Studies in Fiscal Federalism and State–local Finance series
Edited by Dick Netzer
Chapter 8: The rise of the private neighborhood association: a constitutional revolution in local government
Robert H. Nelson1 For most of American history, the standard form of housing was a single home or apartment that was owned or rented by an individual household. If there was a need for collective action among individual homeowners, this need was met by a local government in the public sector. Local governments provided public services such as the construction and upkeep of streets, picking up the garbage, enforcement of law and order and many others. Following the introduction of zoning in the United States in 1916, they also regulated the interactions among individual properties that could signiﬁcantly aﬀect the quality of the surrounding neighborhood environment. Since the 1960s, however, this historic role of local governments has increasingly been privatized at the neighborhood level. About 1 per cent of all Americans were living in 1970 in a private community association.2 By 2000, more than 15 per cent lived in a homeowners’ association, a condominium or a cooperative – and very often these private collective ownerships were of neighborhood size. Since 1970, about one-third of the new housing units constructed in the United States have been included within a private community association. The Community Associations Institute estimates that, nationwide, about 50 per cent of new housing units in major metropolitan areas are currently being built within a legal framework of private collective ownership. This privatizing of the American neighborhood over the past 40 years represents a fundamental development in the history both of local government and of property rights in...
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