Why Don’t They Form an HOA? The Case of Chongqing, China

Many studies have emphasized the importance of homeowners association (HOA) in local governance in Chinese cities. Some homeowners' activism is also frequently reported in mass media. But a contradictory phenomenon is that the majority of private communities haven't set up an HOA yet. This paper examines this paradox both theoretically and empirically. My main argument is that many homeowners are satisfied with what an efficient market of private communities provides and don't want to get involved in local politics. The empirical study on three private communities in Chongqing suggests that the developer's behavior is efficient with regard to public amenities. This is indirect evidence for the efficiency of the market of private communities