Condominium Housing: Some Social and Economic Implications

Abstract

Condominium housing was introduced into the US some years ago as a legal innovation to facilitate homownership. In distinguishing between private & common areas in housing projects, Home Owners' Associations (HOA), a type of mini-government, were to be established to manage the latter & to resolve boundary questions. Via this mechanism the condominium might be assumed to induce a shift away from the 'technocratic caretaker model', characteristic of rental housing, to a 'cooperative development model' in housing management. However, the HOA is not akin to a voluntary association for its composition & operations are substantially influenced by the initial developer. An alternative approach is to draw on economic concepts of collective action to explain & project the behavior of condominium residents individually & as a group. Preliminary evidence suggests that 'free rider' problems, high decision costs, the potential for inefficiencies in consumption, & the meaning of weak & unenforceable sanctions for noncompliance with by-laws & regulations are among major issues facing condominium residents. A number of alternatives are explored as to how the HOA might address such issues. Failure to resolve these issues by the HOA may occasion a search for social controls from local, state, or federal governments. AA.