Your Neighbor Is a Government

There is a form of government that a very large number of Americans interact with more frequently than any other. More than Congress. More than their state legislature. More, in most cases, than their city council.

It levies taxes, though it calls them assessments. It regulates the use of your property, down to the color of your front door and whether the door may have a screen. It adjudicates disputes, imposes fines, and in most states may place a lien on your home and foreclose on it.

It operates under no constitutional constraint whatsoever. No First Amendment — it can prohibit your yard sign, your flag, your window sticker. No Fourth Amendment. No due process in the sense a court would recognize. No equal protection.

Because it isn't a government. It's a private contract you signed at closing, along with forty other documents, on a day when you were mostly worried about the wire transfer clearing.

We took the only government most Americans actually attend and exempted it from the Bill of Rights.

Where they came from

Here's the part that surprised me, and it's why this piece belongs in this series rather than in the general pile of things people complain about at parties.

The modern homeowners association is the institutional offspring of the tax revolt.

Proposition 13 and its imitators across the country capped what municipalities could raise from existing property owners. Which meant cities lost the ability to fund new infrastructure out of general revenue — no growing assessment base, no growing budget, no money for the streets and sewers and drainage that a new subdivision requires.

So the cost got shifted onto developers, through exactions and impact fees. If you want to build here, you build the roads.

But that only solves the capital cost. Somebody has to maintain the thing forever, and cities increasingly declined to accept dedication of the streets — because accepting them means accepting a permanent maintenance liability with no permanent revenue attached. A frozen tax base cannot absorb new obligations.

So the developer creates a perpetual private entity, with the power to assess, written into the deed and binding on every subsequent owner. That entity owns the streets, maintains the drainage, cuts the grass in the common area, and bills the residents forever.

That entity is the HOA. Same decade, same cause, same document trail.

The 1978 tax revolt produced both the frozen assessments that incumbents enjoy and the private governments that newcomers live under. One statute, two outcomes, sorted by arrival date.

And it explains why the grievance runs so hot, because it isn't really about paint colors. It feels like being billed twice, and that's because you are: property tax to a municipality that doesn't maintain your street, plus assessments to a body that does. What people resent is paying municipal-grade money for sub-municipal accountability.

The lineage

The instrument itself is older than the tax revolt, and its perfection came in a context worth stating plainly.

Covenants, conditions, and restrictions — CC&Rs — were refined in the early twentieth century as the delivery mechanism for racially restrictive covenants. They were the legal technology by which a subdivision could be made permanently white without a municipality having to write anything down.

In 1948, Shelley v. Kraemer held that courts could not enforce the racial clauses.

It struck the clause. It did not strike the machinery. The covenant regime survived intact, minus one paragraph, and became the template for the modern association — the same enforcement structure, the same perpetual binding on future owners, the same private-contract framing that keeps constitutional scrutiny at arm's length.

1948 is also the year William Levitt was explaining that no man who owns his own house and lot can be a Communist. Levittown's covenants excluded Black buyers by contract. The postwar suburb and the private government arrived in the same shipment, and so did the exclusion.

What they actually do

Set the history aside and just inventory the powers.

An HOA taxes you. Regular assessments, plus special assessments it can impose without your consent. It regulates your property — architectural review, use restrictions, rules about vehicles, pets, occupancy, rentals, landscaping, and what may be visible from the street. It adjudicates, through violation hearings conducted by the board. It fines. It places liens. And in most states, it can foreclose.

That last one is where it stops being an annoyance and becomes indefensible. People have lost six-figure equity over four-figure assessment disputes, because the mechanism compounds: the unpaid fine accrues late fees, the association refers it to counsel, attorney fees attach to the debt, and the fees grow faster than most households can settle. The dispute becomes unaffordable before it becomes resolvable, and then the house is gone.

There is no other private contract in American life that ends with the counterparty taking your home over a fucking landscaping violation.

And the participation problem is the one from the last installment, miniaturized and made worse. Board elections with single-digit turnout. Boards that go self-perpetuating because nobody runs against them. Proxies harvested by the management company. The people who show up are the people with a grievance and a free Tuesday evening.

Everything I said about planning commissions applies here — except smaller, less accountable, and holding a foreclosure power the planning commission doesn't have.

The part that matters for everything else

Here is the load-bearing point, and the reason this isn't merely a fun standalone.

HOAs are where exclusion goes when zoning gets preempted.

I argued last time that the only reform channel functioning in America is state preemption — legislatures overriding thirty thousand municipalities, one at a time, moving the decision to a level where the off-cycle homeowner electorate isn't decisive. Montana, Texas, Washington, Oregon, California, Utah, Maine. That machine is running and it works.

Underneath it sits a second layer that the machine frequently doesn't reach.

CC&Rs routinely prohibit accessory dwelling units. They prohibit lot splits. They cap or ban rentals. They ban manufactured and modular construction — which is, incidentally, the cheapest way anyone knows to build a house. None of that is zoning. All of it is private contract, recorded against the parcel, binding in perpetuity.

So a state can preempt its municipalities on a Tuesday and change nothing at all in the subdivisions where most new housing would go. California discovered this and had to pass separate legislation in 2019 explicitly voiding HOA prohibitions on ADUs, because the zoning reform alone was inert in the majority of newer subdivisions where a covenant was doing the excluding.

Every state that preempts zoning without also voiding covenants has passed a law that does not apply where most new housing gets built.

Which is a fairly precise description of how this whole system defends itself. Strike down the public instrument and the private one is already standing.

The reckoning

There's a second failure running in parallel, and it's the one currently doing visible damage.

After Surfside, Florida required structural integrity reserve studies and mandated that reserves actually be funded. What that exposed was decades of boards deferring maintenance in order to keep dues down — because low dues are what boards get elected on, and a board with a two-year horizon has every reason to push a roof replacement onto its successors.

The bill came due all at once. Special assessments in the tens of thousands, sometimes the low hundreds of thousands. Older condo buildings becoming effectively unsellable because no buyer will assume an unknown assessment liability. Insurance costs landing on top of it.

Florida has been amending the statute repeatedly since, so the current requirements may differ from what I've described. The structural point survives whatever version is in force: a private government with a two-year election cycle, elected by a constituency that wants low dues, will systematically underfund a fifty-year asset. That's not bad luck or bad boards. It's a governance failure with an entirely predictable shape, and it's the same shape as the municipal one — short electoral horizons, long asset lives, and a bill that always arrives after the people who deferred it have moved.

Why nobody will touch it

Which brings me to the strangest fact about all of this.

Roughly 75 million Americans live under this arrangement, and it is not a national political issue. It appears in no platform, no stump speech, no debate question.

The right defends HOAs on grounds of freedom of contract and property rights — which requires not noticing that they are unelected-in-practice micro-states holding the power to seize a home over a fine, and that the "contract" was signed under conditions no one would call meaningful negotiation.

The left is uneasy about the exclusionary function and the Shelley lineage, but reluctant to attack the one participatory local institution most Americans actually attend, and wary of anything that could be characterized as deregulating neighborhood protections.

So both coalitions look at it, find their own stated principles embarrassing, and change the subject. Seventy-five million people governed by a body neither party can describe without contradicting itself.

The pitch, from 1921 forward, was autonomy. Own your own home. Paint it, drill it, keep a dog, plant what you like, answer to nobody. That was the product, and the loyalty test was built on it — a man with his own house and lot has too much to do to be a Communist, because it's his.

What the modern version of that product actually delivers is a covenant, an architectural review committee, a schedule of fines, and a lien.

The dream got unbundled somewhere along the way, and nobody told the buyers which parts were still in the box.

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