Financial Fitness


Pros and Cons of Buying a Planned Community Home

Posted at 4:06 PM, Dec 29, 2015
and last updated 2015-12-29 16:06:52-05

Buying a home? Thinking about a planned community? From the iconic Levittown in New York to Playa Vista in Los Angeles, planned communities feature both benefits and drawbacks.


1. A Set of Common Standards

Planned communities normally have homeowners associations (HOAs) that create guidelines restricting how homes can look within the neighborhood. These rules may limit the appearance and styles of homes that can be built. One neighborhood may only allow stucco homes with two-car garages in a particular color palette, while the planned community next door only allows two-story brick homes with one-car garages.

Homeowners associations can also set guidelines for yards and other items in the neighborhood. These directions prevent people from parking cars in their yards, keeping boats, RVs and jet skis in their driveways, or letting their landscaping grow out of control, which could devalue their neighbors' homes.

Some people love the consistent look of planned communities, as it sets a basic standard to which all homes must conform. This can increase the potential resale value of your home down the road.

2. Efficiency and Convenience

Planned communities are just that, planned. They often are structured to optimize traffic flow and access to neighborhood amenities enjoyed by everyone. Some planned communities take it a step further and incorporate commercial areas that include grocery stores, parks and restaurants within walking distance of everyone in the neighborhood.

3. Security

Many planned communities are gated and offer additional safety features like CCTV video surveillance and neighborhood watch patrols. The peace of mind that comes with these security measures is especially appealing to parents with young children, who can be free to play safely in the front yard. It is also common for planned communities to have lower speed limits for cars driving through, which improves the safety of kids (and pets) who may be running around.

4. Neighborliness

Getting to know your neighbors is far more likely in a planned community, where shared amenities like parks, swimming pools or tennis courts create opportunities for socializing. The homeowners association and community planning committees offer many ways to get involved. You will probably find neighbors who share your values and interests, as you all bought into the same lifestyle promised by the community.


1. HOA Fees

Planned communities have their downsides, too. One of these downsides comes in the form of monthly, quarterly or annual HOA fees. HOA fees can cover a variety of services depending on the planned community you live in. Some cover just common area maintenance and association accounting, while others include the upkeep of a community pool, basic cable and a clubhouse. The fees range from as little as a few dollars a month to as much as hundreds or even thousands of dollars a month in high-end areas.

2. New Owner Fees

HOA fees are not the only fees you may have to pay to live in a planned community. Many areas require new homeowners to pay a new owner fee that can range anywhere from $100 to a few percent of the purchase price. This money may go to the homeowners association, the original developer of the community, or a non-profit that the original developer specified. There normally is not any additional value to the homeowner when they pay this fee. Think of it is an entry fee to buy into the neighborhood.

3. Others Control What You Can and Cannot Do

The fact that others, mainly the homeowners association, can control what you can and cannot do is the biggest complaint many people have about planned communities. Some neighborhoods are stricter than others are, but those same positive restrictions above that keep your neighborhood resale value high can easily restrict what you can and cannot do on your own property.

You may not be able to have bonfires in your backyard or leave your trashcan on the side of your house. These small things may not be a big deal to some, but others will vow never to buy a home in a planned community so that they do not face these restrictions.

4. Lack of privacy

While the social aspect of a planned community might appeal to you, there is also the chance that familiarity may breed contempt. Every neighborhood has a busybody and with the population density of a planned community, not to mention the shared amenities, it is difficult to maintain complete privacy; some of your new neighbors may feel that they have the right to pry into your family's affairs.

If you are considering buying in a planned community, make sure you take all of the factors, both good and bad, into account. Some of the features may fall into both categories.

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