American Renaissance

Housing Patterns Analyzed

Andrew LePage, (CA), March 31, 2004

They’ve been called “privatopias,” “fortress America” and “secession of the successful.”

But California’s increasingly widespread “common-interest developments,” with their homeowners’ associations that function like private governments, are much more diverse than such stereotypes imply, according to a report to be released today by the Public Policy Institute of California.

“The criticism is that they’re causing the secession of the successful, but I find that residents of planned developments are more diverse with respect to income than people often think,” said Tracy Gordon, a PPIC research fellow who wrote the report. “And they’re no different with respect to their voting behavior once you consider relevant demographic and socioeconomic characteristics.”

The report did find that planned developments tend to be less racially and ethnically diverse than surrounding communities.

The PPIC focused on California’s 9,300 planned developments, the most prevalent and fastest-growing form of common-interest developments, which also include condominiums and cooperatives. Locally, planned developments could include everything from a high-end, 200-home gated community in Folsom to a small, ungated five-home “infill” housing project in downtown Sacramento.

In her report, Gordon defines planned developments as those in which the homeowner owns his or her individual unit and lot and the homeowner association manages and owns all common property.

Some planned developments, such as some in Sacramento’s fast-growing North Natomas, are subdivisions where a homeowner association merely owns a clubhouse, manages the landscaping or enforces the community’s conditions, covenants and restrictions.

Homeowner associations can levy assessments, settle disputes and regulate land use and other aspects of life within their boundaries. The associations can provide goods and services traditionally supplied by local government, such as garbage collection, street cleaning, street lighting and security patrol. Monthly dues in planned developments average $112 a month statewide.

In the most extreme characterizations of such developments, the report states, critics call them “nothing less than income and racial segregation reinvented in a more modern, legal form. Less extreme characterizations suggest such communities might well signal an effective withdrawal of residents from traditional society, contributing to declining voting rates and the general movement toward fiscal conservatism at the state and local levels of government.”

While it’s true that planned developments have more of the highest-income Californians, author Gordon said, they also include about the same number of moderate-income households as do other neighborhoods.

Between 22 and 26 percent of the households in planned developments earn more than $100,000 a year, compared with 15 to 17 percent of households in other neighborhoods. Forty-seven percent of households in suburban planned developments earn $35,000 to $100,000, compared with 48 percent in other suburban neighborhoods.

Gordon’s report also fires a warning shot for policy makers: She found that planned developments are less diverse ethnically and racially than the metropolitan areas they’re in. That was particularly the case in suburban areas of the capital region.

Of the 16 metropolitan areas she studied statewide, the region encompassing Sacramento, Placer, El Dorado and Yolo counties had the least ethnic and racial diversity in suburban planned developments compared with its other suburban neighborhoods.

Gordon said that because planned developments make up 12 percent of all homes in the state, their overall impact on racial and ethnic segregation is small.

“You could reduce segregation more by relocating people among suburban communities or central cities than between planned developments and other neighborhoods,” Gordon said.

But she cautioned that if trends continue and more people in the state live in such planned communities, “their racial characteristics matter more to overall segregation.”

Gordon found that 41 percent of new single-family home sales were in planned developments in the 1990s.

Gary Painter, research director for the University of Southern California’s Lusk Center for Real Estate, said he wasn’t surprised by the findings.

Across America, the trend over the last 20 years has been toward segregation, where suburbs have become less diverse racially and central cities have seen higher concentrations of nonwhites, said Painter.

“Clearly many planned developments are in places that are becoming less diverse anyway,” Painter said. “So I wouldn’t be surprised if planned developments are less diverse than other communities.”

In contrast to planned developments, condominiums give each owner title to his or her individual unit and a percentage interest in the common areas. The least common form of common-interest developments, which constitute about a quarter of all homes in the state, are cooperatives, where residents hold shares in a corporation that owns the building.