Where and why more new homes are getting wrapped into homeowner associations

In the low-interest rate era that followed the 2008 housing crisis, real estate developers rushed to build housing stock to meet rising demand. Federal data suggests that nonprofit associations have been set up at an increasing rate to govern these new developments.

We’re, of course, talking about homeowner associations—the hyperlocal, quasi-governmental organizations 73 million American homeowners answer to when they want to renovate, repaint or even scale back on landscaping.

Portland Real Estate analyzed data from the Census Bureau to explore single-family homebuilding activity, examining the volume and share of homes built within HOAs nationally and regionally. The analysis only includes homes that were built for sale, excluding those built for rent.

Nearly 4 in 5 single-family homes built in 2021 in the U.S. were part of HOAs. New housing construction has grown across the board since 2009, but new housing that’s incorporated in HOAs has grown about four times faster than housing that’s not.

The general structures of these associations have barely strayed since their popularization via a 1985 law passed in California. The historic roots of HOAs grew from the privatization of shared amenities in the wake of non-white integration into previously white-dominated spaces across the country.

Today, HOAs are typically nonprofit organizations run by an elected board of residents that holds community meetings and collects dues to maintain shared amenities like landscaping, pools, parking, and walkways. Development companies often write the initial rules and then transition control to an elected board of homeowners after completing most of the homes in a development.

What has evolved since the 1980s is a booming industry built around serving the management needs of these organizations.

While HOAs are meant to serve the collective benefit and interests of residents and their properties, some may fall into gray areas. A recent investigation into Colorado HOAs and their disappearing dues revealed that the companies tapped to manage these organizations are bestowed with the power to collect and manage large sums of money that belong to the community—and they aren’t always accountable to the homeowners they purport to serve.

As more developers build HOAs into new housing communities, homebuyers are increasingly finding themselves tied to these associations. Read on to find where HOAs are most common in the U.S.—and why.