Abstract
A Homeowners Association (HOA) is a private organization that governs a community or neighborhood subdivision. The number of HOAs has increased significantly over the last few decades, and today nearly one in four Californians resides in a neighborhood governed by a HOA. This thesis attempts to determine if the continued proliferation of HOAs should be mitigated or perhaps encouraged by government intervention. Via a mixed methods approach, including a review of existing literature, regression analysis, and interviews, I analyze the ramifications of the growth in the number of HOAs in the Sacramento County area in California. Using a dataset from Metrolist Multiple Listing Service (MLS) containing home sales spanning September 2016 through December 2016 in Sacramento County, California, I performed quantitative hedonic regression analysis to determine how HOAs influence home values to determine if HOA exacerbate the affordable housing crisis in Sacramento County. Homes located in HOAs sell for 1.96 percent more than homes not in HOAs, holding all factors constant. When data is separated by zip code, there is a wide variance of HOA influence on home value, ranging from several percent positive effect, to zero effect, to several percent negative effect. Via interviews with housing experts in Sacramento County I tested ideas for specific policy interventions and sought to gauge people’s attitudes toward HOAs. Given the current mix of housing stock, HOA effects on home values, and interviewee attitudes surrounding HOAs, I conclude that government does not need to mitigate the number of HOAs in Sacramento. I offer policy ideas to enrich the public-private partnership between local government and HOAs, including developing a HOA formation toolkit to ease formation of new HOAs in existing neighborhoods, encouraging more collaboration and information sharing between local governments and HOAs, and local government offering best practices workshops for volunteer HOA leaders.