ABSTRACT
Neighborhood associations assert comprehensive regulatory controls over housing and other property within their boundaries. In choosing a neighborhood association to live in, a homebuyer is also purchasing a neighborhood constitution. The shift to a collective form of private property ownership partly reflects the fact that the main functions of local government include protecting and increasing the value of a private investment in a home. Realizing the full potential of private neighborhood government will thus require two steps. First, the participants in the market for private neighborhood government will have to show greater creativity and willingness to innovate within the rules they face. Second, state governments will have to allow private neighborhoods wider flexibility to exercise a broad range of choice in constitutional design and other neighborhood governing arrangements. Just as individuals are free to fail in their personal choices, however, neighborhoods should be free to make their own mistakes.
