that constitutes a compromise between urban conviviality and suburban priva-
tism." ³

At the same time, CAs can become enclaves of affluence separate from any
concern for the larger community around them. One academic critic of CAs
observes, " CAs are in the vanguard of the NIMBY (Not In My Back Yard)
movement across America." ⁴ The prominent economist and social commentator,
Lester Thurow, finds parallels between CAs and the dark ages of feudalism, citing
a "community in Califonia with a wall, a moat, a drawbridge, and a device called
a bollard that shoots a three-foot metal cylinder into the bottom of unauthorized
cars." ⁵ A study of gated communities, most of which are CAs (an estimated 10-20
percent of CAs are gated), sees them as "a dramatic manifestation of a new fortress
mentality growing in America." ⁶ The exclusivity of CAs may induce their members
to evade public service to a larger community. The money needed to pay for such
exclusivity can increase the costs of CAs.

In addition, within some CAs, governance can become rigid and undemocratic;
the CA may be governed by members who become oppressively uncompromising
in their interpretation of rules or it may resort to hiring professional managers, who
make all meaningful decisions based on narrow legal, technical and financial
criteria and very unyielding interpretations of association rules. Evan McKenzie,
in his critical study of CAs, charges that homeowners do not make the key decisions
in organizing and managing a CA. Lawyers, accountants, and professional manag-
ers make them. ⁷ When this happens an additional risk exists. Economists Oliver
Williamson and Janet Bercovitz point out, "Hardworking and conscientious though
many managers are, it is hardly unnatural they will tilt matters at the margin in their
favor." ⁸

To explore the issues surrounding the CA innovation in housing, this book will
offer a history of CAs and their membership organization, the Community Asso-
ciations Institute ( CAI). The CAI was founded in 1973 to serve as a clearinghouse
of information on CAs for developers, builders, homeowners, professional manag-
ers of CAs, and public officials. Its formation came at the beginning of the second
decade of a boom in CAs, because leaders in the housing industry saw a need for
such an organization. Any innovation is the product of a pioneering spirit. With CAs
and the CAI, that spirit resulted from a rare collaboration between business
associations and government agencies, accompanied by a strong market for this
type of housing. This book tells the story of that of that collaboration.

A CA is a group of all property units within a defined geographic area organized
into an association that each property owner joins automatically on purchasing a
home. The association is governed by binding documents that grant each member
voting rights and the right to use the CA's common property and require all members
to abide by the CA's rules and regulations. These documents also obligate all members

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