60-Second Financial Truth
By: Matt @ HomeAndPocket.com
March 27, 2026
Key Takeaways
- About 75 million Americans live in HOA communities today.
- Roughly 30% of U.S. housing are governed by an HOA.
- HOAs became common after World War II suburban expansion.
- Many new housing developments now require HOA membership by default.
Where HOAs Came From
Homeowners Associations may feel like a modern annoyance, but the concept has actually existed for over a century.
Early versions appeared in the late 1800s when developers created private residential communities designed to maintain property values and neighborhood appearance.
One of the earliest examples was Gramercy Park in New York City (1831).
Residents paid fees to maintain and access the private park. Similar arrangements later appeared in early planned communities around the country, although they were mostly limited to wealthy neighborhoods.
When HOAs Started Expanding
HOAs began appearing more frequently during the early 1900s as cities expanded outward.
Developers used restrictive covenants to control things such as:
- Building styles
- Property use
- Lot sizes
- Neighborhood standards
These rules were originally enforced through agreements between property owners rather than formal associations.
Unfortunately, many early covenants also included racial restrictions, preventing certain groups from purchasing homes in those neighborhoods.
The U.S. Supreme Court ruled these covenants unenforceable in 1948 in Shelley v. Kraemer.
The Suburban Boom That Changed Everything
Modern HOAs really exploded during the post-World War II suburban expansion from the 1960s through the 1980s.
Three major forces drove the growth.
1. Suburban Development
Millions of Americans moved into newly built suburbs. These developments included shared amenities such as:
- Parks
- Pools
- Clubhouses
- Landscaping
- Private roads
HOAs were created to manage and maintain those shared spaces.
2. Local Government Incentives
Cities and counties quickly realized HOAs could shift infrastructure costs away from taxpayers.
Instead of local governments paying to maintain roads, sidewalks, and green spaces, private associations could collect fees from residents to cover the cost.
3. Condominium Laws
During the 1960s, many states passed laws allowing condominium ownership structures. Condos almost always require an association to manage common areas, which accelerated HOA adoption.
By the 1980s, HOAs had become a normal part of American suburban development.
Where HOAs Are Most Common
HOAs are heavily concentrated in Sunbelt states, where large master-planned communities dominate housing growth.
States with High HOA Concentration
- Florida – retirement communities and large developments
- California – especially Southern California condos and planned neighborhoods
- Arizona – massive suburban expansion around Phoenix
- Nevada – Las Vegas suburban developments
- Texas – fast-growing metro areas like Dallas, Houston, and Austin
Regions Where HOAs Are Less Common
Older parts of the country often have fewer HOAs because neighborhoods were built long before the model became popular.
These include:
- The Northeast
- Parts of the Midwest
- Older towns in the Southeast
More From 60-Second Financial Truth1-Minute Reads
Why Developers and Cities Love HOAs
HOAs didn’t grow by accident. They solve several problems for developers and governments.
Developers Favor Them Because
- They maintain neighborhood standards
- They help preserve property values
- They make large planned communities easier to manage
Local Governments Favor Them Because
- Infrastructure costs shift to residents
- Cities avoid maintaining private streets and amenities
- Taxpayers carry fewer maintenance expenses
Some homeowners also support HOAs because they help maintain neighborhood appearance and property values.
Why Critics Push Back
At the same time, critics argue HOAs add another financial and regulatory layer to homeownership.
Common concerns include:
- Monthly or annual HOA fees
- Restrictions on property use
- Rules about landscaping, parking, and renovations
- Fines for violations
In other words, owning a home in an HOA community often means following a private government of sorts.
The Bottom Line
HOAs began as a niche feature in wealthy communities but have grown into a central part of modern American housing.
Today:
- 75 million Americans live under HOA rules
- Nearly 1 in 3 homes are in HOA communities
- Many new neighborhoods require HOA membership automatically
For many buyers today, joining an HOA isn’t a choice—it’s simply part of purchasing a home.
And when you combine mortgages, property taxes, and HOA fees, it raises an interesting question:
Are homeowners truly owning their property… or simply paying multiple organizations for the privilege of living there?
As Always, Thanks for Reading and Please Subscribe Below
My husband and I are wanting to leave California but have no idea on where to go…so many important factors…
Great growth for your blog Matt. You are hitting a sensitive spot with finances. Keep it up and thank you…
I agree with you. My mother lives in South Carolina. she loves Cracker Barrel and visit once during the week…
That’s a very fair perspective, and you’re absolutely right—change is a constant, especially in business. Cracker Barrel isn’t wrong for…
Excuse my ignorance. I don’t understand the noise about the rebranding. The world is in a state of continues change.…
