Private Idahoes

John McClaughry from the August/September 1995 issue

(Page 2 of 2)

In response to the building industry's pleas, the Federal Housing Administration in 1963 became an aggressive booster of RCAs. For FHA bureaucrats, planned and controlled RCAs made it easy to predict the economic viability, and thus the insurability, of a development 20 or 30 years down the road. It was also easier to impress Congress by "running up the numbers" when the developers built and sold 1,000 homes at a crack. The larger the project, the more interested members of Congress were in seeing that it got FHA approval.

From the standpoint of local government, at least initially, RCAs offered a terrific deal. A private developer would build needed new housing, which would add to the tax base. In return for receiving permission to exist, the RCA would provide many of its own municipal services at the homeowners' expense, thus protecting the municipality from additional costs. In some jurisdictions local governments even offer a property tax rebate to RCA members to offset their RCA assessments for services provided elsewhere by the municipality.

To prospective home buyers, RCAs promise certainty in a world of unforeseeable change, especially in protecting the homeowner's investment against depreciation. They promise a high quality of life, where sound planning and attractive amenities respond to the home buyer's desires. They offer resident control of many "public" services--a touchy point to critics--instead of leaving the homeowner at the mercy of the larger municipality, which may be controlled politically by people from the other side of town. They offer a social life in a relatively homogeneous community, an opportunity for town-meeting-style democracy, and a strong sense of personal efficacy.

Indeed, the success of RCA-type experiments as diverse as Arden, Delaware, Ft. Ellsworth Condominiums and Reston, Virginia, and the private city streets of St. Louis prove to public-choice economist Fred Foldvary that it is feasible, as well as infinitely desirable, to organize the proprietary delivery of "public" services on a territorial basis. Drawing on the work of Spencer Heath and his grandson, Spencer Heath MacCallum, Foldvary's Public Goods and Private Communities offers the proprietary community as the model for a happy future: All services performed in support of property by governments can be delivered far better through the use of contract, covenants, and user fees than by politicized government bureaucracies. He appears to endorse MacCallum's dream of a network of proprietary communities united into a polycentric federation that simply pushes aside traditional units of government, becoming, in effect, local government.

The critics of the RCA, however, are many and varied, and Evan McKenzie, a lawyer and associate professor of political science at Pennsylvania's Albright College, has earned a place in their vanguard with Privatopia: Homeowner Associations and the Rise of Residential Private Government. His case against these "privatopias" goes like this: RCAs are based on an "ideology of hostile privatism," where the supreme goal is the protection of property values, to which all of the nobler aspects of human life are subordinated. RCAs glorify a "culture that links ownership of private property with freedom, individuality, and autonomy, rather than with responsibility to the surrounding community." McKenzie even calls RCAs "socialism by contract"--although he concedes that it is a defective socialism since RCA bylaws don't require others to lift up the downtrodden who, due to economic reverses, can no longer cover their RCA assessments.

McKenzie attacks the RCA--which he calls a common interest development (CID)--for exhibiting a "communalistic, even cult-like isolationist nature." He is offended that in a poll of residents at the giant Leisure World RCA in Southern California, 92 percent of the respondents rated security "very important," and were happy to have the development patrolled by 300 private security officers.

He even sees the CID as a corporatization of the home. The individual in a CID, he says, is subservient to a corporation and its detached, expert managers who carry out their functions in a way that makes life easier for them, not the residents. The CID idea, he says, begins with a plan, then property, then rules to protect the property, then a physical city, and then people who live in the city and obey the rules, or else.

"In short," writes McKenzie, "a CID is a prefabricated framework for civil society in search of a population. The population may come and go, but the property and the rules will remain, and the population will remain in service to the rules." CIDs undermine the "real city," charges McKenzie. They are illiberal and anti-democratic, and they represent, to borrow Robert Reich's phrase, "the secession of the successful" from the disaster areas they left behind.

If CID living is as onerous as McKenzie claims, it's a wonder anybody actually lives in them. But McKenzie is at pains to demonstrate that CIDs are not the product of a voluntary Lockean contract among people who wish to escape the state of nature in return for common benefits. Instead, he says, the associations are a compulsory residential nightmare. His wrath is heightened by horror stories about tyrannical enforcement of CC&Rs: a woman taken to court because her dog weighed more than 30 pounds; a man who sued his senior-citizen community because it disallowed residence by his new 45-year-old wife; and a man sued by his RCA because he erected a fence to keep his young son from wandering over a 400-foot cliff. He describes how RCAs rely upon state government to bolster their enforcement and collection powers, while at the same time bidding government to remain outside the gates.

McKenzie builds much of his attack on the highly dubious proposition that the residents did not consent to this oppressive private government. According to him, they found themselves living in CIDs because they had no realistic options for living anywhere else. This will probably come as a surprise to CID residents, who thought they chose CID ownership of their own free will, and to non-residents who must wonder how they came to be spared.

At times, McKenzie grants that residents were not forced to join CIDs against their will. But that merely means they chose to join, in which case McKenzie views them as small-minded, selfish, illiberal, greedy dropouts from the great duty of life--namely, to make municipal government work and to struggle bravely toward economic justice for all instead of feathering their own nest.

Foldvary's shining RCA vision is a polycentric world of proprietary communities, wisely and efficiently operated with the consent of the residents by disinterested princes akin to Swiss hotel managers. McKenzie's horrible CID nightmare is an equally polycentric world of walled and guarded enclaves of the rich, petty, and socially irresponsible, where every generous impulse and mark of individuality is confined by a CC&R designed to advance the single-minded goal of property value protection and enhancement. Between these two poles lies Robert Jay Dilger's Neighborhood Politics.

Dilger, a political scientist at West Virginia University, is not seeking to grind an axe. His goal is to illuminate the origins, principles, development, and policy questions relating to the RCA movement. He blends exhaustive knowledge of his subject with an exemplary clarity of presentation. Without rhetorical flourishes or involved economic and legal analysis, he makes clear the various cases for and against RCAs. His conclusions are generally favorable to RCAs, and his recommendations include offering better information to prospective buyers to avoid ugly surprises later on, achieving better relations with local government, and providing representation for renters. He is supportive of the RCA as a channel for political activity, and as a forum for the practice of civic virtue.

RCAs obviously meet an important need for millions of people. In a society where government all too often proves unable to defend public order, assure personal security, prevent destruction of property values, spend tax dollars wisely, deliver high-quality services, and refrain from misguided social engineering, RCAs offer an attractive alternative. If one believes it is everyone's solemn duty to remain, suffer, and sometimes perish in the midst of over-governed but under-served urban disaster areas in the name of civic altruism and economic justice, then the RCA is a cowardly escape. On the other hand, if one believes in using one's resources to acquire the ownership of a decent home for one's family, or for one's retirement years, in safe and congenial surroundings, even at the price of some intrusive regulation of private choices, then the various forms of planned communities will remain an attractive option. Whether governments will allow themselves to be replaced by a RCA federation remains to be seen, but it's far from the worst idea to come down the pike.

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