It has long been recognized that local planning boards have preferred, and in increasingly more and more municipalities have mandated, that new developments must have a homeowners association. The author calls this requirement for the private provision of traditionally public services a “public service exaction.” Turning to the nature of this extraction — the restrictive covenants under which homeowners are legally bound and by which the subdivision is governed — one finds that problems with the HOA private government scheme have surfaced across the country.
This is the “raison d’etre” for HOA governance as contained in every declaration of covenants. Yet, the results of an HUD sponsored study on housing prices in 2004 revealed that (emphasis added),
[S]ampled prices for single-family homes in areas of Houston that were (1) zoned, (2) governed by covenants, and (3) governed by neither zoning nor covenants . . . [and] found no significant difference between values in zoned and covenanted areas, but found both were significantly higher than values in areas lacking both.
HOA Constitutional Government 