Decision to make a HOA: Empirical evidence
The data of 82 homeowners associations (HOAs) in Moscow and Perm regions that underpin HOA formation are studied. Physical conditions of the housing stock, size of the buildings and socio-economic parameters of homeowners community are revealed; ability of tenants to resolve the collective action problem in operating housing infrastructure is shown to be of primary importance. Thus HOA formation by homeowners is a signal of their ability to manage a house. Wealth and education also matter for the decision to make a HOA.