Another look at the history of HOAs

“Community Associations”, a term still in use by CAI, originated in the first half of the 20th century and reflected a land use/planning policy of a managed community, a planned community, above and beyond simply laying out streets, utilities and homes. The term of choice was the concept of “community” since,

The innovators of CAs were entrepreneurs . . . . The dilemma [as far back as the 1930s] was how to ensure their widespread acceptance among government agencies, builders and developers, and prospective home buyers.¹

The initial trade organization behind HOAs was the National Assn of Real Estate Boards (now the National Assn of Realtors) that in 1936 split off its research function to the now known Urban Land Institute, to promote the better planning and development of urban areas. In 1944 it create a Community Builders Council to promote CAs. The Council published its first views on the need for homeowners associations in its 1945 Technical Bulletin #1 a mistake made by the Council’s chair with respect to his initial development of a community. That started the momentum for the institution of authoritarian private governments: a concern for profits that resulted in the necessity to create a corporate form of governance without concern for the protection of constitutional and civil liberties of the homeowners.

Just one year later ULI began urging developers to put HOAs in place with restrictive covenants attached to the subdivision. Next year came ULI’s comprehensive manual for HOAs, The Community Builders Handbook, which contained detailed and specific requirements and that the covenants run with the land. The authoritarian aspect of HOA governance was urged by including provisions for “The enforcement of covenants . . . or else covenants may become ineffective through nonobservance and violation. “² But no Homeowners Bill of Rights was required simply because ULI was a business trade group and not a governmental agency, and there were no homeowner voice to protect constitutional rights.

Parallel to ULI’s activities, the FHA set up its own land planning and usage division in 1938. NAREB (NAR) “had a large influence on the formation of FHA.” In 1963, Byron Hanke, an FHA employee later to be the primary founder and promoter for the creation of CAI in 1973 as a result of problems with accepting HOAs, participated in a Brookings Institute study funded by ULI. Part of this study was released at the National Association of Home Builders (NAHB) convention. This brochure, Planned Unit Development with a Homes Association, described “a cluster of subdivisions . . . combined with effective common land use.” Stable writes, “Using CC&Rs to organize an automatic [read mandatory] membership association, developers could meet competition from older forms of housing . . . .” ³ In order to get FHA insurance, the brochure specified the needs for automatic membership and a homes association, and the only acknowledgment of a voice, not necessarily a democratic voice, was a requirement to have a voting membership.

In 1966, this brochure was expanded to the infamous, Homes Association Handbook, Technical Bulletin #50, published by ULI, from which all else follows.

For more information, see History.

Other sources are: Privatopia: Homeowners Associations and the Rise of residential Private Government, Evan McKenzie (1994); Neighborhood Politics: Residential Communitiey Associations in American Governance, Robert Jay Dilger (1992),

Notes:
1. Community Associations: The Emergence and Acceptance of a Quiet Innovation in Housing, p. 68, Donald R. Stabile (Greenwood Press 2000). (A book partially funded by ULI and CAI).
2. Supra, p. 77
3. Supra, p. 90

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Published in: on May 10, 2006 at 5:02 pm  Leave a Comment  

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