• The New Face of Home Ownership: Growth of Community Associations
  • February 14, 2014 | Author: Jeffrey Van Grack
  • Law Firm: Lerch, Early & Brewer, Chartered - Bethesda Office
  • The growth of association-governed communities is shaping the future of American home ownership. In the past 30 years, the number of community associations has grown almost tenfold - from 36,000 communities in 1980 to 323,600 in 2012. Common-interest housing developments are the fastest growing form of housing in the United States, with almost 25% of U.S. homes belonging to community associations. This translates to an estimated $2 trillion in real estate value and $1.6 billion in services provided by homeowners associations (HOAs), condominiums, cooperatives, and other planned communities. 

    Ninety Percent of Montgomery County’s New Housing is Common Interest
     
    This quickly expanding trend toward community associations is evident in Maryland’s existing communities and especially in new developments. There are approximately 6,400 community associations in Maryland, which is relatively proportionate to other growth states. According to Peter Drymalski of the Commission on Common Ownership Communities (CCOC), Montgomery County has 1,030 common ownership communities controlling 127,191 homes and housing units. With these numbers, almost one-third of Montgomery County’s housing stock is located in common ownership communities, and this number is likely to grow. 

    Ninety percent of Montgomery County’s new homes and housing units belong to community associations. These common-interest developments are predicated on shared values, principally the importance and need to preserve property values by maintaining a desirable living situation. Common ownership communities accomplish these goals in a variety of ways. One way is through their boards of directors, elected by members and tasked with numerous responsibilities, including enforcing community regulations regarding maintenance and upkeep to conform to shared ideas of aesthetic appeal. A national survey in 2012 by Zogby International found that 76% of community association residents say their rules protect and enhance property values. 

    Miniature Forms of Government 
    Community associations function as miniature forms of government, as their boards frequently control streets, landscaping,general maintenance, community facilities, and other amenity issues. New communities often are created with the stipulation that their accompanying association will take over responsibilities typically associated with government, such as road maintenance, snow removal, trash pickup, and storm water management. This process links back to homeowners’ shared goals and provides an outlet for local concerns often lost within larger local and state governments. 

    With such a large percentage of Montgomery County’s new housing developments belonging to community associations, their development and continued rapid growth are a boon to local and state governments. While fiscal challenges dominate local municipalities’ concerns because of today’s economic climate, homeowners associations can reduce the financial burden on local governments to provide services and amenities to residents through their governance structure and management responsibilities.