Prior to 1910 the modern community association did not really exist. Some subdivisions did have deed restrictions and attempted to enforce them, and some private property owners' neighborhood organizations did provide basic services and own and maintain common facilities, but no compulsory membership homeowner association was constituted through deed restrictions to perform all three of the basic functions of a community association.
The Origins of HOAs
Early Formation and Rise of HOAs (1900s–1970s)
1910s–1930s: The Seeds Are Planted
The idea of planned communities with deed restrictions and architectural controls began in elite developments like Palos Verdes (CA) and Shaker Heights (OH).
These early HOAs were mostly private enclaves for the wealthy, designed to maintain a certain aesthetic and exclude certain groups of people (via race-based covenants, later banned).
1930s–1940s: FHA & Racial Segregation
The Federal Housing Administration (FHA), created during the New Deal, started subsidizing suburban development—but only if homes adhered to certain restrictions.
These covenants were declared unenforceable by the Supreme Court in Shelley v. Kraemer (1948), but their legacy lingered.
The Fair Housing Act of 1968 later made such discrimination explicitly illegal.
FHA guidelines encouraged racial homogeneity and discouraged integration, often requiring racial covenants in order to qualify for financing.
HOAs became a vehicle for enforcing these restrictions, ensuring the neighborhood met FHA’s “standards.”
Post-WWII Boom: 1950s–1970s
After WWII, the U.S. saw a massive housing and suburban explosion, driven by returning GIs and government-backed loans.
Developers built entire subdivisions at scale—like Levittown—and began using HOAs to govern the community after selling the homes.
Government Encouragement
During the 1960s–1980s, local governments encouraged HOAs as a way to reduce the public burden—developers and residents would manage infrastructure (roads, parks, etc.) themselves.
This led to a boom in private, self-governed communities—essentially mini-governments with the power to tax (through dues), regulate, and enforce rules.
Beginning in the late 1970s, two key secondary mortgage market institutions, the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) have been very influential in the process of restructuring community association organization, financing, and management to conform to new implementation guidelines.
Finally, in the past decade developers have been relinquishing more control of community associations to the property owners at earlier stages, as part of a phased process. But not all are following. Read more here.
Why HOAs Are So Controversial
Power & Control
HOAs have government-like powers without the same checks and balances. more calls for democratic governance and limits on unchecked board power.
Boards are often made up of volunteers with little training, yet they can make binding decisions and control significant funds.
They become a de facto investor in our home investment.
Conflicts often arise around aesthetic regulations, political signage, solar panels, short-term rentals, and other lifestyle choices, reflecting broader cultural and political divides.
Technology and outsourcing management to professional companies, a dominant feature to streamline operations, leads to reduced homeowner involvement.
Inconsistent Governance
Rules and enforcement vary wildly, leading to claims of bias, favoritism, or abuse.
Some are well-run, while others are chaotic, overly strict, or even hostile.
Property Rights
Critics argue that HOAs infringe on personal freedoms—telling you what color your house can be, what flag you can fly, or how tall your grass can grow.
Supporters say they protect property values by maintaining neighborhood
standards.
Legal Disputes
HOAs are involved in a lot of lawsuits—either against homeowners or by homeowners.
Controversy and litigation are rain makers of attorneys.
Foreclosures over minor infractions or missed dues can feel extreme and unjust.
Financial Transparency
Some HOAs are criticized for poor financial management and lack of transparency about how assessments are spent.
Corruption and embezzlement, while not common, have happened.
Mixed Public Opinion
Disagreements on the “value added” proposition- both objective and subjective value.
Some people love HOAs for the security, aesthetics, and amenities they offer.
Others see them as overreaching, petty, and authoritarian.
In some states (like Southern Nevada, Florida, Texas, and Arizona), HOAs are almost unavoidable.
Model Legislation[1]
With the increase in number of HOAs, the need for laws addressing them grew. The development of the laws addressing problems with HOAs began with condominiums. Recognizing the potential problems within condominiums early on, the federal government started requiring states to adopt laws governing the management of condominiums as a prerequisite for the Federal Housing Administration providing mortgage insurance for condominiums. The FHA drafted the Model Horizontal Property Act in 1961 to provide a model for states as they drafted their own condominium laws. Tennessee enacted its Horizontal Property Act in 1963, authorizing the creation of condominiums in the state.
The Uniform Law Commission (ULC) drafted the Uniform Common Interest Owner Bill of Rights Act in 2008 for states unwilling to enact the entire UCIOA. The Bill of Rights Act addresses some of the same issues as the UCIOA but omits some of the general provisions and sections on the management of communities with HOAs; almost all of the protections of purchasers; all of the sections on the creation, alteration, and termination of communities; and the entire article establishing an administrative state agency to oversee these developments. Currently, the Tennessee Bar Association is working on legislation that would apply to single-family residential developments governed by an HOA.
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[1] From the 1989 US Advisory Commission on Intergovernmental Relations publication Residential Community Associations: Private Governments in the Intergovernmental System?
