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The rise and effects of homeowners associations

Author

Listed:
  • Clarke, Wyatt
  • Freedman, Matthew

Abstract

In the U.S., nearly 60% of recently built single-family houses, and 80% of houses in new subdivisions, are part of a homeowners association (HOA). We construct the first near-national map of HOAs using publicly recorded mortgage records for single-family homes. We use these data to document the growth and characteristics of HOAs as well as to examine their relationship with housing prices. We find that houses in HOAs have prices that are on average at least 4%, or $13,500, greater than observably similar houses outside of HOAs. The HOA premium correlates with the stringency of local land use regulation, local government spending on public goods, and measures of social attitudes toward race. The data also paint a detailed picture of the people living in HOA neighborhoods, who are on average more affluent and racially segregated than those living in other nearby neighborhoods.

Suggested Citation

  • Clarke, Wyatt & Freedman, Matthew, 2019. "The rise and effects of homeowners associations," Journal of Urban Economics, Elsevier, vol. 112(C), pages 1-15.
    • Handle: RePEc:eee:juecon:v:112:y:2019:i:c:p:1-15
    DOI: 10.1016/j.jue.2019.05.001
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    Citations

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    Cited by:

    1. Stefano Cellini & Francisco Nobre, 2023. "Business Improvement Districts and Housing Markets: Evidence from Neighborhoods in London," School of Economics Discussion Papers 0523, School of Economics, University of Surrey.
    2. Koster, Hans R.A. & van Ommeren, Jos & Volkhausen, Nicolas, 2021. "Short-term rentals and the housing market: Quasi-experimental evidence from Airbnb in Los Angeles," Journal of Urban Economics, Elsevier, vol. 124(C).
    3. Giacoletti, Marco & Parsons, Christopher A., 2022. "Peak-Bust rental spreads," Journal of Financial Economics, Elsevier, vol. 143(1), pages 504-526.
    4. Stephen B. Billings & Adam Soliman, 2023. "The erosion of homeownership and minority wealth," CEP Discussion Papers dp1967, Centre for Economic Performance, LSE.
    5. Adu, Providence & Delmelle, Elizabeth C., 2022. "Spatial Variations in Exclusionary Criteria from Online Rental Advertisements," SocArXiv 8g4sv, Center for Open Science.
    6. Turner, V. Kelly, 2022. "The environmental consequences of residential land tenure in single family neighborhoods," Land Use Policy, Elsevier, vol. 114(C).
    7. Xingchi Shen & Yueming Lucy Qiu & Pengfei Liu & Anand Patwardhan, 2022. "The Effect of Rebate and Loan Incentives on Residential Heat Pump Adoption: Evidence from North Carolina," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 82(3), pages 741-789, July.

    More about this item

    Keywords

    Homeowners associations; Planned unit developments; Capitalization; Property values; Private government; Mortgages;
    All these keywords.

    JEL classification:

    • H1 - Public Economics - - Structure and Scope of Government
    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location
    • R5 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis

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