The Rules are Different Here

• DOI: 10.1177/0095399705277137
• Published date: 01 September 2005
• Date: 01 September 2005
• Subject Matter: Articles

10.1177/0095399705277137ADMINISTRATION & SOCIETY / September 2005McCabe / CITIES AND HOMEOWNERS ASSOCIATIONS

THE RULES ARE DIFFERENT HERE

An Institutional Comparison of Cities

and Homeowners Associations

BARBARA COYLE MCCABE

Arizona State University

Homeownersassociations (HOAs)are quickly becoming the most common and fastest grow-

ing units of local governancein the United States. Like the cities to which they are often com-

pared, HOAsprovide services, regulate activities, levy taxes, and ultimately elect their gov-

erning bodies. Because the courts view HOAs as business enterprises rather than as

governments, HOAs’governing provisions are notrequired to conform to basic democratic

principles for participation. This article uses theories fromthe new institutionalism to com-

pare the typical governing provisionsof cities and HOAs to consider how these provisions

shape civic life in urban areas.

Keywords: homeowners association; cities; institutions;voting; taxes; assessments; urba n

governance

A homeowners association (HOA) in Boca Raton, Florida, cited and

sued a resident, claiming her dog weighed more than 30 lbs, a violation of

association rules. The results of the court-ordered weigh-in were incon-

clusive with the scales fluttering above and below the limit.The case was

settled out of court on undisclosed terms (cited in McKenzie, 1994).

In 2000, a Houston couple was late paying their association dues on a

house they had ownedfor 17 years. In June, after paying their $300 dues in

installments, they got a letter from the association’s lawyer. The letter

informed the residents that, if they did not pay $604 (an amount that

included legal fees) within 2 weeks,they would be sued for foreclosure on

404

AUTHOR’S NOTE: This article was originally prepared for presentation at the Devoe

Moore Center Critical Issues Symposium in Tallahassee, Florida, on November 9 and 10,

2001. The author gratefully acknowledges Janet Denhardt, Robert Denhardt, Heather

Campbell, and Richard Feiock for their frequent and insightful readings.

ADMINISTRATION & SOCIETY, Vol. 37 No. 4, September 2005 404-425

DOI: 10.1177/0095399705277137

© 2005 Sage Publications

their home and additional legal fees. By the time the lawsuit reached the

court’sdocket, the bill for legal fees had reached $28,000 (Marshall, 2002).1

The accounts of conflicts between residents and their HOAs found in

the popular press highlight the petty and sensational. There is a serious

subject, largely ignored in news accounts, beyond the outrageous tales:

HOAs are transforming civic life in the United States. In fact, HOAs are

the fastest growing organization for local governance. Some 50 million

people currently live within an HOA or other community association

(Community Associations Institute, 2003). Almost unheard of 50 years

ago, HOAs now outnumber cities 13 to 1.2Increasingly, urban residents

find themselves holding dual citizenship as residents of their cities and

members of their HOAs.3HOAs are often compared with cities: Both

provide services, levy taxes, and regulate individual behavior. But HOAs

havebeen called “private governments” (McKenzie,1994) and cities “crea-

tures of the state” (Dillon, 1911). Cities and HOAs spring from different

roots and rely on different rules of social choicein making collective deci-

sions. These rules—concerning who may participate, how to participate,

and how to translate individual preferences into a collective choice—

highlight the distinction between democratic ideals and the models of

social choice (Riker, 1982) and underscore some of the contrasts between

politics and markets as systems for social choice (Lindblom, 1977).

This article uses insights from the new institutionalism in political sci-

ence and economics to examine the origins of these organizations, the

function of their rules, and the implications of institutional differences for

citizenship and governance.4The first section discusses systems for social

choice, describes legal differences between cities and HOAs, and pro-

vides a primer on HOAs. The second section draws from the new

institutionalism to more formally consider the purpose and function of

rules. The third section examines the rules governing participation that

HOAs and cities typically apply in handling similar situations, whereas

the final section raises questions about how the simple fact that the rules

are different translates into the promotion of values that influence the civic

life and governance of urban areas.

SYSTEMS FOR SOCIAL CHOICE:

POLITICS AND MARKETS, CITIES, AND HOAS

As creatures of the state, cities are organizations of politics. As private

governments most often incorporated as private nonprofits, HOAs are

McCabe / CITIES AND HOMEOWNERS ASSOCIATIONS 405