Another 5,000 new condo and homeowner association developments are expected to increase this year, according to initial data from the Foundation for Community Association Research.
The number of U.S. community associations, which includes homeowners associations, condominiums, and cooperatives, was approximately 355,000 in 2020, the most recent full year of available data. Units in these planned communities housed 74.1 million residents and accounted for 27.5% of the US housing stock. The foundation, a subsidiary of the Community Associations Institute, estimates that the number of communities will have grown to between 356,000 and 358,000 by the end of 2021. In comparison, the total increased by 4,000 each year in 2019 and 2020.
According to the foundation, within 2021, 58 to 63 percent were homeowners’ associations, 35 to 40 percent were condominiums and 2 to 4 percent were cooperatives.
While overall numbers are projected to increase in 2022, the percentage of housing in community associations as a proportion of the total housing stock is estimated to be between 25% and 27%, following a two-year period marked by record home purchase demand and the start of new housing.
According to Dawn Bauman, executive director of the foundation and senior vice president of government and public affairs at the Community Association Institute, current trends among younger consumers “looking for no-commitment housing options” are affecting the current pace of growth. "This trend is an incentive for developers to prioritize residential development over condominium development," she said in a press release.
In line with the trend, multifamily housing starts, which include construction of residential and condominium units, unexpectedly rose in December at the pace of early 2020, according to the US Census Bureau.
However, recent research also suggests that Gen Z consumers are more interested in owning property than Millennials and are also more open to living in the suburbs, presenting promising trends for both home builders and community associations. The 2020 US Census found that 65% of new single-family homes were built in a homeowner's community.
"Housing experts from the community associations are bullish on projections for new home construction as they scrutinize how homeownership preferences and the ongoing supply chain and labor shortages could disrupt growth," Bauman added.
According to the foundation's data, homes in community groups are estimated to be worth $9.2 trillion, a figure that could appeal to Generation Z, who also view homeownership as a wealth-building investment.
The states of the Sun Belt lead the USA in terms of both the number of municipal associations and the number of residents in them. In California, the most populous state, over 14 million people lived in 49,520 condominiums, homeowners' associations or cooperatives in 2020. Florida had the second highest number with 9.7 million residents spread across 48,940 federations. Texas rounded out the top 3 with 6.1 million people living in 21,470 communities.