This Article considers the application of the Supreme Court's state-action theory to residential commmunity associations (RCAs), a form of housing and community governance that has experienced extraordinary growth in recent years. Fewer than 500 RCAs were in existence in the United States before 1960. In the early 1990s, it was estimated that 32 million Americans lived in 150,000 RCAs. A continuing boom in RCA construction has led to predictions that twenty-five to thirty percent of Americans will be living in RCAs by early in the next century. Steven Siegel argues that this trend, although largely unnoticed, carries significant implications for the structure of our government, the delivery of traditional public services, and the availability of constitutional protections.
Many RCAs exercise powers traditionally associated with local government. Such powers may be extensive, including the ownership of streets and parks; the regulation of land use and home occupancy; the delivery of services such as refuse collection, street maintenance, and security; and the assessment and collection of mandatory fees that may be considered the functional equivalent of real estate taxes. Although the traditional view of RCAs is that each homeowner consents to the regime or chooses to reside elsewhere, Siegel rejects this view and suggests instead that RCAs are the product of forces other than consumer choice, including local government landuse policies and fiscal pressure on local governments leading to the privatization of local government services. Because of the traditional view, RCAs rarely have been deemed state actors subject to the requirements of the Constitution. As private entities, RCAs regulate behavior in a way that is anathema to traditional constitutional strictures.
As with company towns earlier this century, RCAs pose a threat to the constitutional rights of millions of Americans. This threat warrants a principled judicial response. Siegel assesses four established theories of state action and argues that although many RCAs could be considered state actors by operation of one or more of these theories, a more comprehensive and systematic approach to state action should be developed to evaluate RCAs. Siegel provides an approach that accounts for the special characteristics of the RCA form and the legal and political environment in which the RCA operates.