HOAs and their roots in segregation

Most homeowners have heard of the term HOA or Homeowners Association. When buying a home, it’s pretty common to find that an HOA runs the neighborhood with a set of rules and regulations meant to keep the poverty values up and the community looking orderly. However, these rules can seem nit-picky at times, and homeowners will find themselves needing permission from this organization to plant a new tree on their property or change the exterior color of their home. These issues with HOAs are not a recent development. For some minority homeowners, HOAs have presented much more severe problems, such as racial discrimination and microaggressions. 

Homeowners associations began in the mid 19th century; it wasn’t until the 1960s that these organizations rose to popularity as the suburbs expanded. HOAs were formed to keep “unwanted residents” out of communities. These organizations intended to filter out minorities and keep them from moving into their neighborhoods to avoid a loss in property value, as redlining was still rampant at the time. Homeowners associations contributed significantly to the loss of generational wealth in minorities by excluding them from the real estate market. 

After the fair housing act of 1968, which was meant to prevent racism and discrimination and eradicate redlining, marginalized people were hopeful about buying their first home. However, the damage had already been done, and HOAs were here to stay, continuing to be that roadblock for people of color who wanted a chance at the real estate wealth they missed out on before the 1960s. 

Today HOAs are still around and can be found in almost every neighborhood. It’s difficult to escape them. Some HOAs still discriminate against homeowners but in much more subtle ways, such as over-policing homeowners and other microaggressions meant to make it a hostile environment for those they deem don’t fit into their neighborhood. Some real estate developers and HOAs claim their main goal is to keep property values high. However, their tactics are rooted in the segregation era. Redlining is done more subtly now, and HOAs are some of the most significant contributors to this problem. 

Statistics estimate that 60% of new homes and 80% of homes in subdivisions have HOAs. These neighborhoods, on average, have primarily white and Asian residents when compared to non-HOA communities. These homes will also sell for 4% higher than homes in non-HOA areas. Data like this proves that discrimination is still rampant in real estate, and marginalized homeowners are still being left out of one of the most significant wealth-building assets by organizations set during the segregation era. Racism is more subtle but still present for potential minority homeowners; this lack of equal access to homeownership is one of the most significant contributing factors to the racial wealth gap.