Quick Guide to Pros & Cons of Planned Communities

Today's real estate market offers a greater array of housing choices than ever before, including various types of planned communities and multi-family developments. These range from small townhouse developments of 50-100 units to massive planned communities with integral recreation and commercial areas and thousands of homes.

There are a number of pros and cons to this type of living and your choice to consider a planned community will depend as much on personal preferences as investment considerations. Of course these developments can vary widely in price, location, and amenities, so what is true of one planned community may not apply to another.

Pros:

There are a number of potential advantages for purchasers of homes in planned communities. Consider how these apply to you when determining your suitability for this type of living.

þ       Price - While there are planned communities offering homes in every price range - including the $1,000,000+ level - in general you will probably be able to find multi-family homes priced below single family houses in the same market. This makes some planned developments an ideal place to shop for a starter home.

þ       Security - Many communities offer gated access, patrols, and other security features. Even in communities with no formal security may offer a greater level of safety due to the higher housing density.

þ       Convenience - Many larger communities include retail and professional buildings, allowing residents to access shopping and other services without leaving the community.

þ       Amenities - The large number of homes in some projects allows the developer to include a fairly large amenity package in the standard planned development. Typical features include community activity buildings, swimming pools, tennis courts, and preserved open space. Some communities are built around major amenities such as golf courses or in oceanfront or other extraordinary locales.

þ       Maintenance - Most planned communities provide normal ongoing maintenance - lawn mowing, leaf removal, etc. Some developments also handle periodic major maintenance such as exterior repainting.There are many pros to community living, though these issues are more important to some purchasers than to others.

Cons

There are also a number of negatives that should be seriously considered before you purchase a home in a planned community. Many of these items will not be and issue with some people while they will make others miserable. Consider these factors in the context of your everyday life and honestly assess the impact.

þ         Density - Planned communities offer all types of housing, often including single-family homes, but in general the density is much higher than standard single-family housing. When complete, these communities can crowd a large number of people into a relatively small area, creating traffic and congestion problems.

þ         Lack or privacy - The density of the community also detracts from the general privacy level available.

þ         Difficulty of resale - Purchasing a unit in a large ongoing development can put you in a difficult position if you choose to resell within a relatively short period. The large number of units can generate a considerable inventory of available units - all competing with new product from the developer.

þ         Maintenance fees - Condominium and planned communities charge maintenance fees. These fees can be considerable - several hundred dollars a month in most cases - and must be paid. Failure to pay can result in legal action by the homeowner's association (and unpaid fees can become a lien against the property).

þ         Lack of freedom - Planned communities usually have a variety of restrictions on usage and changes to the property. Chances are that you will not have the right to repaint your home in a different color - even if it is a single-family unit. The restrictions may cover pet ownership, parking, outdoor furniture, etc., and may be subject to change by the owner's association.

þ         Disputes with neighbors - When the developer completes the project, control of the community is turned over to a homeowner's association. While many associations consist of well meaning and dedicated people, it is an unfortunate fact that many petty and unreasonable people manage to get elected to these boards. These would-be community tyrants can cause considerable discontent within the development.

It's important to consider these issues before committing to a purchase and realizing too late that planned community living is not for you.