How Are Homeowners Associations Capitalized Into Housing and Land Values?

Title:
How Are Homeowners Associations Capitalized Into Housing and Land Values?
Authors:
Meltzer, Rachel; Cheung, Ron
Abstract:
Private homeowners associations (HOAs) levy binding fees and provide local services to members. Both should be capitalized into the value of member properties, but the net effect is ambiguous. We construct the most comprehensive, longitudinal database to date on HOAs for Florida and estimate the impact of HOAs on property values. We find that properties in HOAs sell at a premium just under 5%. The premium is strongest immediately following HOA formation and declines over time, suggesting quick capitalization of HOA benefits. Properties in larger HOAs sell for less, and this is particularly true for properties in the biggest HOAs. Finally, properties located immediately outside of an HOA sell at a premium relative to other non-HOA properties, and this premium marginally decreases (increases) in the size (frequency) of neighboring HOAs.
Citation:
Meltzer, R. and Ron Cheung. May 2014. “How Are Homeowners Associations Capitalized Into Housing and Land Values?” Regional Science and Urban Economics 46: 93-102.
Publisher:
Elsevier
DATE ISSUED:
2014-05
Department:
Economics
Type:
Article
PUBLISHED VERSION:
10.1016/j.regsciurbeco.2014.03.005
PERMANENT LINK:
http://hdl.handle.net/11282/566782

Full metadata record

DC FieldValue Language
dc.contributor.authorMeltzer, Rachelen
dc.contributor.authorCheung, Ronen
dc.date.accessioned2015-08-13T10:33:59Zen
dc.date.available2015-08-13T10:33:59Zen
dc.date.issued2014-05en
dc.identifier.citationMeltzer, R. and Ron Cheung. May 2014. “How Are Homeowners Associations Capitalized Into Housing and Land Values?” Regional Science and Urban Economics 46: 93-102.en
dc.identifier.issn0166-0462en
dc.identifier.urihttp://hdl.handle.net/11282/566782en
dc.description.abstractPrivate homeowners associations (HOAs) levy binding fees and provide local services to members. Both should be capitalized into the value of member properties, but the net effect is ambiguous. We construct the most comprehensive, longitudinal database to date on HOAs for Florida and estimate the impact of HOAs on property values. We find that properties in HOAs sell at a premium just under 5%. The premium is strongest immediately following HOA formation and declines over time, suggesting quick capitalization of HOA benefits. Properties in larger HOAs sell for less, and this is particularly true for properties in the biggest HOAs. Finally, properties located immediately outside of an HOA sell at a premium relative to other non-HOA properties, and this premium marginally decreases (increases) in the size (frequency) of neighboring HOAs.en
dc.language.isoen_USen
dc.publisherElsevieren
dc.identifier.doi10.1016/j.regsciurbeco.2014.03.005en
dc.subject.departmentEconomicsen
dc.titleHow Are Homeowners Associations Capitalized Into Housing and Land Values?en
dc.typeArticleen
dc.identifier.journalRegional Science and Urban Economicsen
dc.subject.keywordPrivate governmenten
dc.subject.keywordHomeowners associationen
dc.subject.keywordProperty valuesen
dc.subject.keywordCapitalizationen
dc.identifier.volume46en
dc.identifier.startpage93en
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