It is believed that HOAs were first established in the US in the mid-1800s. Over the course of the first hundred years the scale of HOAs was relatively small. Unfortunately, there were examples of racial, religious and national origin discrimination in HOAs, where certain people were excluded by covenants and deed restrictions. While those covenants were ruled unenforceable in 1948, private contracts continued to discriminate until finally prohibited by the Fair Housing Act in 1968.
Growth in HOAs was observed starting in the 1960s when the Federal Housing Administration encouraged large-scale suburban residential development. There is evidence that local governments supported subdivision development as a means to reduce their costs, as HOAs take responsibility for some services formerly funded by municipal agencies, while still paying those taxes. This is certainly a rational argument set out by opponents of HOA living.
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