History of Community Associations
Updated: May 3
Community Associations are wonderful organizations benefiting millions of US residents every day. There are countless benefits to living in community associations. One of the beautiful things about people is that we have figured out that banding together in communities is generally beneficial offering clean, cohesive neighborhoods oftentimes with amenities such as parks and pools, further encouraging the idea of community. These inherent benefits have association living on the rise, providing homes for nearly 1 in 5 Americans. But where did it all start?
Community associations were once unheard-of in a neighborhood of single-family homes. For years housing was privately owned and the government provided the infrastructure with tax proceeds for needed roads, parks, utility services, schools, emergency services, 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.
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 became increasingly popular in the early 1900s, beginning with the Arroyo Seco Improvement Association in Pasadena founded around 1905, and the Los Feliz Improvement Association in Los Angeles founded in 1916. These communities represented the birth of deed restrictions in a new kind of planned subdivision.
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. Over time, as governments sought to reduce their cost related to new residential development and developers saw benefits in controlling the common integrity of the housing and affiliated common property. 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.
In 1973, the Community Association Institute of CAI was organized through the joint efforts of the ULI, NAHB, the U.S. League of Savings and Loan Associations, the Veterans Administration, the U.S. Department of Housing and Urban Development, 23 builders, developers, and a number of leading community association professionals. Since CAI was founded, the organization has sought to be the people that build and service common interest developments in order to become a significant force in interest group politics in many states. The organization is dominated by lawyers and association managers that have shaped legislative and judicial policy-making to prevent meaningful regulation of CID activity and to keep the discourse on such matters largely private.
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.
Between then and now, the growth of community associations has only increased. In 2022, Community Association Institute (CAI) estimated that roughly 363,000 associations are currently in operation throughout the United States, serving over 74.2 million owners. In the state of Virginia, we have nearly 9,000 community associations serving over 2 million residents. With just over 8.5 million residents in Virginia, association owners account for nearly a quarter of the state’s population. That’s a lot of owners!
And while experts predict a major slowdown for the U.S. housing market in 2023, the number of new condominium communities and homeowners’ associations are expected to increase by 5,000 associations this year, according to projections by the Foundation for Community Association Research, an affiliate organization of Community Associations Institute (CAI). This anticipated growth means more owners who may not fully understand the structure of association living, further solidifying the need for additional educational resources.
myStreet Community Management wants to be the company to help bridge the gap between owners and their associations through education.