.