Deed Men Walkin: Back then, individual home ownership was the solution; presently, it is often seen as problem.

But if R-1 zoning is moribund, what about
residential “planned communities”? They
have an inner redoubt: the declaration of
covenants, easements and restrictions to

The Pennsylvania Lawyer 37 May/June 2022
which all owners contractually agree, and
the provisions of which are referenced in
every deed: large lots, one single-family
dwelling per lot, no other uses involving
greater density nor, heaven forfend, any
business or commercial activity.
And many of them have actual walls, of
course, or at least gates. In our country as a
whole, gated communities began a boom
in 1995 and the early 2000s and grew
faster from 2010 on than in the previous
three decades. Keith C. Veal, “The Gating
of America: The Political and Social Consequences of Gated Communities on the
Body Politic,” Ph.D. dissertation, (Political
Science), University of Michigan 2013.
Of course, we hear complaints about the
micromanagement of life in such communities, often involving flying the flag or
some other ideological display. Draconian
restrictions, it seems to me from out here
in the country: I represented a couple
buying into such a community years ago.
Despite the fact that my clients had received the bylaws and other homeowners
association documents as required by law,
a member of the board of the homeowners
association, my prototypical “Deed Man,”
was at settlement in person, spouting
ostensibly friendly but unmistakably firm
reminders that no plastic children’s toys
could be left in the yard at any time, that
curtains had to have a certain appearance
from outside, that all machinery and
vehicles must be garaged at all times. …
I’m sure the Deed Man’s wife would have
come along, too, except that the local
chapter of the Stepford Club was meeting
that afternoon. But my clients did not
seem at all dismayed by the gent’s officious
sermon.
HOAs are, indeed, “analogous to mini-governments,” as the court said in Locust Lake
Village Property Owners Ass’n v. Wengerd,
Pa. Cmwlth 2006, 899 A.2d 1193. But,
like my clients, many people are willing to
submit to the intimate supervision of this
extra layer of private governance. They accept the obligation to pay for the increased
security and neighborhood control. They
may grumble about the restrictions, but to
date there are no reported cases under the
2018 statute that gave the Bureau of Consumer Protection jurisdiction over homeowner complaints concerning HOA
practices, 68 Pa. C.S.A. 5322.
So, can the use of restrictive covenants in
such communities preserve single-family
districts in the suburbs even when singlefamily zoning has passed into history?
This is not to imply or recognize any
comparison, for good or ill, between
single-family dwelling covenants and
racially restrictive covenants. “The suburbs” are, by everyone’s reckoning, between
41% and 45% racially integrated. This is
true even of gated communities, although
minorities are more likely to be renters
therein (gatedcommunitynews.com/
gated-community-data). Nor has research
disclosed any indication that planned communities are segregated to any greater degree, except as a side effect of the greater
wealth required to purchase those homes.
Nonetheless, the trajectory of the elimination of race-based deed covenants may
provide a predictive analogy.
The Supreme Court first denied injunctive
relief of race-based covenants in Shelley v.
Kraemer, 334 U.S. 1, 68 S. Ct. 836 (1948).
Subsequently, it held that even the award
of damages for breach of such private contracts would constitute illegal state action.
Barrows v. Jackson, 346 U.S. 249, 73 S. Ct.
1031 (1953). Finally, public opinion having come to largely disfavor them, the federal government outlawed race-based
covenants in the Federal Fair Housing Act
of 1968. Private deed covenants restricting
property to single-family use might suffer a
similar piecemeal demolition.
Decisional law on real property covenants
looks likely to retard such a process in our
commonwealth, at least initially. If you
have ever tried to research whether a client
can evade a deed restriction as to use,
building location, number of buildings or the like, you know the answer is usually no.
Things haven’t changed much since Kajowski v. Null, 405 Pa. 589, 177 A.2d 101
(1962), and see Vernon Twp. Fire Department, Inc. v. Connor, 579 Pa. 364, 855
A.2d 873 (2004). Our courts usually begin
by reciting that such restrictions are “disfavored” as restraints on alienation, but they
generally end by finding the covenants
enforceable. Even longstanding breaches
of the covenant at issue are often characterized as “minor” and will not bar enforcement. Such covenants are, after all, a
private contractual obligation the landowner freely and voluntarily undertook.
A federal statute outlawing deed-restricted
communities would be in conflict with
existing Pennsylvania law, which explicitly
provides that zoning ordinances may not
prohibit planned communities. 68 Pa.
C.S.A. 5106.
Based on the breathtaking pace of policy
revision since 2020, I can’t dismiss the possibility of even more injudicious and drastic changes. The federal government could
always do what Lenin did: simply outlaw
private ownership of land. (Incongruously,
as we in the U.S. are rejecting single-family
suburban dwellings, citizens of the former
Soviet Union are enthusiastically embracing it now that private ownership of land is
again legal: Moscow and St. Petersburg are
ringed with “dacha” communities, Levittown-like clusters of tiny farms.) Or, to
avoid payment of just compensation, the
government could use private entities to
acquire land, which those entities, perhaps
in exchange for certain concessions, could
then declare “public,” analogous to the
government’s use of private social media
companies to censor political speech. See
“The Controversy Over Bill Gates Becoming the Largest Private Farmland Owner in
the United States,” Vox, June 11, 2021.
But if you’re not ready to believe such
things could happen here, consider other
means at the federal government’s disposal.
First and foremost, taxation. As Stephanie
Kelton advises in her book The Deficit Myth: Modern Monetary Theory and the
Birth of the People’s Economy, (Hachette
Book Group 2020), taxation is primarily a
tool of social planning. Changes in tax
laws, like capital gains taxation and elimination of the stepped-up basis, will go a
long way toward breaking up privately held
large parcels of land. Tax policy can also be
used against planned communities. HOAs
are supposed to demonstrate that their activities benefit the “community,” a term
that is not defined but is supposed to not
mean only dues-paying homeowners. If
they succeed, although they are still required to file tax returns, they have the option of registering as an exempt nonprofit
social welfare organization. By regulation
or legislation, those criteria for exemption
could be tightened or the exemption eliminated entirely. That, of course, will result
in dues and assessment increases, making
planned community home ownership less
attractive, which in turn will reduce or destroy the generally higher property values
enjoyed by homeowners in planned communities. If the HOAs can no longer provide, at any endurable cost, the road maintenance, common area amenities and economic compatibility for which owners pay a premium, residents will soon be flocking to swell the ranks of the 80% majority needed to dissolve the association. (68 Pa. C.S.A 5220.) The federal government could even provide financial incentives for residents to sign such petitions. That might be impairment of contract, but it is only state governments that are bound by the Contracts Clause, U.S. Const., art. 1, Section 10.