Elif Taşar

Homeowner Associations (HOAs) are powerful private governance structures that millions of U.S. homeowners belong to. These organizations levy fees to fund shared amenities and contractually bind homeowners to specific design and use restrictions, with the authority to foreclose on properties for non-payment or non-compliance. Do these contractual agreements yield returns for homeowners in the form of higher housing values and home equity, or do benefits primarily accrue to housing developers and financial institutions? To answer these questions, we first construct a database of state-level HOA laws and their amendments. Next, we use proprietary data to build a panel of property-level HOA membership and loan and property outcomes. Merging the two datasets, we use variation in legislation and matching methods to study the effect of HOAs on household finance. Early results point to limited HOA impacts on property values, home equity, or financial distress on average. In forthcoming work, we explore heterogeneity by HOA restrictiveness and alternative mechanisms explaining the prevalence of HOAs.