The recent rise in corporate ownership of residential homes—and the governance influence it carries within HOAs even at relatively small concentrations—places new strain on the assumptions underlying the HOA equity bargain. Common-interest community (CIC) laws rest on a foundational compromise: homeowners and the law tolerate extraordinary intrusions on traditional property rights only so long as governance remains aligned with resident interests rather than external profit motives. Owners surrender elements of property autonomy through mandatory servitudes, collective assessments, and centralized decision-making authority in exchange for enhanced amenities and communities governed through resident-controlled institutions rather than commercial enterprise.
That exchange is the HOA equity bargain.
CIC communities are sui generis—a distinct and relatively recent form of property governance that intrudes deeply into traditional residential ownership.[1] Developer-created covenants bind all properties and may be amended only with owner consent, subject to a narrow exception for unilateral powers reserved to developers during what is intended to be a limited control period.
An HOA’s authority, unlike that of local governments, arises from private contract, even though purchasers typically have no realistic opportunity to negotiate its terms.[2] For that reason, courts have long held that association actions are “not state action sufficient to subject them to challenge under the United States Constitution.”[3] That conclusion, however, has not gone unchallenged. A substantial body of academic commentary questions whether the continued expansion of statutory delegation, regulatory entrenchment, and quasi-governmental function can be reconciled with a categorical denial of constitutional scrutiny.[4]
Critically, the historical justification for this doctrinal posture has rested on the premise that HOA power is bounded—by nonprofit purpose, resident self-governance, and an alignment between those who bear the costs of association decisions and those who exercise governing authority.
Simply put, the law tolerates extraordinary intrusions on property rights in common-interest communities because governance is presumed to remain aligned with resident interests and long-term community stewardship. As the Uniform Law Commission has explained, “The law should facilitate the operations of common-interest communities at the same time as it protects their long-term attractiveness by protecting the legitimate expectations of their members.”[5]
Where the debate is and is not, already happening
The impact of corporate ownership of residential homes—even at relatively small concentrations—directly affects the HOA equity bargain and therefore warrants careful examination and open debate. A debate is already occurring in housing policy circles, where investor ownership is analyzed through the lenses of affordability, supply, and market concentration. What is largely missing, however, is a parallel discussion of how corporate ownership affects governance inside common-interest communities.
With more than half (51.3%) of Nevada homeowners paying HOA or condominium fees—the highest rate in the country—the question is unavoidable: will community associations remain residential institutions governed by homeowners, or drift—incrementally and often invisibly—toward investor-influenced governance?
What is framed as a housing policy debate is, for HOA owners, a governance preservation issue.
Roughly one in every five homes sold in Las Vegas during the period 2009-2024 went to an investor according to a 2025 report from the Lied Center for Real Estate at the University of Nevada. Among Western U.S. cities, Las Vegas, where the vast majority of Nevada HOAs exist, ranks near the top in investor purchasing share each year. The report estimates investors purchased roughly 23% of single family homes in the City of Las Vegas last year. That percentage was down from a high of 29% post-COVID, but expected to grow both in Nevada and across the nation.
Nevada lawmakers attempted in the last Nevada legislaitve session to address large-scale corporate acquisition of residential housing. They did so again during a recent special legislative session, proposing to limit corporate homeownership. The special session effort advanced through an unusual procedural path and failed narrowly, signaling both legislative interest and unresolved disagreement. Reporting by Nevada Current and Las Vegas Sun makes clear that the issue is likely to return in future sessions.
At the national level, corporate homeownership has entered mainstream political discourse. Presidential-level proposals and recommendations now openly question whether large-scale investor ownership of homes undermines housing stability and community integrity. While these national discussions focus primarily on supply and market concentration, they inevitably shape the policy environment in which state-level reforms are crafted.
Concentration, not scale
Broad housing reforms designed without attention to HOA governance risks overlooking the very features that make common-interest communities distinct. Recent reporting suggests that large institutional ownership represents only a small share of the overall investor ownership. Accurate or not, that framing obscures the real governance risk, which is concentration rather than scale.
Developers are openly and rationally responding to shifting housing demand by integrating rental housing—including multifamily and build-to-rent single-family homes—into master-planned communities. As one Summerlin executive recently explained in a 2024 Nevada Busniess article, whether a community spans three neighborhoods or thirty-six square miles, developers must adapt to evolving preferences, noting a deliberate move toward more rental and “lock-and-leave” housing alongside traditional single-family homes.
Recent reporting by The Wall Street Journal underscores how quickly this issue is moving into active federal policy. A recent executive order issued by Donald Trump directs agencies to develop a legislative recommendation to codify a ban on institutional purchases of existing single-family homes, leaving many implementation questions unanswered, while expressly exempting build-to-rent communities. Whatever the merits of that approach as a housing-supply strategy, the exemption illustrates the core risk discussed here: policies that focus on overall market share while permitting highly concentrated investor ownership within HOA-governed communities, often from inception and without meaningful homeowner participation in the governance structure.
That evolution carries governance consequences that current HOA law does not squarely address. When rental neighborhoods or large blocks of corporately owned homes are folded into HOA-governed communities, the issue is not whether rentals belong in master plans, but whether nonprofit, member-governed associations are structurally equipped to absorb concentrated ownership without distortion. In associations where homeowner participation in elections is already low—a pattern documented across broader community association research—even a modest concentration of corporate ownership can translate into outsized governance influence.
Housing policy that treats HOAs as static or incidental risks missing how these market-driven shifts interact with association voting, control, and fiduciary alignment. The legal framework governing HOAs reflects assumptions about ownership dispersion and participation that no longer reliably hold as rental and build-to-rent housing is integrated into association-governed communities.
Unlimited Corporate Ownership Threatens The HOA Premise
Corporate housing investors do not merely own homes inside HOAs; they become participants in a private governance system. “Like a private trust, the purpose of an association is to manage property for the benefit of its members, but unlike trustees, the mangers are elected by popular vote and answer to political considerations.” [5] And unlike business, an HOAs purpose is not to make money by taking entrepreneurial risks.
Furthermore, unlike owner-occupants:
corporate owners do not reside in the community,
their fiduciary obligations run to investors rather than neighbors, and
their incentives prioritize yield, liquidity, and portfolio performance over long-term residential stewardship.
As corporate ownership scales, an HOA can drift away from its non-profit, resident-governed purpose while retaining the same coercive powers over property. Assessments remain mandatory. Rules remain enforceable. Liens remain available. But governance decisions could reflect investment priorities rather than homeowner equity.
That outcome undermines the very premise that makes HOA authority acceptable.
Time Horizon Matters in HOA Decision-Making
HOA governance can face tension between short-term and long-term objectives. This is visible in communities dominated by starter units or those with high turnover and material rental properties, where many residents do not expect to remain long-term. In such settings, investments in reserves and major capital projects are often a hard sell, even when they are necessary for long-term viability.
HOA law exists—imperfectly—to manage this tension through non-profit purpose, fiduciary duties, reserve practices, and procedural safeguards, so that governance internalizes long-term costs for the benefit of both current and future owners.
Large-scale corporate ownership does not create this tension, but it intensifies it. Portfolio-driven timelines and return targets exert sustained pressure to minimize near-term costs, defer capital work, and resist reserve increases. None of this requires bad faith. It reflects ordinary incentives applied inside a governance system designed for long-term residential stewardship.
When ownership concentration allows short-horizon incentives to dominate, the HOA’s capacity to function as a long-term steward weakens.
Cost-Intensive Communities Are Most Exposed
The risk posed by ownership concentration is greatest where collective assets represent a large share of total ownership cost.
This includes:
condominiums, where structural systems, roofs, elevators, and life-safety infrastructure dominate value; and
amenity-heavy HOAs, such as senior living and lifestyle communities, where clubhouses, pools, fitness centers, golf courses, private streets, gates, and programming define the community’s appeal and budget.
In both forms, common-area costs and associated rules are not incidental. They are central to ownership economics. Governance decisions about funding, reserves, maintenance, and the rules directly affect value, marketability, and quality of life.
Where incentives diverge—between long-term resident stewardship and cost-minimization strategies—non-profit governance becomes fragile.
Downturn Risk: Lessons Already Learned
Nevada does not need to speculate about correlated risk. Prior housing downturns, most recently in the 2008 financial crisis, showed how quickly HOA finances can be strained when occupancy drops, delinquencies rise, and ownership instability increase at the same time.
HOAs operate on cash flow where borrowing and bankruptcy are not viable options. They must fund fixed obligations regardless of market conditions. They are not designed to absorb sudden, correlated revenue shocks. When multiple units become delinquent at once, remaining owners bear the burden through deferred maintenance, special assessments, or declining community conditions.
Where ownership concentration is high, these effects are magnified—not because investors act unlawfully, but because portfolio-level exit options and coordinated decisions differ fundamentally from resident behavior.
The Declarant-Control Analogy: A Principle Already in Law
HOA law already recognizes that concentrated control by a non-resident economic actor is incompatible with long-term residential governance.
That recognition is embedded in limits on declarant control. Developers are granted control early in a community’s life to complete construction and sell units—but that authority is explicitly temporary. Control must transition to homeowners once objective milestones are met.
The rationale is straightforward: concentrated control may be tolerated for a limited, transitional purpose, but it becomes inequitable and destabilizing if allowed to persist.
Large-scale corporate ownership raises the same structural concerns as prolonged declarant control—misaligned incentives, concentrated influence, and exit risk—without the statutory sunset. Applying limits to corporate ownership is therefore not a new concept. It is a consistent application of an existing governance principle.
A Necessary Note on Fiduciary Duty
HOA law relies heavily on fiduciary duty as a safeguard against misuse of governance power. But establishing a fiduciary duty and then ensuring it functions as an effective constraint are not the same thing. In public governance, fiduciary-like obligations are reinforced by layered accountability mechanisms and reviewed under reasonableness and abuse-of-discretion standards. HOA governance operates differently. Oversight is limited, remedies are largely reactive, and fiduciary duties are filtered through the corporate Business Judgment Rule, which presumes board decisions are valid absent clear self-dealing or bad faith. As a result, fiduciary duty in HOAs often functions as an assumed alignment rather than a continuously tested one, making enforcement difficult and costly—especially where incentive misalignment is structural rather than transactional.
Nevada law implicitly recognizes these limits in other contexts, such as declarant control, where governance power is constrained structurally rather than left to fiduciary enforcement alone. Ownership limits serve the same purpose here: not replacing fiduciary duties, but helping ensure they can operate as intended by preserving alignment between governance authority and long-term homeowner interests.
Why HOA Owners Should Join the Broader Policy Coalition
The debate over corporate homeownership will continue at both the state and national levels. HOA owners should not remain on the sidelines. For homeowners subject to mandatory servitudes and private governance, limits on corporate ownership are not ideological. They are protective. They preserve the non-profit character of HOAs, maintain alignment between governance authority and long-term community interests, and reduce systemic risk during market downturns.
If HOA owners do not articulate these concerns, reforms crafted for the general housing market may overlook the unique governance realities of common-interest communities.
Conclusion: Preserve the Bargain Before It Is Overlooked
Nevada may or may not need to prohibit corporate housing investment as a general rule. But it does need to ensure that HOA governance remains anchored to homeowner stewardship, not portfolio strategy.
Supporting reasonable limits on corporate homeownership is not a departure from HOA law. It is an extension of the same logic that already limits declarant control and justifies the HOA equity bargain in the first place.
As this debate moves forward—at the state and national level—HOA owners must make their voices heard. They need a seat at the table, or risk becoming the meal, as their interests are overlooked in a broader housing policy conversation never designed with HOA governance in mind.
Protecting housing as homes first, and preserving HOAs as non-profit communities, requires engagement now—not after the rules are written.
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[1] “Determination the law that applies to associations proved somewhat difficult because common-interest communities share some characteristics of business corporations, nonprofit organizations, local governments, private trusts, and sometimes, of public utilities, but different significantly from all of them.” Restatement (Third) of Property: Servitudes, Chapter 6 Introductory Note: pg 70.
[2] Read more about this “legal fiction” in the NVHOAReform post CC&Rs and "constructive consent" and HOAs Are More Than Contracts: Legal Fiction and Institutional Interests Work To Stifle Reform
[3] Id. pg 71.
[4] See generally scholarship questioning the application of traditional state-action doctrine to modern common-interest communities, particularly where legislatures have embedded associations within statutory governance regimes and delegated functions functionally indistinguishable from municipal authority. See, e.g., discussions of homeowners associations as “private governments,” critiques of categorical reliance on contractual consent, and analyses of public-function and entwinement theories as applied to association governance. This Article does not attempt to resolve that debate, but notes that the continued vitality of the underlying premise is contested rather than settled.
[5] Id pg 71
[6] Id. pg 70
