Gordon on Private Communities

22 August 2006 at 10:11 am Peter G. Klein Leave a comment

| Peter Klein |

My favorite urban economist, USC’s Peter Gordon, on private communities:

Robert Nelson has documented the current migration into private communities which now house 55-million Americans. Governance is by homeowners associations (HOAs) and markets are vetting the trade-offs of property rights protections vs rights losses that most property owners look for. The fly-in-the-ointment is an oldie: the problems of democracy are well documented and are real at all levels of government, whether it be federal, state, local or private.

This is why Spencer MacCallum has predicted that HOAs are just a waystation and better forms of governance will replace them. He suggests the hotel as his model, where governance is by contract rather than by democracy.

This is now unfolding. The NYTimes.com reports, “A High-Priced Sliver of Hotel Luxury … NOT everyone can afford a posh second home in NY city, but an increasing number of people may soon be able to own at least part of one, thanks to the emergence of time-share properties in urban areas. Once found exclsively in resort areas, time shares are now steadily expanding into big cities.”

For more on voluntary, private communities — both formal and informal — see the excellent collection The Voluntary City: Choice, Community, and Civil Society, edited by Gordon, David Beito, and Alexander Tabarrok (University of Michigan Press, 2002).(Disclaimer: My full name is Peter Gordon Klein and one of my grandfathers was a Peter M. Gordon, so how can I not like a Peter Gordon?)