The Relationship Between the Rise of Private Communities and Increasing Socioeconomic Stratification

In this paper, Evan McKenzie examines the rise of common interest housing, which takes the form of private homeowners’ associations, condominiums, and housing cooperatives. The relationship between the increase in residential segregation by income and wealth, and the increase in income inequality is a well-documented trend in the United States. Research findings concur with the Tiebout model: as people’s economic fortunes diverge, their opportunities grow or shrink, and groups with greater or lesser resources find themselves living in different neighborhoods with different lifestyles. To more fully explain this relationship, McKenzie introduces a third trend, the rise of common interest housing, which takes the form of private homeowners’ associations, condominiums, and housing cooperatives—perhaps more commonly thought of as “gated communities”. McKenzie reveals that common interest housing is a complicating factor in the relationship between income inequality and socioeconomic segregation. Ultimately, he concludes that common interest housing is simply a tool for real estate development, public policy, and consumer choice—and as such, responsibility for its impacts rests with developers, and the consumers who use it.

This paper was presented at the Lincoln Institute’s annual Land Policy Conference in 2014 and is Chapter 11 of the book Land and the City.