While some variants of community associations existed in California in the early 1900s, the first modern planned development happened in Levittown, New York, built in a potato field in New York by William Levitt, with the primary goal of selling to veterans of World War II [and likely because the veterans had access to very reliable loans through the GI Bill]. Levittown had a series of restrictive covenants that restricted certain land uses and prohibited actions such as hanging laundry lines in the front yard. At the time, there was no association to enforce those rules, so any violation of the covenants would be handled through local courts. Levittown was built using assembly line processes, with crews of workmen assigned to specific building tasks and off-site fabrication. The development was completed in near record time and created deeply affordable housing with the homogenous uniformity that the 1950s became known for.
Levittown was a true success story, and many other developers started to try to build similar comprehensive communities on a larger scale. By the mid-1950s, mandatory membership in homeowner associations would accompany a purchase in one of these complete communities, ensuring that purchasers would be obtaining a comprehensive “design vision” rather than just getting a run-of-the-mill property. The Urban Land Institute [a primary proponent of homeowner associations in these growing large-scale communities] suggested that the homeowner associations handle things like establishing recreational activities for children as a central function of the HOA, conceptualizing it more as a way to establish the culture of the community than as a means of prohibiting actions. ULI suggested passing control of the HOA to homeowners by the time 75% of the units in a development were sold; hence, most HOAs tend to be volunteer-operated quasi-microgovernments.
In 1963, under pressure from the Urban Land Institute, the Federal Housing Administration approved mortgages for condominiums and dwellings in subdivisions, but only if there was a Homeowners Association. The FHA promotion of HOAs led to widespread expansion of the concept; no longer was the HOA a concept applied to enormous community developments, now it was applied to singular neighborhoods at a small scale and to singular buildings. The focus of HOAs shifted from creating a specific community culture to maintaining common property and providing specific services. In the 1970s, the building process shifted from massive community building to infilling in built-out neighborhoods and creating small community associations within existing neighborhoods. Where in 1962 there were fewer than 500 associations, by 1973 there were roughly 15,000 associations. In 1977, the Clean Water Act required all real estate development plans for stormwater flow and runoff, oftentimes requiring runoffs that handled excess stormwater. The detention areas were able to serve multiple homes at once, which encouraged the use of common areas. For developers, the Clean Water Act softly pressured further growth of HOAs to manage and maintain spaces for runoff. The growth of HOAs continued from 1977 onward, and estimates are that there are somewhere in the ballpark of 370,000 HOAs today.