America's plague of tyrannical homeowners

Florida is trying to crush the local dictators ruining homeowners' lives. The rest of America should follow suit.

Someone picturing their local government might imagine a Norman Rockwell-esque portrait of a small-town mayor and a collection of other humble public servants. Or they might see a corrupt political machine governed by men in smoke-filled rooms. But no matter the form these local institutions take in one's mind, in most cases, people take "local government" to mean a public entity — whether it actually serves the public or not.

But not all local governments are public entities. Millions of Americans live in neighborhoods with their own forms of local representation, taxation, and public service provision. These private quasi-governments are called homeowner associations, or HOAs.

An HOA-governed residential area may comprise just a few homes, or it may be a sprawling empire of thousands of households. Either way, anyone who buys property in HOA territory becomes a member of the association, with all the rights and responsibilities that implies. The benefits of HOA membership may include access to shared goods like trash collection, well-paved private roads, and landscaped common areas. Members may pay dues or be subject to strict regulations that limit their property rights. Even if the costs outweigh the benefits, HOA members tend to be stuck with them — unless they move away.

Nowhere are these miniature states more prevalent than in Florida. While California has the most HOAs of any state (50,000), Florida has far more HOA residents as a percentage of its population. A little over a third of Californians reside in an HOA-governed community; close to 45% of Floridians live under one of the state's estimated 49,420 HOAs.

A new state law, signed by Gov. Ron DeSantis last month, is a long-overdue effort to protect individual property owners from the most power-mad of these quasi-governments. The law limits the extent to which HOAs can regulate and penalize decisions by individual households; as The Guardian put it, the law is about "curbing the Karens." HOAs will no longer be able to set draconian rules about parking, leaving garbage cans at the curb, or growing a vegetable garden, and the rules they do set will have to be more transparent. In addition, HOA board members will receive mandatory training.

The bill's introduction was likely prompted by a prominent embezzlement case involving the board of one Florida HOA, but owners have long been frustrated with HOA rules.

The law's provisions are sensible reforms that more parts of the US should adopt. But they do little more than smooth out the rough edges in the HOA model, when the larger problem is the model itself. Widespread HOA governance reinforces segregation, inflates housing costs, and depletes the commons.

If we want to rein in these private governments, end the housing crisis, and finish the job of racial integration, it will take more than some modest adjustments to HOA governance. We may need to break the system of privatized governance entirely.

HOAs sprang from the suburban boom of the late 1950s — the first association on record was formed in 1959 in Rossmoor, California. The model spread rapidly. By 1970 there were 10,000 HOAs nationwide. By 2023 there were some 365,000, with more than 75 million Americans residing within their territory.

To understand why the HOA-ification of America is so pernicious, we must first understand what made HOAs so appealing in the first place. In his book "Crack-Up Capitalism," the historian Quinn Slobodian writes that gated communities — which are invariably managed by HOAs — represent a form of "soft secession," an effort to create "alternative political arrangements at a small scale."

This form of "soft secession" has proved appealing to some prominent libertarian intellectuals. You might find it counterintuitive that minimal-government types would embrace a type of government that allows busybodies to regulate the color of their next-door neighbors' homes. But as Slobodian shows, more than a few prominent market fundamentalists have been drawn to the notion of a private-sector substitute for local government.

Consider one of the characters in Slobodian's book: Gordon Tullock, an economist and public-choice theorist who spent much of his career at George Mason University. Tullock devoted an entire chapter of his book "The New Federalist" to describing the HOA of Arizona's Sunshine Mountain Ridge, a community of 250 houses he then called home. In Tullock's telling, in exchange for an annual fee and residents' adherence to community rules, the HOA paid for road maintenance, private fire protection, landscaping, trash collection, and private security to supplement the protection offered by the Pima County sheriff. The association also provided its residents with "the usual privileges of a citizen in any free state," Tullock wrote.

A Sunshine Mountain Ridge resident "can complain to the board, either by going to the regular meetings of the citizens of this little community or circulating petitions, run for office, or organize other people to run for office as a sort of party," Tullock wrote.

Tullock praised the resulting quality of life: Sunshine Mountain Ridge, he wrote, is beautiful, provides high-quality services to its residents, and wields outsize political power in the county government. He also celebrated the neighborhood's homogeneity: "It seems that people, on the whole, like living with other people who are similar to them."

If Sunshine Mountain Ridge was mostly home to people like Tullock, that was "emphatically not true" of surrounding areas "where almost 1/3 of the population is Mexican," he wrote. Given that part of the HOA model's appeal is its success in maintaining residential segregation, it's not entirely surprising that the HOA boom took off in the years following the fall of Jim Crow.

That explosive growth was driven at least in part by market demand for the sort of exclusivity Tullock lauded. A 2019 study by the economists Wyatt Clarke and Matthew Freedman found that HOA home prices were, on average, higher than non-HOA home prices in the surrounding area — and that this "HOA premium" was strongly correlated with the size of an area's Black population as of 1960. The more Black residents a region had in the last decade of legalized, explicit racial segregation, the larger the gap between non-HOA home prices and HOA home prices. One can surmise that HOAs in these areas tend to be more exclusive in part because they were designed to exclude. Readers will not be shocked to learn that Clarke and Freedman also found that HOA residents were more likely to be white or Asian than non-HOA residents.

The "secession of the successful" into HOAs, as the former US labor secretary Robert Reich once put it, has consequences for everyone else. The legal scholar Sheryll Cashin has argued that HOAs erode the social contract and encourage residents to think of themselves as property owners first and citizens second.

"As more and more citizens separate themselves into homogeneous private communities, their ties to the larger polity will become attenuated and they will increasingly resist governmental efforts to address problems that they do not perceive as 'theirs'," Cashin wrote in 2001.

For example, as Cashin noted, HOA members may be particularly hostile to public taxation, especially local property taxes. After all, they already pay HOA dues that fund private infrastructure in their communities; why pay again to subsidize public infrastructure outside the neighborhood? (Cashin observed that several states, including New Jersey and Texas, had laws allowing HOA residents to subtract the cost of privately provided infrastructure from their taxes.)

Similarly, HOAs can and do use their political influence and land-use bylaws to prevent the construction of multifamily and low-cost housing in the territories they govern and the periphery. America needs millions of homes to meet demand and ease the upward pressure on housing costs, but many HOAs have rules to prevent building even small additions, such as accessory dwelling units — much less large developments like apartments. It's difficult to estimate just how much homebuilding HOAs have thwarted in supply-constrained areas. But one thing is certain: By acting as a bulwark against new housing supply, NIMBY HOAs contribute to the housing crisis and make inequality worse.

Even for the HOA members, the supposed upsides of these associations can become a burden. Many Americans who live in HOAs face steep fines for trivial infractions, and some have even faced eviction for seemingly minor violations of neighborhood codes. For instance, a couple in Texas was sued in 2022 by their HOA for $250,000 — for the crime of feeding ducks near their home. These are the kinds of abuses that Florida's new law is intended to halt.

But Florida's reforms will do little to address the structural problems with the HOA model. Little wonder, since Florida's far-right state government is an indirect beneficiary of those harms; the state's evolution into an HOA republic has likely been a factor in its transformation from a swing state into a laboratory for reaction.

The growth of these little private governments has helped entrench segregation along racial and class lines, fueled the atomization of American public life, and worsened the material quality of life for millions of Americans. That's a far more pressing issue than HOA standards around lawn care.

Ned Resnikoff is the policy director of California YIMBY and co-leader of the Metropolitan Abundance Project.