One of the beautiful things about people is that we have figured out that banding together in communities is generally beneficial. Since the early days of our nation, people have lived together in cities and towns for shelter, safety, commerce, etc. Cities and towns formed in logical places and provided various forms of housing including single family homes, apartment complexes of various types, townhomes, and row houses. For years the housing was privately owned and the government provided the infrastructure with tax proceeds for needed roads, parks, utility services, schools, emergency service, etc. The government was responsible for aesthetic issues through zoning codes, although that was, and is, limited in its reach. The common property for traditional communities such as parks and playgrounds was managed and maintained by localities funded by property taxes.
Prior to the Civil War, a limited number of covenant-based communities existed to support the concept of providing privately owned and managed neighborhood amenities in Manhattan and Boston. One of the earliest covenant based large-scale community association developments in the area was Roland Park in Baltimore, which was developed in 1891. The development of community associations with mandatory membership and assessment funding be-came increasingly popular in the early 1900s. In 1934, the Fair Housing Administration was formed. FHA mortgage insurance and land development guidance spurred greater capital and structure for broader development of housing for a wider spectrum of the nation.
By the 1960s people began to notice that developments that were formed as community associations tended to retain their value, while those that were not protected by covenants and a governance structure tended to decline in value and ultimately required urban renewal. Also, in the ‘60s, the then relatively rare idea of condominium developments began to pick up steam. During this time, many states adopted early versions of the modern condominium acts based on a model statute developed by the FHA. In 1977 the Uniform Condominium Act was developed, which balanced development, financing and consumer protection interests to create an even better environment for condominium development. With legal and financial foundations available, condominium development accelerated so dramatically that by the ‘70s, condominiums were the dominant housing form in common interest communities.
Over time, as governments sought to reduce the cost to them of new residential development and developers saw benefits in controlling the common integrity of the housing and affiliated common property in By the 1960s people began to notice that developments that were formed as community associations tended to retain their value, while those that were not protected by covenants and a governance structure tended to decline in value and ultimately required urban renewal. Also, in the ‘60s, the then relatively rare idea of condominium developments began to pick up steam. During this time, many states adopted early versions of the modern condominium acts based on a model statute developed by the FHA. In 1977 the Uniform Condominium Act was developed, which balanced development, financing and consumer protection interests to create an even better environment for condominium development. With legal and financial foundations available, condominium development accelerated so dramatically that by the ‘70s, condominiums were the dominant housing form in common interest communities.
Over time, as governments sought to reduce the cost to them of new residential development and developers saw benefits in controlling the common integrity of the housing and affiliated common property in their communities, the benefits of shifting responsibility for the cost of developing infrastructure and managing common areas to the private sector from the public sector became increasingly apparent. In the ‘80s and ‘90s, planned community developments grew dramatically in popularity. The need for greater legal foundation for home-owners’ associations led to the publication of the Uniform Common Interest Owner-ship Act which served as the foundation of many states’ homeowner association statutes. This enhanced the environment for the development of homeowner associations in general and large-scale homeowner associations in particular. To this day, almost all new housing built in America is established in a common interest community association. Notwithstanding some of the negative press, the common interest communities are very successful at providing a form of housing that works for developers, homeowners, and our local governments. Surveys indicate that association members are generally quite pleased with the form of ownership. That’s how we got here and why they’re here to stay.
By Wil Washington, ESQ., CCAL
Wil is a principal and founding member the law firm of Chadwick, Washington, Moriarty, Elmore & Bunn, P.C. He is a past president of Washington Metropolitan Chapter of the Community Associations Institute and a member of the College of Community Association Lawyers.
