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The social functions of private neighborhood associations: the case of homeowner associations in urban China

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THE SOCIAL FUNCTIONS OF PRIVATE NEIGHBORHOOD ASSOCIATIONS:
THE CASE OF HOMEOWNER ASSOCIATIONS IN URBAN CHINA

by

Feng Wang

A Dissertation Presented to the
FACULTY OF THE GRADUATE SCHOOL
UNIVERSITY OF SOUTHERN CALIFORNIA
In Partial Fulfillment of the
Requirements for the Degree
DOCTOR OF PHILOSOPHY
(PUBLIC ADMINISTRATION)

December 2008

Copyright 2008 Feng Wang

ii
DEDICATION

I dedicate this dissertation
to my father Baosen Wang
and to the memory of my mother Qiuzhen Liang

iii
ACKNOWLEDGEMENTS

My gratitude goes first to my dissertation committee—Dr. Terry L. Cooper, Dr.
Shui-Yan Tang and Dr. Eugene Cooper. I thank my dissertation chair, Prof. Terry L.
Cooper, for his invaluable encouragement, insightful guidance and enthusiastic
support. I deeply appreciate his genuine interest in my research as well as his
constructive comments on this dissertation. It has been a great fortune to study under
his guidance. I also thank Prof. Shui-Yan Tang and Prof. Eugene Cooper for their
insightful suggestions on the research design and theoretical underpinnings of this
study, and for their thorough editing of the drafts of my work.

Over the years at the University of Southern California, many other professors and
friends greatly supported my research. I wish to express my great appreciation to
them: Prof. Peter J. Robertson, Prof. Richard Sundeen, Rosie Sundeen, Bin Chen,
Supamas Trivisvavet, Xueyong Zhan, Kyu-Nahm Jun, Thomas Bryer, Lili Wang,
Jun Delfin, Hui-O Liu, Ellen Shiau, Mahabat Baimyrzaeva, Yan Li and Yuan Li.

I owe many thanks to all the interviewees who took time from their responsibilities
to accept my interviews. Without the data and valuable experience they shared, I
could not have finished this dissertation. I also greatly appreciate Prof. Youhong
Chen of the School of Public Administration at Renmin University of China for her
generous help and expertise. Without her, I would not have had access to the Beijing

iv
homeowner association activists. In addition, I very much appreciate the support of
the Haidian Governance and Community Institute members—particularly, Mr.
Ruoyan Cai, Jing Zhao and Jinlei Feng—in my fieldwork in China.

I also thank Dr. Gordana Rabrenovic of the Department of Sociology and
Anthropology at Northeastern University for sharing her neighborhood organization
surveys with me.

I owe my great appreciation to my brothers and sisters in Los Angeles and Ann
Arbor, Michigan. Without their care and support, the completion of this dissertation
would have been impossible.

My greatest personal gratitude and love go to my family members. My parents and
older sister have been supportive of my academic pursuits without any reservations.
Their enduring love and continuing prayers are the best support to me. I reserve my
deepest gratitude for my husband, Haitao. No words fully can express my
appreciation for his love, support and patience over the years.

v
TABLE OF CONTENTS

DEDICATION .............................................................................................................ii

ACKNOWLEDGEMENTS ........................................................................................iii

LIST OF TABLES ....................................................................................................viii

LIST OF FIGURES ....................................................................................................ix

ABSTRACT.................................................................................................................x

CHAPTER 1: INTRODUCTION ................................................................................1
1.1 The Social Functions of Private Neighborhood Associations in the United
States ..........................................................................................................2
1.1.1 Resolving Neighborhood Issues..............................................................3
1.1.2 Improving Civic Engagement and Neighborhood Democracy...............5
1.2 Homeowner Associations in Urban China......................................................6
1.2.1 The Emergence of Chinese HOAs ..........................................................8
1.2.2 Driving Forces Behind the Emergence of HOAs in China...................11
1.2.3 Unique Nature of Chinese HOAs .........................................................16
1.2.3.1 Difference from Other Types of Chinese Community-level
Organizations ..............................................................................17
1.2.3.2 Difference from Western HOAs ................................................25
1.3 Research Questions ........................................................................................27
1.4 Significance of the Research ..........................................................................29
1.5 Structure of this Dissertation..........................................................................31

CHAPTER 2: RESEARCH METHODS ...................................................................34
2.1 Interview Surveys of HOA Leaders and Staff ...............................................36
2.1.1 Development of Survey Instruments.....................................................38
2.1.2 Survey Instruments Description............................................................41
2.1.3 Sample Description ...............................................................................42
2.2 Interviews with HOA General Members .......................................................45
2.3 Participant Observation................................................................................. 46
2.4 Archival Research ..........................................................................................47
2.5 Research Methodology ..................................................................................48

vi
CHAPTER 3: INSTITUTIONAL ENVIRONMENT OF HOMEOWNER
ASSOCATIONS IN URBAN CHINA ......................................................................50
3.1 Institutional Arrangements Related to HOAs in China..................................50
3.1.1 Organizations HOAs Need to Work with .............................................51
3.1.1.1 Street Offices and District Housing Administrative
Departments .................................................................................51
3.1.1.2 Residents’ Committees ................................................................54
3.1.1.3 Real Estate Developers ................................................................55
3.1.1.4 Property Management Firms........................................................56
3.1.2 Regulations on Chinese HOAs..............................................................59
3.1.2.1 Central Governmental Regulations..............................................59
3.1.2.2 Local Governmental Rules...........................................................73
3.1.2.3 HOA Constitutions: Homeowners’ Covenants and HOA
Rules and Procedures ...................................................................74
3.2 The Impact of Regulations on the Development of Chinese HOAs ..............77
3.2.1 Difficult to Establish and Register ........................................................77
3.2.2 Difficult to Operate and Develop..........................................................89

CHAPTER 4: DETERMINANTS OF CHINESE HOMEOWNER
ASSOCIATIONS’ PROBLEM-SOLVING EFFECTIVENESS.............................102
4.1 Types of Neighborhood Issues.....................................................................103
4.2 Theoretical Framework ................................................................................113
4.2.1 Contextual Factors ..............................................................................114
4.2.1.1 Neighborhood Size.....................................................................114
4.2.1.2 Neighborhood Socioeconomic Status ........................................115
4.2.1.3 Neighborhood Age.....................................................................116
4.2.1.4 The Number of Neighborhood Issues ........................................117
4.2.2 Organizational Factors ........................................................................118
4.2.2.1 Leadership Styles .......................................................................118
4.2.2.2 Resources ...................................................................................121
4.3 Methods........................................................................................................126
4.3.1 Variables and Measures ......................................................................127
4.3.1.1 Dependent Variables ..................................................................127
4.3.1.2 Independent Variables................................................................133
4.4 Findings and Discussion ..............................................................................138
4.4.1 Contextual Factors ..............................................................................140
4.4.2 Organizational Factors ........................................................................141
4.5 Concluding Remarks....................................................................................149

vii
CHAPTER 5: THE IMPACT OF ORGANIZATIONAL INTERNAL
GOVERNANCE ON CIVIC AWARENESS AND PARTICIPATION .................154
5.1 Literature Review.........................................................................................158
5.1.1 The Impacts of HOAs on Democratic Governance ............................158
5.1.2 Internal Governance of Private Neighborhood Associations..............163
5.1.2.1 Governing Structure...................................................................164
5.1.2.2 Operation of Association Boards: Democratic or Autocratic? ..168
5.1.2.3 Leadership..................................................................................173
5.2 Methods........................................................................................................176
5.2.1 Variables and Measures ......................................................................177
5.2.1.1 Dependent Variables ..................................................................177
5.2.1.2 Independent Variables................................................................178
5.3 Findings and Discussion ..............................................................................180
5.3.1 Descriptive Analysis of Chinese HOA Internal Governance..............180
5.3.1.1 Governing Structures .................................................................180
5.3.1.2 The Operation of HOA Committees ..........................................184
5.3.1.3 Leadership..................................................................................188
5.3.2 Analysis of the Impacts of HOA Internal Governance on Citizen
Participation ........................................................................................194
5.3.2.1 Governing Structure...................................................................197
5.3.2.2 The Operation of HOA Committees ..........................................200
5.3.2.3 Leadership..................................................................................202
5.3.2.4 Control Variables ......................................................................203
5.4 Concluding Remarks....................................................................................203

CHAPTER 6: SUMMARY AND CONCLUSIONS ...............................................210
6.1 Summary of Major Empirical Findings and Practical Implications.............210
6.2 Limitations and Future Research .................................................................225

BIBLIOGRAPHY....................................................................................................228

APPENDICES .........................................................................................................242
APPENDIX 1: Survey on Homeowner Associations’ Governance Ability ......242
APPENDIX 2: Survey on Homeowner Association Leaders’ Opinions ...........257
APPENDIX 3: Survey of General Homeowner Association Members.............264

viii
LIST OF TABLES

Table 1.1 Comparison of Non-Governmental/Non-Profit Organizations at the
Community Level in Urban China...........................................................20

Table 2.1 Types of Interviewees ................................................................................37

Table 2.2 Descriptive Statistics for Sample HOAs..................................................44

Table 3.1 The Importance of Factors that Impact HOA Operations........................90

Table 4.1 Neighborhood Issues Faced by Urban Neighborhoods in China...........106

Table 4.2 The Seriousness of Neighborhood Problems Facing Chinese HOAs ....108

Table 4.3 Neighborhood Problems Addressed by HOAs ......................................112

Table 4.4 Types of leadership Styles .....................................................................120

Table 4.5 Descriptive Statistics for Variables in the Multiple Regression
Models....................................................................................................132

Table 4.6 Multiple Regression Analysis of HOA Problem-Solving
Effectiveness ..........................................................................................139

Table 4.7 District Governmental Attitudes Toward HOAs....................................148

Table 5.1 Descriptive Statistical Summary of Sample HOAs and Their
Internal Governance...............................................................................186

Table 5.2 Reasons for Serving as the Director of HOA Committees ....................192

Table 5.3 Multiple Regression Results on Resident Participation.........................195

Table 5.4 Ordered Logit Regression Results on Increased Civic Awareness of
Neighborhood Issues..............................................................................196

Table 5.5 Regression Analysis of Choice of Governing Structures ......................198

ix
LIST OF FIGURES

Figure 1.1 Homeownership in China, 1990-2006......................................................13

Figure 3.1 Power Relationship Structure ...................................................................52

Figure 3.2 The Regulatory System on HOAs in the Newly Developed Urban
Residential Neighborhoods ......................................................................60

Figure 3.3 Procedures of Establishing an HOA.........................................................69

Figure 5.1 Chinese HOAs’ Governing Structures...................................................183

Figure 5.2 Openness of HOA Committee Meetings................................................185

Figure 5.3 Frequency of HOA Committees’ Communication with Residents........187

Figure 5.4 The Average HOA Membership Meetings Held Per Year ....................188

Figure 5.5 Perceived Residents’ Ability to Resolve Neighborhoods Issues ...........189

Figure 5.6 Perceived Resident Ability to Improve Governmental Responsiveness
to Neighorhood Need .............................................................................190

x
ABSTRACT

This dissertation investigates newly emerging Chinese Homeowner Associations
(HOAs) and two specific social functions they serve in neighborhood governance in
urban China—solving neighborhood problems and promoting civic participation.
The analysis of this study is based on data collected through face-to-face interviews
with leaders and general members of registered HOAs in Beijing, the examination of
various documents and participant observation of HOA affairs.

This study finds that the existing external institutional environment does not favor
the operations and future development of Chinese HOAs. The incomplete and
ambiguous regulations governing Chinese HOAs significantly impair HOAs in
carrying out their social functions. The lack of enforcement of HOA regulations
allows other organizations with competing interests to interfere with Chinese HOA
operations and development.

This study shows that Chinese HOAs demonstrate different degrees of problem-
solving effectiveness under similar unfavorable institutional environments. The
findings reveal that the impacts of neighborhood and organizational factors on HOA
effectiveness differ in solving the two most prominent types of neighborhood
issues—namely, issues involving developers and property management firms. Local
governments’ attitudes toward HOAs and the degree of HOAs’ financial dependence

xi
on management firms are the main determinants of Chinese HOA effectiveness in
solving both types of problems.

The findings also show that most HOAs in Beijing operate based on democratic
principles: They have created various governing structures to encourage resident
participation; they have open and shared decision-making processes on important
issues; and most HOA leaders trust their members’ civic efficacy. The findings
suggest that resident civic awareness and participation are more likely to be
improved in organizations with formalized and democratic governing structures,
frequent communication between the committee and residents, and leaders who
strongly believe in resident civic efficacy.

1
CHAPTER 1 INTRODUCTION
This dissertation investigates newly emerging Chinese Homeowner Associations
(HOAs) and the social functions they serve in neighborhood governance in urban
China. The ways that Chinese HOAs function, most resemble private neighborhood
associations that have existed in Western societies for decades. Private
neighborhood associations have attracted widespread research interest for their rapid
growth and their increasing social impacts on neighborhood life and urban
governance. A large body of literature has demonstrated that private neighborhood
organizations are important social forces for improving the quality of public service
delivery, strengthening effective urban policymaking, and promoting participatory
awareness and skills necessary for self-governance (For example, Berry, Portney, &
Thomson, 1993; Chaskin, 2003; Rich, 1980; Yang, 2005). However, this view of the
role of private neighborhood organizations does not represent a consensus. Some
scholars consider these organizations as private governments or shadow governments
that do not operate on democratic principles and diminish the spirit of public
participation (Blakely & Snyder, 1997; Garreau, 1987; Kennedy, 1995 ; Kennedy &
Hann, 2004; McKenzie, 1994).

Moreover, while contextual features of societies are important for studying the
development of neighborhood associations (Fung, 2003), most of the literature
focuses on neighborhood organizations in democratic societies with clearly defined

2
property rights and leaves the context of authoritarian political systems largely
untouched. This study attempts to fill this gap by exploring the roles of HOAs in
neighborhood governance in China—a country with a different economic system,
political culture and civil society compared to Western countries.

In this chapter, I first present a brief review of the literature on the social functions of
private neighborhood associations in the United States. This literature provides
models that facilitate our understanding of the social functions of Chinese HOAs. I
then discuss the development of Chinese HOAs, highlighting the driving forces
behind their emergence and their unique nature. Next, I introduce the specific
research questions I will pursue and the outline of this dissertation. I conclude with a
discussion of the significance of this research in the final section of this chapter.

1.1 The Social Functions of Private Neighborhood Associations in
the United States
Private neighborhood associations refer to “several legal forms for private collective
ownership of housing”—homeowner associations, condominium associations, and
cooperatives (Nelson, 2005: xiv). They also are called residential community
associations, common interest developments, or planning unit developments.

3
Private neighborhood associations have become prevalent neighborhood-level,
residential property organizations in parts of the world. For example, in the United
States, there were fewer than 500 private neighborhood associations in 1962
(McKenzie, 1994); in the 1970s, there were about 10,000 (Conte, 2001); in 1980,
55,000 existed; by 1992, 150,000 private neighborhood associations—about 11
percent of American housing units—represented 30 million people (Dilger, 1992).
In 1998, an estimated 205,000 private neighborhood associations accounted for 14
percent of American housing units (Treese, 1998). And by 2004, nearly 52
million—18 percent of Americans—lived in housing with a private neighborhood
association (Nelson, 2005).

The rapid growth of private neighborhood associations coincides with the increase in
social functions and impacts these organizations have on neighborhood governance.
A large body of literature on the social functions of private neighborhood
associations focuses on two aspects: solving neighborhood issues and promoting
civic engagement. However, no consensus has been reached on either of these two
aspects.

1.1.1 Resolving Neighborhood Issues
As for the function of resolving neighborhood issues—such as public service
delivery, land use and neighborhood security—some consider neighborhood

4
associations as powerful vehicles for addressing these problems (Chaskin, Brown,
Venkatesh, & Vidal, 2001; Ostrom, Bish, & Ostrom, 1988 ). With the growth and
stratification of neighborhood life, local neighborhood problems become more and
more complex, and local governments have more difficulties in responding to and
solving these problems. Private neighborhood organizations are much closer to their
members than local governments. Therefore, they are said to be more sensitive to
neighborhood problems and more capable of responding to those problems than local
governments. In addition, the increase in social functions carried out by private
neighborhood associations actually can relieve local governments from some public
responsibility (Goix, 2005). As a result, local government can focus on low-income
neighborhoods and help them improve their environments (Foldvary, 1995).

In contrast, other researchers are not as optimistic about the increasing importance of
private neighborhood associations in solving neighborhood problems. They have
expressed concerns that as private neighborhood associations take over more and
more social functions, they will become further divided geographically, and the local
public authority will lose economies of scale in meeting various social needs.
Moreover, the shift of social functions from local governments to private
neighborhood associations will diminish the public authority of local governments,
and further reduce their capabilities of solving neighborhood problems and meeting
various social needs (Doherty, 2000; Scott, 1967).

5
1.1.2 Improving Civic Engagement and Neighborhood Democracy
Regarding the role in improving civic engagement and democracy, on the one hand,
many scholars, from a normative perspective, consider private neighborhood
associations as a genuine school of democracy (Rosenblum, 1997). They provide an
opportunity for resident face-to-face interaction (Doherty, 2000), improve
participation skills and foster a sense of community (Berry et al., 1993; Hyatt, 2000),
engage residents in self-governance and empower people in decision-making for
their daily lives (Chaskin, 2003; Rich, 1980; Warren, 2001). This school of thought
is based on Tocqueville’s proposition that participation in private associations
potentially enhances the quality of political life in the larger public sphere. Private
neighborhood associations facilitate the finding of common interests among citizens
and provide the “experience of co-ownership of common rules, rule-making, and
self-government” (Rosenblum, 1997), through which strong democracy can be
institutionalized (Barber, 1984). As such, the development of private neighborhood
associations greatly improves citizen participation and local democracy.

On the other hand, through empirical studies, some scholars consider private
neighborhood associations as private governments that impose unreasonable
regulations on residents and as characterized by undemocratic principles (McKenzie,
1994). These associations represent a disengagement from community and a
thwarting of citizen participation (Barton & Silverman, 1987, 1994; McKenzie,

6
1994; Scavo, 1979). They argue that strict associative regulations on residents and
autocratic operations cannot confer civic virtues to members (Blakely & Snyder,
1997; Kennedy, 1995 ; Kennedy & Hann, 2004). Moreover, the elite and oligarchic
governing structures of these organizations take challenges with issues of
representation and legitimacy (Bolduc, 1980; Sills, Butcher, Collis, & Glen, 1980).
Because of the lack of participatory democracy within them (Alexander, 1989),
private neighborhood associations tend to damage local democracy and civic
participation.

Although no agreement has been reached on the social functions and impacts of
private neighborhood associations on neighborhood life and urban governance, the
literature suggests a framework that facilitates our understanding of the social
functions and impacts of HOAs in urban China. In this dissertation, I focus on two
specific social functions that Chinese HOAs carry out—solving neighborhood
problems and promoting civic participation. In the next section, I will discuss briefly
the development of Chinese HOAs and the research questions this dissertation will
focus on regarding their social functions and impacts on neighborhood life.

1.2 Homeowner Associations in Urban China
Chinese HOAs are citizen-initiated and self-governing neighborhood organizations
that set goals freely and maintain autonomy from governmental agencies. They

7
emerged in the mid-1990s and burgeoned after China’s 1998 housing reform as a
grassroots response to severe infringements upon private property and other related
rights by local governments, developers and property management firms.

Two types of residential neighborhoods exist in urban China. Before 1994, local
governments and state-owned enterprises in the form of work units (danwei) created
“old residential neighborhoods.” After the 1998 housing reform, most of this public
housing was sold to residents at low prices. Homeowners in old residential
neighborhoods own only the building units they bought from their work units. They
have no property rights regarding common spaces, such as stairways, open spaces
around the building and other public areas as they did not pay for them.

A second type of neighborhood is the “newly developed residential neighborhood,”
which includes commercial housing (shangpin fang) and economically affordable
housing (jingji shiyong fang). The free market determines the price for the
commercial housing, while municipal governments normally subsidize the
economically affordable housing. Real estate enterprises began building newly
developed residential neighborhoods after 1994. In addition to apartment buildings,
real estate enterprises have the responsibility of providing neighborhood
infrastructures and common facilities traditionally provided by local governments or
work units in the past. Thus, newly developed neighborhoods lack a traditional

8
administrative presence. To manage these neighborhoods, the Chinese government
has promoted the professional property management model, asking developers to
choose property management firms to manage the neighborhoods prior to the moving
in of homeowners.

Newly developed residential neighborhoods, which are growing quickly, already
outnumber old residential neighborhoods in many cities. For example, in Beijing, of
the 6,000 neighborhoods, about 2,000 are old neighborhoods and nearly 4,000 are
new (Qin, 2007:2). Most HOAs are established in the newly developed residential
neighborhoods (Liu, 2007). HOAs have emerged only recently in old residential
neighborhoods.

1.2.1 The Emergence of Chinese HOAs
In China, commercial housing and real property management first emerged in the
1980s in the coastal cities—the frontiers of Chinese economic reforms. Urban
housing reforms began in 1998. Since then, new residential neighborhoods
burgeoned in many large- and middle-sized cities. To administer the newly
developed residential neighborhoods in urban areas, as early as 1994, the Ministry of
Construction encouraged residential neighborhoods to form Neighborhood
Management Committees (NMCs, guanweihui), the precursors to HOAs. According
to the 1994 Order No. 33 of the Ministry of Construction—“Guidelines for

9
Managing the Newly Developed Neighborhoods in Urban Areas”
1
(hereafter, refer to
as “Order No. 33”)—local housing government offices were required to provide
guidance for developers and residents in establishing NMCs. The complex
composition of an NMC includes representatives from homeowners, renters, the real
estate development enterprise, the property management firm, Residents’ Committee
and the local police station. As “the highest authority of the neighborhood” (Yang,
2002), NMCs had substantial power over neighborhood properties. For example,
NMCs have the power to choose property management firms (Article 7b, Order No.
33), approve the budget of the property management firm and make decisions on
other important issues related to neighborhood governance (Article 7c, Order No.
33). As will be discussed later, under the new rules, the HOA Committees do not
have the powers that their precursors had.

Homeowners normally play only a marginal role in the NMCs. First, in most cases,
developers initiated and controlled NMCs. Without regulations on the property
management market in the late 1990s, developers usually set up their own
management firms to deliver neighborhood services, which normally brought
developers monopoly profits. To ensure that NMCs do not replace their property
management firms and that they gain more profits from undefined common
properties, developers have incentives to initiate and secure control over NMCs.

1
The No. 33 Order is available at http://www.pmabc.com/html/51/n-1051.html (in Chinese)

10
With developers dominating NMCs, homeowners normally have little say on
neighborhood governance. Second, local housing government agencies and other
relevant government agencies constrain the autonomy of NMCs as they closely
oversee and direct them. Even for homeowner-controlled NMCs, homeowners still
had little power to govern their neighborhood. In sum, developers and local
government agencies normally controlled NMCs, and homeowners had little voice in
the NMCs’ decision-making processes. Because homeowner interests more often
conflict than align with developers and government agencies, homeowners felt the
need to establish an independent organization to protect their common interests.

In response to widespread homeowner complaints, the State Council of the People’s
Republic of China promulgated “The Regulations on Real Property Management” in
2003
2
(hereafter, refer to as “2003 Regulation”). Under the 2003 Regulation,
homeowners can organize a formal assembly in their neighborhood if half of the
units are sold or after two years since the first homeowner has moved into the
neighborhood
3
(Article 8, 2003 Regulation). Different from NMCs, homeowners
solely organize HOAs. Representatives from local government agencies and

2
The 2003 Regulation was amended on Aug. 26, 2007, by the State Council of P. R. China and
went into effect on Oct. 1, 2007. The 2003 Regulation is available at
http://news.xinhuanet.com/zhengfu/2003-06/20/content_928608.htm (in Chinese). The amended
ordinance is available at http://www.gov.cn/ziliao/flfg/2007-08/31/content_733267.htm (in Chinese)

3
In this study, neighborhood is defined as one property management area. One property management
area is similar to one gated community or common interest development in the United States.

11
property management firms cannot join HOAs. Furthermore, homeowners can elect
their own HOA Committee through a democratic voting procedure. HOAs then have
become the major grassroots organizations through which homeowners
independently govern neighborhood issues.

1.2.2 Driving Forces behind the Emergence of HOAs in China
In China, which has a society with a strong authoritarian culture, any type of non-
party-led association is treated with caution. In this sense, the emergence of
HOAs—citizen-initiated and self-governing neighborhood organizations—
challenges norms. The development of Chinese HOAs has become one of the most
significant urban changes in China with potentially important social, economic and
political implications. Understanding the growth and future impacts of HOAs
necessitates recognizing the origin of HOAs and what made them possible in a
society like China. Four major driving forces stand behind this social phenomenon.

First, China’s 1998 urban housing reform changed the governance structure for
urban residential neighborhoods and provided space for the growth of Chinese
HOAs. Before the reform, Chinese governments and state-owned enterprises, in the
form of work units, governed the lives of urban residents and managed everything
from education to family planning. As one responsibility, work units had to provide
public housing to their employees, and also maintain and manage the housing.

12
Lasting for nearly half a century, this form of housing provision was dominant since
the establishment of the People’s Republic of China in 1949. In 1998, the Chinese
government initiated urban housing reform. One primary goal of this reform was to
offload the responsibilities of housing provision and management to society. The
housing units—once allocated to urban residents through work units at no cost—are
now assessed and sold, in most cases, to the current occupants. Many people still
live in the same house. But the change has been fundamental—for the first time
since 1949, urban residents actually own their dwellings. Vibrant commercial
housing and mortgage markets accompanied the privatization of public housing.
Commercial housing units are built and sold on the free market (Chen, 1996; Ding &
Song, 2005; Wang & Murie, 1999).

This reform quickly swept through the urban areas of China. Homeownership
expanded dramatically. In 1990, the homeownership rate was only 8 percent among
all residents in China. After housing reform, the homeownership rate was 54, 65, 74
and 82 percent respectively in 1999, 2001, 2003 and 2006 (see Figure 1.1).

13
Figure 1.1 Homeownership in China, 1990-2006
Homeownership in Urban China
0%
20%
40%
60%
80%
100%
1990 1999 2001 2003 2006
Year

(Sources: Sohu Online News)

Today, most urban residents either purchase or rent commercial houses. The market
also has taken over related housing and property management services. According to
the Ministry of Construction, individual residents accounted for more than 90
percent of home purchases in 2000, replacing state-owned enterprises as the main
buyers (Economist, 8 May 2001 ). The implications of this transfer of
homeownership from governments and state-owned enterprises to individual urban
residents cannot be overestimated. Government agencies lose their legitimacy in
intervening at the micro-level of social life in urban residential neighborhoods. The
flip side of the coin is that homeowners must rely on individual or collective action
to resolve neighborhood issues. More and more residents recognized that

14
improvements to community life depended on themselves, and organizing
neighborhood associations served as one of the most effective approaches.

Second, private property rights gradually have been recognized, which propelled the
formation of HOAs. Although a basic right common in democratic societies, private
property rights have not been accepted in China until the early 1990s. In 2004, the
Fourth Amendment to the Chinese Constitution states that “citizens’ lawful private
property is inviolable” (Article 21, Fourth Amendments). Concurrent with the wide
recognition of private property rights, local governments, developers and
management firms increasingly have infringed upon homeowners’ property rights.
Although the principle that “private property is inviolable” is socially accepted and
legally written in the Constitution, laws and legal rules

that operationalize this
principle and protect private property remain missing
4
(Li, 2005). Driven by
economic interests, developers, property management firms and local governments
often infringe upon homeowners’ property rights, particularly the common assets in
newly developed residential neighborhoods. As developers and property
management firms typically wield strong economic power and have political
connections with governments, homeowners often find themselves in a

4
Property Right Law of the P.R. China was just promulgated in March 2007 and came into effect on Oct. 1,
2007. This law was the first piece of legislation in China to cover an individual's right to own private assets.
This new law is helpful in regulating the real estate market in the long run (Zou, 2007), but the degree to which it
effectively deals with property right-related disputes is unclear (Chen, 2006). The law is available at
http://www.gov.cn/ziliao/flfg/2007-03/19/content_554452.htm (in Chinese).

15
disadvantaged position when conflicts arise with developers and property
management firms. Homeowners increasingly have realized that protecting property
rights necessitates collective action through well-organized homeowners
associations.

Third, the retreat of the state from society has created space for the growth of HOAs.
The decentralization of administrative power and the shift of social responsibilities
from state-run institutions to local communities have intensified in China since the
1990s (Derleth & Koldyk, 2004). Responsibility for social services—such as
cultural and social activities, public lighting, green space maintenance and waste
management—was delegated to communities via top-down governmental incentives
and policies (Leung & Wong, 1999). As a result, neighborhood organizations have
assumed more responsibility for delivering services to urban residents and play more
important roles in community development. The retreat of the state from society is
based on the recognition that governments cannot provide the diverse services
demanded by urban residents (Weisbrod, 1977; Xu, 2007), and the trend likely will
intensify in future years. Recognizing this, homeowners have incentives to develop
effective community organizations to create better living environments.

Fourth, social norms have changed with domestic social-economic reforms and
globalization. In pre-reform China, especially during the Cultural Revolution,

16
society did not accept taboo terms—such as “self-interest,” “privateness” and
“individualism”—that were unmentionable in the public domain. After social-
economic reform, the pursuit of self-interest and a sense of private neighborhoods
have become widely accepted. For example, commercial advertisements advocate
individualism, personal choice and privateness (Johansson, 1999). Moreover, the
processes of globalization gradually have planted norms—such as civic rights, social
justice and citizen participation—in people’s hearts. These norms have become a
cultural support for residents in organizing HOAs, protecting common interests,
resolving common issues and self-governing neighborhood affairs.

1.2.3 Unique Nature of Chinese HOAs
Driven by the aforementioned social forces, HOAs emerged as a new form of
community organization, although three other types of non-governmental and non-
profit community organizations exist in urban China: social organizations (shehui
tuanti), Residents’ Committees (jumin weiyuanhui) and community-run non-profit
entities (minban feiqiye). These three types of community organizations have a
longer history than HOAs. Compared with the other types of community
organizations, the distinctive nature and function of Chinese HOAs determines their
unique role in urban governance in China’s future. This section aims to gain a better
understanding of the unique nature of HOAs by comparing them with other types of
community organizations in China and their counterparts in Western countries.

17

1.2.3.1 Difference from Other Types of Chinese Community-level
Organizations
Social organizations refer to membership-based, voluntary and non-profit
associations organized by citizens according to the “Provisional Regulations for
Registration of Social Organizations” issued in 1989. Under this regulation,
government institutions in a relevant domain must serve as the “sponsor
organization” for social organizations. The sponsor organization takes responsibility
for the social organizations’ activities. Local social organizations need a minimum
operating fund of RMB 30,000 ($1=RMB 7.4) to register with the District Bureau of
Civil Affairs. Moreover, only one organization of each type can register at each
administrative level (Ho, 2001). Most social organizations at the community level
focus on environmental or health (such as HIV) issues. Social organizations should
receive annual inspections and oversight from government agencies. Local
governments dismiss social organizations they consider as political dissidents (Ma,
2002; Saich, 2000). Therefore, social organizations need to work with governments
and hardly can change government practices (Tang and Zhan, 2005; Ru, 2003).

In 2000, Residents’ Committees were renamed as Community Residents’
Committees (shequ juweihui, hereafter, refer to as “RCs”). The Chinese government
set up RCs in the early 1950s. RCs primarily facilitate government administrative

18
tasks at the neighborhood level and manage residents who do not belong to work
units. During the 1980s, RCs were reformed with the goal of becoming more
responsive to residents. According to the “Urban Residents’ Committee
Organizational Law” issued by the State Council in 1989, RCs are a kind of “mass
organization for self governance through which residents manage their own affairs,
educate themselves and serve their own needs” (Article 1, 2, The Residents’
Committee Organizational Law). The mission of RCs is to “enable urban residents
to administer their own affairs and promote a socialistic democracy in cities.”
However, in practice, RCs serve more as an administrative branch rather than a self-
governing organization as legally described. RCs have assumed many administrative
tasks traditionally managed by Street Offices (jiedao banshichu), the bottom level of
urban government. RCs responsibilities include publicizing the constitution, laws
and government policies; mediating civil disputes; helping maintain social order and
security; assisting local governments in implementing policies of public sanitation,
birth control, social welfare and youth education; and providing community services
to residents (Read, 2000: 808). As governments initiate RCs top down, municipal
governments maintain the responsibility for providing them with financial support,
materials (office, supplies, etc.) and salaries as well as “ operational guidance”
(Article 17, The Residents’ Committee Organizational Law). Moreover, the Street
Office traditionally appoints the directors of RCs. As a result, most residents view

19
RCs as part of or an extension of urban government, although RCs remain outside of
the hierarchical administrative system.

Community-run, non-profit entities are non-governmental social service providers at
the community level governed by the 1998 “Provisional Regulations for the
Registration and Management of Community-Run Nonprofit Entities.” Under this
regulation, they must register with the Bureau of Civil Affairs. As the regulation
makes it difficult for them to register, most community-run, non-profit entities
register with the Bureau of Industry and Commerce Administration as business
organizations, and thus they cannot benefit from tax exemptions (Wang, 2001). This
results from the Chinese government’s cautious attitude toward non-governmental
organizations, and therefore the restrictive regulations make the development
environment of grassroots organizations, at least financially, more difficult.

Table 1.1 demonstrates the difference between HOAs and the other three types of
community organizations in urban China.

20

Table 1.1 Comparison of Non-Governmental/Non-Profit Organizations at the Community Level in Urban China

HOAs Social organizations Residents’
committees
Community-run,
non-profit entities
Boundary One in each property
management area
One at each
administrative level
One in each
community
/
Initiated by Residents Government/Individuals Government Individual
entrepreneurs
Organizational
nature
Non-governmental,
self-governing
De facto
governmental/non-
governmental
De facto
governmental
Non-governmental
Registration Register with local
housing administrative
department and Street
Office
Register with Bureau of
Civil Affairs
Register with
Street Office
Register with Bureau
of Civil Affairs/
Bureau of Industry
and Commerce
Administration
Leadership
selection
Direct election Appointment Appointment/
indirect selection
/
Financial
resources
Common income/
fixed percent of
management fees/
individual donation
Fund-
raising/membership fees
Local governments Service fees
Institutional
innovation
Having motivation to
conduct institutional
innovation
Difficult to change/
innovate institutions
No motivation to
change/ innovate
institutions
/

21
The key differences between HOAs and other community organizations include:

z Because HOAs are established at the level of property management areas, the
number of Chinese HOAs and thus the scale of their potential impacts may be
much larger than other types of organizations. Chinese HOAs have increased
rapidly since China’s 1998 urban housing reform. For example, Beijing only
had 126 Neighborhood Management Committees—the precursors to the
HOAs—in 1999 (Tan, 2000); as of 2005, 331 or 15 percent of Beijing
residential neighborhoods formed HOAs and elected HOA Committees (yezhu
weiyuanhui)
5
(Beijing Municipal Construction Committee, 2006). Chinese
HOAs have the potential to be the top neighborhood-level organization in terms
of numbers in urban China. At the community level, the number of social
organization members is small as only one social organization of each kind can
be established in one administrative area. The number of community-run, non-
profit entities also is few compared to HOAs because of the restrictive
registration requirements imposed on them and the difficulties of surviving in
face of competition with state-owned or government-supported service delivery
organizations. Compared with RCs, the number of Chinese HOAs is smaller
currently. However, HOAs might outnumber RCs in the future because HOAs
usually have smaller boundaries compared with RCs. Local-level governments

5
A Chinese HOA committee is similar to the board of directors of HOAs in Western countries.

22
initiate and set up RCs at the community level. Only one RC can be established
in each community. In comparison, HOAs can be established in each
neighborhood (i.e. property management area), which has a smaller boundary
than a community. Sometimes, one RC and one HOA function in large
neighborhoods. But in most cases, several HOAs exist in a community where
only one RC exists. Therefore, given more time, if all residential neighborhoods
establish HOAs, the number of HOAs will be much larger than the number of
RCs. In this sense, Chinese HOAs have the potential to play a larger role in
community governance than other types of community organizations.

z Neighborhood residents initiate HOAs, which are motivated to challenge and
transform government practice, while other types of community organizations
are not. Chinese HOAs are established as a grassroots response to the severe
infringement upon property rights by developers, property management firms
and local governments. To protect property rights in a country without laws to
define private property rights, HOAs take action to advance the clarification of
property rights and change government practice. Chinese HOAs take a variety
of political and legal actions to achieve their goals, such as engaging in
demonstrations against the government and developers, initiating petitions,
advocating for legislation, supporting candidates to run for Local People’s
Congress and RCs in competition with Communist Party-nominated candidates,

23
building networks among their leaders, and litigating against government,
developers and property management firms. In contrast, other types of
community organizations are either government initiated or social service
delivery oriented with no incentive to initiate institutional transformation or
challenge government practice. Therefore, Chinese HOAs are considered the
“truly meaningful nongovernmental organizations at the community level” with
the dynamism and potential to achieve democratic governance (Chen, Shu, &
Wang, 2004).

z Chinese HOAs have substantially more financial resources than other types of
community organizations. Chinese HOAs own real property (jointly owned
parts in the neighborhood) and movable property (profits from jointly owned
parts). They do not need to cooperate with government agencies nor
compromise their goals for receiving financial support. Therefore, HOAs have
financial resources to survive and achieve their mission of protecting residents’
common interests.

z Chinese HOAs are real self-governing organizations. They provide a
meaningful opportunity for grassroots citizen participation. Chinese HOAs are
the only form of community organization in which rather than by appointment,
members elect leaders directly. Moreover, as they self-govern neighborhood

24
affairs, Chinese HOAs have organizational rules that ensure member
participation in decision-making regarding important issues of common concern.
Individual votes do matter in final decisions on common issues. Therefore,
Chinese HOAs provide the only channel for residents to practice self-
governance and make decisions for their daily lives.

In sum, Chinese HOAs differ from other types of community organizations in their
nature and functions, especially in the role of mobilizing community participation.
RCs have legitimate and substantial power to mobilize resident participation in
community activities, but their lack of requisite autonomy from government prevents
them from being a social force with the potential of promoting the development of
civil society (Xu, 2007). Other types of community associations might have some
degree of autonomy from government, but they lack the power and resources to
organize and mobilize residents. Chinese HOAs are the only form of neighborhood
association that can maintain autonomy from government. They also have
substantial incentives and resources to mobilize residents to take collective action for
protecting their property and political rights. The underlying difference rests upon
the common interest of Chinese HOAs in protecting private property rights—a
motivation other organizations do not have. Driven by the desire to uphold private
property rights, Chinese HOAs have taken various actions to change government
practice and facilitate the healthy development of the market economy with some

25
degree of success. They are thus seen as an important social force in urban
governance and “the pioneer of Chinese Civil Society” (Chen, 2006:2).

1.2.3.2 Difference from Western HOAs
Chinese HOAs also differ from their counterparts in Western countries in several
ways.

First, Chinese HOAs cannot exercise power in managing common property within
their residential neighborhoods. This is largely due to the lack of laws that define
private property, particularly common assets in newly developed residential
neighborhoods. As mentioned earlier, unlike Western countries where property
rights are well established, the principle that “citizens’ lawful private property is
inviolable” is not operationalized in China. Although their authority for managing
their own properties is recognized, most homeowner associations cannot exercise
their power without adequate legal protection. Therefore, the infringement of
homeowners’ common properties by developers and management firms is becoming
an increasing concern primarily with the rapid growth of newly developed
neighborhoods composed of privately owned housing units. For example,
developers have sold neighborhood parking lots to others so that neighborhood
residents had no parking spaces. Property management firms also have occupied
common areas for commercial activities. In addition, homeowners have found that

26
their political rights usually are constrained in ways that impair their ability to
protect their property rights (Chen, 2006). As a result, Chinese HOAs practically
have limited power in managing their common property.

Second, Chinese HOAs cannot exercise regulatory power over members. As will be
discussed later, governmental regulations do not stipulate enforceable rules regarding
the regulatory power of HOAs and HOA constitutions/bylaws. Thus, Chinese HOAs
cannot penalize members for violations, which differs from HOAs in Western
countries. Western HOAs—sometimes called “private governments” (McKenzie,
1994) or “shadow governments” (Garreau, 1987)—have coercive power similar to
local government to enforce rules.

Third, homeowners create Chinese HOAs, which obtain their legitimacy and define
their authority through a bottom-up, democratic process. In contrast, real estate
developers create Western HOAs, and laws clearly define the scope of their authority
(Dilger, 1992; Langbein & Sportswood-Bright, 2004). As Chinese laws and
government rules only describe HOA roles and responsibilities in general language,
the authority of HOAs remain unclear. In practice, the ambiguity of HOAs’
authority leaves space for HOAs themselves to define the scope of their authority.
HOA Committees must obtain power through a bottom-up, democratic process. As a
result, an individual homeowner’s role is more important in Chinese HOAs than

27
Western HOAs. To receive power and support from members, Chinese HOAs have
incentives to mobilize member participation, whereas Western HOAs have no such
incentives.

1.3 Research Questions
In the beginning, the need to protect common property rights severely infringed upon
by local governments, developers and property management firms drove the
emergence of Chinese HOAs. As they grew, Chinese HOAs have demonstrated the
potential to take on more and more social functions and exert much broader social
impacts. They do not limit their collective action to protecting property rights. They
address different types of neighborhood problems, such as neighborhood service
delivery and neighbor relationships. Moreover, because governments play
influential roles in solving local problems, Chinese HOA activities are not limited to
the local community, although local needs drove their emergence. To protect
common interests, HOAs take a variety of actions, such as organizing public
demonstrations, initiating petitions, suing developers for breach of contract, and
supporting their members to run for Resident Committees and local People’s
Congress. These activities have exerted a broader social impact beyond the
neighborhood. Chinese HOAs have been considered an emerging urban social force
with the dynamism and potential to provide meaningful opportunities for grassroots

28
citizen participation and the achievement of democratic neighborhoods (Chen et al.,
2004).

It is widely agreed that HOAs will play a more significant role in addressing the
local community’s common needs, solving local problems, promoting grassroots
citizen participation and democratizing urban governance in China (Chen, 2006;
Chen et al., 2004; Read, 2003; Read, Forthcoming 2007; Xia, 2003; Xu & Liu,
2005). However, very few studies have investigated empirically why HOAs can
perform such functions and their real impacts on neighborhoods. In addition, the
development of HOAs in urban China is uneven. Some HOAs have taken various
legal, political and social actions to deal with neighborhood problems and participate
in local public affairs, and have demonstrated high level of effectiveness. However,
many others have not been active at all or have demonstrated little effectiveness in
their action. Some HOAs have institutionalized democratic governance structures,
while others have not formalized their internal governance life.

Therefore, this dissertation aims to answer the following three questions:

1. Under what institutional environment do Chinese HOAs operate and carry out
their social functions, and how do institutional arrangements facilitate or impede
their performance?

29
2. What neighborhood and organizational factors influence the effectiveness of
HOAs in solving different types of neighborhood issues?
3. What are the characteristics of internal governance within Chinese HOAs? And
how do Chinese HOAs impact resident participation and civic awareness?

1.4 Significance of the Research
This research is significant for several reasons. First, as discussed earlier, debates
over the social functions of private neighborhood associations upon neighborhood
life and urban governance remain unsolved, and more research is needed. Moreover,
most studies are normative investigations, and empirical studies of private
neighborhood associations are sparse (Barton & Silverman, 1994: xii). Although
conducted in a society with a different institutional environment than the United
States, this dissertation provides a thorough empirical investigation of the social
functions and impacts of private neighborhood associations in neighborhood life and
urban governance, and therefore potentially could shed light on the questions
currently in debate.

Second, the existing literature focuses on consolidated democratic societies and
leaves authoritarian and socialist systems largely untouched. This research on
private neighborhood associations takes on important political and policy
significance in a country where the political authority has attempted to eliminate all

30
non-party-led associations or at least has shown little hospitality toward voluntary
neighborhood organizations (Gold, 1998). This dissertation fills the gap by
investigating the development of HOAs in China, a country with a different
economic system, political culture, institutions and civil society from Western
societies. It will explore empirically whether and to what extent private
neighborhood associations in an authoritarian society can represent their members’
interests in solving neighborhood problems and affect neighborhood governance.
Studies of this kind are important because the development of neighborhood
associations depends crucially on contextual features of societies, particularly the
political contexts (Fung, 2003).

Third, as will become clear later, although focused on Chinese HOAs, the analyses
are built on the theories developed in the Western world. Therefore, this study will
test the utility of these theories in understanding the development of private
neighborhood associations in a different institutional context. Again, such a
comparative perspective is significant because the contextual features of a society are
important factors in studying the development of neighborhood associations (Fung,
2003).

Finally, the findings will shed light on the future development of political and
economic rights in China. Clearly, the current situation is not stable as Chinese

31
government has encouraged homeownership while failing to provide clear property
rights. This reflects many problems in contemporary China, a society in transition
from a planned to market economy and from authoritarian to democratic governance.
This study on the social functions of HOAs in neighborhood life and democratic
governance not only provides new information on the development of HOAs in
urban China but also contributes to understanding the potential trajectory of the
development of political and economic rights in China.

1.5 Structure of this Dissertation
This dissertation is organized into six chapters. This chapter serves as an
introduction. It reviews the debate on the social functions played by HOAs in the
United States, provides general information about Chinese HOAs, introduces three
research questions, discusses the significance of this study and outlines the structure
of the dissertation.

Chapter 2 discusses the data collection and research methods in this dissertation. It
documents the variety of data collection strategies, including surveys, interviews,
participant observation and archival research, and follows with a discussion of both
quantitative and qualitative research methods employed in this research.

32
Chapter 3 analyzes the institutional environment under which Chinese HOAs operate
and develop. This investigation is important as the external institutional
environment largely shape and constrain the social functions of Chinese HOAs and
their potential social impacts. It follows with a discussion of how regulations impact
how Chinese HOAs function and their performance using the survey data as
supporting evidence.

Chapter 4 focuses on the role Chinese HOAs have played in solving neighborhood
problems. The central question involves what factors account for the effectiveness
of Chinese HOAs in resolving the two most prominent types of neighborhood
issues—issues involving developers and property management firms. It reviews
different types of neighborhood issues urban residents usually face. It then develops
a theoretical framework that incorporates urban sociology, resource dependency and
leadership theories to analyze determinants of problem-solving effectiveness and
proposes a series of research hypotheses. It follows with a discussion of research
methods and measurement, and empirical findings at the end.

Chapter 5 focuses on the impacts Chinese HOAs have on civic participation. The
central questions surround the extent to which the internal political life of HOAs is
characterized by democratic governance and how HOA internal governance impacts
resident civic awareness and participation. It reviews two streams of literature

33
related to this study—namely, the impact of community associations on local
democracy and the internal governance of community associations. After the
literature review, the chapter proposes several research hypotheses followed by the
research methodology and research findings.

Chapter 6 concludes the dissertation by summarizing the major empirical findings,
discussing their implications and limitations, and identifying potentially fruitful areas
of further research.

34
CHAPTER 2 RESEARCH METHODS
The purpose of this dissertation is to address three major research questions
regarding how Chinese HOAs carry out their social functions and play a role in
neighborhood governance. This research employs a variety of data collection
strategies to gather quantitative and qualitative data about Chinese HOA contextual
neighborhood characteristics, relationships with other neighborhood institutions and
governments, organizational characteristics, internal governance, the problems
neighborhood faced, the actions taken to address problems and results, and the
interviewee’s evaluation of HOA impacts on neighborhood life and urban
governance and so on. These data collection methods include surveys, interviews,
participant observation and archival research.

Chinese HOAs of interest were chosen from Beijing City mainly because Beijing is
the place in which my professional and academic contacts enabled me to implement
the overall research design. To the best of my knowledge, survey data on the
operation of HOAs in urban China is not publicly available. The main difficulty in
conducting HOA surveys is the availability of contact information to access HOA
leaders and general members. Without publicized contact lists of HOA leaders, the
success of surveys largely depends on collaboration with scholars in China who have
access to HOA leaders. During my fieldwork in Beijing, I received support from
Professor Youhong Chen at Renmin University of China. She is the leading scholar

35
in Chinese HOAs and neighborhood governance and has conducted more than 50
case studies on Chinese HOAs in the past four years. Professor Chen also leads a
research institute in Beijing—the Community and Governance Institute (GOCO).
GOCO has provided free training to HOA leaders and has held many conferences
and workshops aimed at improving HOA operations. Therefore, GOCO has a very
good reputation among Beijing HOA members. In my data collection process,
Professor Chen not only provided me with valuable advice on developing the survey
instruments but also provided access to homeowner leaders. She also invited me to
be a research fellow at GOCO. As they trusted me as a GOCO researcher, HOA
leaders accepted my interview requests and shared with me the contact information
of other HOA leaders. Without this channel, completing this research would not
have been possible.

The second reason is that Beijing is representative of cities in China where HOAs
have developed diverse internal governance structures, and demonstrated different
levels of effectiveness in political participation and addressing neighborhood
problems. My interviews with two scholars studying Chinese HOAs and three HOA
leaders from other cities—Qingdao, Shenzhen and Nanjing—show that HOA
development in other cities (including organization, operations, agendas and
activities) resembles HOA development in Beijing. There are only minor variations.
Moreover, the broad institutional environment across cities is similar. Only eight

36
cities—including Shenzhen, Zhuhai, Shanghai, Nibo, Qingdao and Xiamen—passed
local laws on property management by 2002 (Li, 2002). Other cities merely
implemented the central government’s 2003 Regulation. Beijing is one of these
cities that adopted the 2003 Regulation and has no specific, local HOA regulations.
While specific, local rules regarding HOAs vary somewhat across cities—for
example, the titles of the rules differ (Hu, 2006)—the general institutional
arrangements related to HOAs in Beijing are consistent with the institutional
arrangements in other cities.

Focusing on HOAs in one city has limited the generalizability of this research.
Multi-city studies could provide a broader picture of the development of Chinese
HOAs and a better understanding of how they carry out their functions. These
limitations could be addressed through future studies that examine HOAs in other
cities in China.

2.1 Interview Surveys of HOA Leaders and Staff
The main data collection instruments for this study were interview surveys.
Association leaders—directors, vice directors, members of homeowner committees
and director’s assistants or secretaries who played a pivotal role in organizational
development and operations—were chosen as interviewees. In most cases, I tried to
contact HOA Committee directors. If they were not available after several contact

37
attempts, I turned to vice directors, core committee members or others very familiar
with the organization. In some cases, I conducted several, separate interviews for
one organization with the director, director’s assistant and committee members.
Therefore, the total number of interviewees for 92 organizations is 126 (see Table
2.1).

Table 2.1 Types of Interviewees
Leaders Number Percentage
HOA Committee Director 77 61
Committee Vice Director 17 14
Committee Member 19 15
Director Assistant/ Secretary 13 10
Total 126 100

The strength of surveying organizational leaders is that it provides a generalized
dataset on the characteristics and practices of HOAs. Previous work (such as
Galaskiewicz, 1979; Hunter & Staggenborg, 1986; Knoke, 1988; Rabrenovic, 1996)
supports this methodology of interviewing high-ranking officers to gain information
concerning neighborhood organizations. In any association, an active minority and
inactive majority exists among members (Barber, 1965; Rabrenovic, 1996; Wood,

38
1981). The Chinese HOA leaders usually are the founders of the organization and
most familiar with the history and development of their own associations. They are
also the ones who establish organizational norms and structures. Thus, they are an
important source of information on the neighborhood, HOA organization and
operations, and organizational relations with outside forces. But dependence on
leaders for information somewhat limits the evaluation of HOA social functions as
leaders might describe their organizations in a positive light. Therefore, this
dissertation also includes numerous interviews with association residents (as will be
discussed later). Given information and resource constraints, this dissertation does
not survey every committee member or a large sample of association residents in
each HOA. Further research should include a large-scale survey of association
residents to better understand HOA social functions.

2.1.1 Development of Survey Instruments
Surveys were conducted through face-to-face interviews using structured
questionnaires. The survey instruments were developed in three stages.

In the first stage, I reviewed related documents and conducted background
interviews with HOA leaders, community activists, scholars with expertise in
neighborhood development and governmental officials to develop draft survey
instruments. Two types of documents were analyzed at this stage, including: 1)

39
related legal rules and administrative guidelines; and 2) journal articles and
newspapers on HOAs, HOA online forums and so on.

In the meantime, background interviews with key informants were conducted to
provide more qualitative information on the development of HOAs in Beijing. I
prepared a set of questions, which were modified and updated as the interviews
progressed. I interviewed 20 people by phone, including 10 HOA leaders and active
members, five community activists, three scholars and two local governmental
officials. These interviews lasted from 15 minutes to four hours. I also exchanged
information with some informants via email. The information from background
interviews was used to modify the survey questionnaires, which had been designed
in draft form based on the literature.

In the second stage, pilot tests of the survey questionnaires were conducted from
April to June 2006. During these three months, I conducted face-to-face interviews
with 17 HOA leaders of 12 registered HOAs and five municipal and district
governmental officials. These HOAs were chosen from a list of 92 HOAs randomly
selected from all registered HOAs in residential neighborhoods in Beijing by 2005
(see section 2.1.3 for more elaboration).

40
In the third stage, formal surveys were conducted from September 2006 to February
2007. During these six months, 80 interviews with members of registered HOAs in
Beijing were completed. Most surveys (92.5 percent of responses) were conducted
through face-to-face interviews using the survey instruments. Six interviews were
carried out through telephone or mail correspondence as some association leaders
preferred.

The face-to-face method is an effective approach for gathering data when the
instrument is lengthy
6
(Patton, 1990). It allows more complex questions to be asked
and enables researchers to observe and listen, and to solicit more information that
respondents will not provide otherwise (Seidman, 1991). More importantly, in the
pilot test stage, I realized that most HOA directors preferred face-to-face interviews
rather than filling out questionnaires as they considered the conversation a chance to
communicate with researchers. In the interviews, I allowed the order of questions to
change when the respondent actively talked about certain issues that would be asked
in later sections. But I largely conducted the interviews according to the structure of
the survey instrument. With the respondents’ permission, 35 interviews were
recorded. As the 119 interview questions covered almost all aspects of association
life—such as the association’s history, process for addressing neighborhood issues

6
As there are no publicly available census data on neighborhood characteristics and HOAs, my
survey instruments comprised of 119 open-ended and forced-choice questions.

41
and relationship with other organizations—each interview took three hours on
average.

2.1.2 Survey Instruments Description
There are two survey questionnaires—a Survey on Homeowner Associations’
Governance Ability and a Survey on HOA Leaders’ Opinions.

The Survey on Homeowner Associations’ Governance Ability comprises 83 open-
ended and forced-choice questions. The survey includes five sections, including
neighborhood characteristics, HOA characteristics (such as governance structure,
operational rules, meetings, available resources, organization activities and relations
with other institutions), information about property management firms,
neighborhood common assets and facilities, and HOA strategies and activities in
dealing with neighborhood issues. The interviewees included HOA directors, vice
directors, committee members or secretaries familiar with the association practices.
The interview formats include one-on-one and group interviews. Most interviews
were conducted one-on-one. Some HOA directors preferred to involve the vice
director and other committee members in the interviews; in these cases, small group
interviews were conducted.

42
The Survey on HOA Leaders’ Opinions includes 35 open-ended and forced-choice
questions. It comprises three sections: history of the HOA; personal opinions about
organizational effectiveness, resident participation and civic efficacy, HOA social
impacts and governmental practice; and respondents’ personal characteristics, such
as gender, age, occupation, income and motivations for participating in the
association. The interviewees were HOA directors or vice directors who play a vital
role in organizational development.

2.1.3 Sample Description
The sample was selected randomly and supplemented with snowball sampling. I
randomly selected 92 HOAs from a list of HOAs registered with district
governments in Beijing by 2005, which the Beijing Municipal Construction
Committee released on its official Web site. Beginning with the first HOA on the
list, I selected every third HOA among the 331 listed HOAs, which resulted in 110
HOAs. However, the list only provided the HOA name, registration date and names
of the HOA committee directors. Because of the lack of contact information,
approaching the selected HOA leaders was extremely difficult. When the selected
HOA leaders could not be reached, other HOAs were chosen as replacements.
7

7
Chinese scholars, community activists, interviewees and Web sources provided the contact
information of the selected HOA leaders. When contact information was not available from these
sources, I could not access the selected HOA leaders because I could not enter the gated neighborhood
(almost all the newly developed residential neighborhoods in Beijing are gated communities) to find
the leaders. In this case, I used a replacement. A replacement also was used when the selected HOA

43
Chinese scholars with expertise on HOAs, community activists and interviewees
suggested the replacements. The replacement was selected carefully to be as similar
as possible to the replaced HOA in terms of geographic location, neighborhood SES,
size and building types. When an appropriate replacement could not be identified,
the HOA was excluded from the sample. This procedure resulted with 92 HOAs.

The sample comprises a variety of HOAs in terms of location, size, age and
socioeconomic status (SES). The HOAs in the sample are located in both urban and
suburban areas in Beijing. The largest HOA has 3,728 households, the smallest
HOA has 40 households, and the average size is 984. The oldest association
registered with the local government 66 months ago, while the youngest association
registered only a month before the interview was conducted. HOAs had been
registered for an average of 19 months. The sample consists of 33 percent high-, 34
percent middle- and 33 percent low-SES neighborhoods (see Table 2.2 on next
page).

leader declined to be interviewed. In the final sample of 92 HOAs, 25 of them are replacements.
Therefore, this study included some HOAs established after 2005. I do not think this significantly
biases my research because the replacement was selected carefully to be as similar as possible to the
replaced HOA in terms of geographic location, neighborhood SES, size and building types (according
to the scholars, community activists and interviewees who helped identify replacements).

44

Table 2.2 Descriptive Statistics for Sample HOAs

Variable Name

Mean

Median Min. Max. SD

HOA size (unit: household) 984 810 40 3728 701
HOA age (unit: months since registration) 19 20 1 66 11
Neighborhood SES- low (dummy, 1=yes) .33 0 0 1 .47
Neighborhood SES- middle (dummy, 1=yes) .34
0 0 1
.48
Neighborhood SES- upper (dummy, 1=yes) .33 0 0 1 .47

( N=92)

45
2.2 Interviews with HOA General Members
The purpose of interviews with association members is to supplement the leadership
survey to obtain a more objective assessment of HOA social functions. Questions
were designed to evaluate HOA internal governance, the relationship between
association leaders and residents, residents’ participatory experiences, and the impact
of associations on individual attitudes and behavior. Sample questions include:
• “Do you feel well informed about your association affairs? Why or why
not?”
• “Could you describe the relationship between your association committee
and the residents?”
• “What is your opinion on current committee director and other
members?”
• “How has your concern about neighborhood issues been changed since
the formation of your association?”

Thirty general members selected from four HOAs were interviewed. As I could not
access the contact list of HOA members, residents who were outside for their
morning exercise or who were leaving or returning from work were approached
casually. In two neighborhoods, I interviewed general members directly without
permission from HOA Committees or property management firms. In one
neighborhood, one security guard followed me during the entire interview process,

46
although I received permission to interview general members from the HOA
Committee. In another neighborhood, security guards stopped my interviews even
though I received the HOA Committee’s permission.

The interviews follow a semi-structured survey format with seven open-ended
questions (see Appendix 3). Some residents wanted to share their experiences in
their associations with the researcher. In those cases, the interviews lasted about half
an hour. However, some residents did not want to participate or had no information
to share, and the interview only lasted for five to 10 minutes. On average, each
interview with general members took 15 minutes.

2.3 Participant Observation
Survey data were supplemented with information gathered through participant
observation. I attended HOA Committee meetings to observe decision-making
processes and interactions between Committee members and association residents. I
also attended other public meetings, workshops and conferences where HOA issues
were discussed. I considered my role as an observer rather than a participant. When
attending meetings, I took notes and observed the interactions among participants
without expressing personal viewpoints.

47
2.4 Archival Research
The last data collection method is archival research. Various documents related to
HOAs were reviewed and analyzed. I collected three types of documents. The first
type is central governmental regulations and a series of rules published by the
Beijing municipal construction department and district governments. The second
type is HOA internal documents, such as operation rules, newsletters, notices and
meeting minutes. The newsletters and notices are the main ways through which
HOA Committees inform and mobilize their members. They also represent the
communication styles between HOA Committees and association residents. But due
to resource constraints, few HOAs in my sample produce monthly or quarterly
newsletters. The third type of documents I reviewed included newspaper articles,
homeowner activists’ blogs and HOA online forums.

Overall, data for this study were obtained by various strategies during several stages
of fieldwork in Beijing, China, which included 1) one three-month trip from April to
June 2006 to pilot test the survey instruments; 2) one six-month trip to conduct
interviews with 80 registered HOAs from September 2006 to February 2007; and 3)
a one-month trip during June and July 2007 to collect additional information about
the HOAs under study and their new actions.

48
2.5 Research Methodology
The research is primarily quantitative, but I also use qualitative methods, such as in-
depth interviews and archival research to complement the quantitative data.

For the first question—under what institutional environment do Chinese HOAs
operate and carry out their social functions, and how do institutional arrangements
facilitate or impede their performance—I mainly use document analysis,
complemented with survey data to examine the institutional environment in which
HOAs develop and to analyze what institutional aspects most crucially hinder HOAs
in carrying out their social functions. The various factors include the lack of
property laws, the presence of regulations preventing HOAs from registering as legal
entities, the ambiguity of executive orders and the related enforcement rules.

For the second research question of what neighborhood and organizational factors
influence the effectiveness of HOAs in solving different types of neighborhood
issues, I developed a measurement of HOA effectiveness in improving neighborhood
services and in protecting property rights, and specified a list of variables that
explain variations in HOA effectiveness. The information on neighborhood
problems, actions HOAs have taken to address those problems and the results of
their actions were examined to construct a measure for HOA effectiveness (it will be
discussed in section 4.3.1.1). Multiple regression analyses were performed to

49
examine whether the effectiveness of HOAs in improving neighborhood services and
in protecting property rights varies as a function of contextual factors (neighborhood
size, age, socioeconomic status and amount of problems needed to be addressed) and
organizational factors (leadership style, and the amount and types of resources
available to HOAs).

For the third research question—how the characteristics of internal governance
within Chinese HOAs impact resident participation and civic awareness—based on
the information collected from the survey, I examined three aspects of HOA internal
governance: governing structures (four categories: oligarchic, elite, limited
representative and formal representative structures), HOA Committee operations,
and leadership styles. I further explored how HOA organizational internal
governance impacts members’ civic awareness and participation by using multiple
regression and ordered logit regression models. Information from interviews with
leaders and general members and participant observations were examined in greater
depth to improve the understanding of how HOA internal governing structures and
leadership affect homeowners’ civic awareness and participation and, in turn, long-
run local democratic governance.

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CHAPTER 3 INSTITUTIONAL ENVIRONMENT OF
HOMEOWNER ASSOCIATIONS IN URBAN CHINA
This chapter discusses the legal and institutional environment under which Chinese
HOAs are developing and how HOA related institutional arrangements impact their
operation. The purpose is to offer a better understanding of how external institutions
affect the development and performance of Chinese HOAs. In the following
sections, I first discuss organizations that have important influences on urban
residential neighborhoods. Second, I will describe the regulatory system governing
HOAs in China that includes two central governmental rules, rules passed by local
governments and a standard set of HOA constitutions/bylaws adapted by nearly all
HOAs. Last, using my survey results as empirical evidence, I will discuss how
institutional arrangements impede how HOAs function and develop.

3.1 Institutional Arrangements Related to HOAs in China
The central task of this section is to offer a better understanding of the institutional
environment within which Chinese HOAs operate and develop. In this study, the
institutional environment of Chinese HOAs includes two parts: organizations and
regulatory rules. Some organizations have a great impact on neighborhood life, and
Chinese HOAs need to interact with them frequently in daily operations. These
organizations include governmental agencies that have administrative responsibilities
regarding HOAs, business organizations (developers and property management

51
firms) and other neighborhood organizations (i.e. Residents’ Committees).
Regulatory rules pertaining to Chinese HOAs generally are structured at two levels.
The first level of rules consists of governmental regulations. The second level of
rules, internal to HOAs, consists of two neighborhood constitutions—Homeowners’
Covenants and Homeowner Association Rules and Procedures.

3.1.1 Organizations HOAs Need to Work With
Primarily four organizations have an impact on how HOAs function and play an
important role in neighborhood governance: local government agencies (Street
Offices and district housing administrative departments), Residents’ Committees,
real estate developers and property management firms. Figure 3.1 shows the power
relationship among these actors.

3.1.1.1 Street Offices and District Housing Administrative Departments

The important role of government agencies in the development of HOAs cannot be
overestimated in China. As a socialist system that lacks checks and balances, the
Chinese government has more power to intervene in the life of private neighborhood
organizations than Western governments. For Chinese HOAs, almost every effort to
resolve neighborhood problems inevitably demands the involvement of
governmental agencies. HOAs need to interact directly and continually with two
agencies: the Street Office and the District Housing Administrative Department.

52

Figure 3.1 Power Relationship Structure

Central Government
(State Council)
Provincial Department of
Construction

D
e
v
e
l
o
p
e
r
s
Provincial Government

Municipal Government

District Government

Street Office
(Administers several
communities)
Residents’ Committee
(Administers one
community)
Homeowner Association
(Governs one residential
neighborhood)
Ministry of Construction
Municipal Department of
Construction
District Housing
Administration
Department
Property
Management
Firm

53
In China, a city is divided into several districts, where each has a district
government. Each district is divided further into several sub-districts. In each sub-
district, an administrative branch of district government—called the “Street Office”
(Jiedao Banshichu)—is established. For example, the City of Beijing is divided into
18 districts—eight in urban areas and 10 in suburban areas. Beijing has in total 131
Street Offices with 101 located in urban districts and 30 in suburban districts
(Beijing Municipal Bureau of Statistics, 2007).

The Street Office is the smallest administrative unit of urban government. These
street offices are responsible for daily administrative governance within their
jurisdictions, which normally includes more than 65 administrative tasks, such as
economic development, public safety, social welfare, public sanitation and birth
registration (Derleth & Koldyk, 2004). The Street Office has limited taxation
authority and mainly relies on the municipal government for financial support.

Figure 3.1 illustrates a feature of the Chinese public administrative system—the
vertical (tiaotiao) and horizontal (kuaikuai) relationships among administrative units.
Every level of government has both vertical and horizontal relationships with related
government units (Lieberthal & Oksenberg, 1988). For example, the district
government consists of a number of functional departments or bureaus, such as the
district housing administration department. District functional departments/bureaus

54
are part of the district government and part of municipal departments/bureaus with
the same function, in this case, the municipal department of construction. Therefore,
the district housing administration department is responsible to both the district
government and the municipal department of construction. Under this urban
government structure, HOAs will receive supervision from both the Street Office and
the District Housing Administrative Department—the two most relevant government
agencies that HOAs must interact with in their daily operations.

3.1.1.2 Residents’ Committees
On average, more than 10,000 residents live in the jurisdiction of one Street Office.
For example, in Beijing, each street office in urban districts administrates 70,000
residents (Beijing Municipal Bureau of Statistics, 2007). To have effective control
over urban residents or reasonable responsiveness to their needs, RCs were
established as liaisons between Street Offices and residents. As mentioned above,
while attempting to function as autonomous neighborhood organizations, RCs in
reality resemble quasi-governmental organizations and assume many administrative
tasks. The 2003 Regulation required HOAs to receive direction from RCs. This
requirement reflects the RCs’ nature as quasi-governmental organizations rather than
self-governing organizations. Many conflicts arise between HOAs and RCs because
RCs expect to guide administratively HOAs’ daily operations, while HOAs do not
feel that RCs have the legitimacy to do so. Partly due to HOA complaints, an

55
October 2007 amendment to the 2003 Regulation dropped the article that stipulated
the RCs’ directive role in HOA operations. However, as a power center of
residential neighborhood, RCs are still important actors that significantly influence
HOA functions.

3.1.1.3 Real Estate Developers
Three types of real estate development enterprises (hereafter, referred to as
“developers”) develop residential neighborhoods in China—domestic developers;
Hong Kong-, Macau- and Taiwan-funded developers; and foreign developers.
Domestic developers include state-owned, collective-owned, public-private jointly
owned, share-holding and limited liability corporations among others. Domestic
developers—a large group being state-owned enterprises—occupy the majority of
the real estate market. According to the Beijing Municipal Bureau of Statistics
(2002), of 1,142 total developers, 862 are domestic developers with nearly a quarter
(24%) of them state owned. In 2002, state-owned enterprises developed 29.5 percent
of the commercial housing (139-million square meters).

In terms of their administrative relationship with government agencies, developers
often are classified into two types: central and local. The majority of developers
have administrative relationships with local governments. In Beijing, among 1,142
developers, the central government administrated only 89 (8 percent of) developers,

56
while local governments administrated 92 percent of them (Beijing Municipal
Bureau of Statistics, 2002). Normally, developers have close relationships with local
governments. In some cases, developers are enterprises owned by local government.
For those not owned by governments, developers still have significant influence on
local government policy making because of their tax contributions, including land-
use fees and land taxes.

Developers are required to build neighborhood infrastructure and facilities, including
civil air defense, schools, neighborhood streets and lighting, and electronic and
heating facilities previously provided exclusively by local governments. As they
control the use and management of these public facilities, developers play an
important role in neighborhood governance. Therefore, they are one of the major
organizations with which HOAs interact. As discussed in Chapter 4, in fact, many
neighborhood problems—such as construction defects, changes in development
plans and infringement upon common properties—stem from developers. A major
task of Chinese HOAs today, as will be demonstrated later, is to work with
developers to resolve these problems.

3.1.1.4 Property Management Firms
Professional property management has emerged as a new industry in China
beginning with some coastal cities in the early 1980s (Zhou, He, Han, & Li, 2005)

57
and replacing traditional property management services provided by governments or
state-owned enterprises.

There are three types of professional management firms. First, Chinese public
administrative reforms transformed some local government property management
departments or stations into property management firms. These professional
management firms have inherited close relationships with local housing
administrative departments. Second, many property management firms are
subdivisions of developer firms and assume management services after building
completion. Sometimes, they function as after-sale service departments for the
developers by taking on responsibilities, such as repairing construction defects
handed down by developers. This type of management firm is the most common
today in China (Xu & Fang, 1996). The third type is newly established management
enterprises independent from both governments and the original developers. In the
beginning, many of these firms were Sino-foreign joint ventures or foreign
enterprises (Xu & Fang, 1996). Nowadays, the majority of these independent
property management firms are invested in domestically. Although independent
from developers, most of these property management firms in fact have close
relationships with developers, which have the power to select the property
management firm for a new neighborhood in most cases.

58
Property management firms are a major player in neighborhood governance. One
residential neighborhood can have only one property management firm that manages
all the housing and provides all services needed. Regulations on residential
neighborhood property management also vest property management firms with many
functions beyond business firms, such as assisting local governments in maintaining
public security and stopping homeowners from violating rules on housing
decorations and the use of real property.

In reality, property management firms, in particular those preliminary management
firms designated by developers prior to the establishment of HOAs, have substantial
power in managing the neighborhood. They have powers transferred from
developers, including managing and using common properties and facilities. Local
government agencies entrust property management firms with managing
infrastructure services, such as water, electricity and heating. As a result, property
management firms are considered a center of neighborhood power with significant
impacts on residents’ lives.

59
3.1.2 Regulations on Chinese HOAs
The regulatory system
8
over Chinese HOAs includes external regulation, such as
regulations set up by the central government, rules passed by local governments, and
internal regulations, that is, HOA constitutions (i.e. Homeowners’ Covenants, and
HOA Rules and Procedures) mostly adapted from Standard Rules provided in
2003 Order No. 131—“The Notice of the Ministry of Construction on Distributing
‘Rules of Procedures of Homeowner Associations’”—issued by the Ministry of
Construction based on the 2003 Regulation on June 26, 2003 (hereafter, referred to
as “2003 Notice”)
9
(see Figure 3.2).

3.1.2.1 Central Governmental Regulations
The regulations from central government are the most critical external institutions
that impact the functioning of HOAs for two reasons. First, the Chinese
governmental system emphasizes central control. Local governments tend to follow
the regulations from central government with some exceptions (as will be discussed

8
The lowest level of rules pertaining to HOAs is operational rules. Operational rules consist of HOA
committee working rules, HOA committee seal management rules, secretary working rules and so on.
The HOA committee self imposes these regulations. Government documents do not require
operational rules, and homeowners often have no self-governing experience or history. As a result,
not many HOA committees create operational rules. Therefore, this study does not consider this level
of rules in the HOAs’ regulatory system.

9
The Order No.133 is available at
http://www.cin.gov.cn/zcfg/jswj/fdcy/200611/t20061101_18757.htm (in Chinese)

60
later). Second, the Chinese legal system determines the governmental laws and rules
important in guiding organizations’ actions. China’s legal system follows the
continental tradition, which expects the legislature and government to set up laws
and rules to guide the actions of parties, such as by defining legal rights and
obligations. Therefore, how the regulations from central government define HOA
rights, roles, functions and activities has a pivotal impact on the development of
HOAs.

Figure 3.2 The Regulatory System on HOAs in the Newly Developed Urban
Residential Neighborhoods

Central Governmental Rules
z The 2003 Regulation (State Council)
z The 2003 Notice (Ministry of Construction)
Local Governmental Rules
(Province, City and District Levels)
HOA Constitutions
z Homeowners’ Covenants
z HOA Rules and Procedures
HOA Operational Rules
z HOA Committee rules
z HOA Committee staff working rules
z HOA Committee seal using rule, etc.

61
Not only is the content of the regulation important but also the clarity and
comprehensiveness of the regulation. Clear and detailed regulations make it easier
for HOAs to follow them and conduct actions within their boundaries. In contrast,
abstract and vague rules create difficulties for organizations in carrying out their
daily operations and solving neighborhood issues. As will be discussed later, HOAs
are a new social-economic phenomena in China. The government established HOA
regulations in a reactive rather than proactive manner. The absence, ambiguity and
incoherence of governmental regulations governing Chinese HOAs are the very
sources of many problems plaguing Chinese HOAs. They also constitute the most
serious obstacles to the development of Chinese HOAs. This section is devoted to
describing the regulations that have been set up by central governments.

The main regulations over Chinese HOAs are two central governmental rules issued
in 2003. One is the 2003 Regulation serving as the major decree concerning housing
management in urban residential neighborhoods. It was amended in August 2007
based on the newly passed Property Rights Law of China, however, with few critical
changes. The other one is 2003 Notice issued by the Ministry of Construction based
on the 2003 Regulation. These two central governmental documents provide a
guiding framework for the establishment and governance of Chinese HOAs.

The 2003 Regulation
The 2003 Regulation specifies rules with regard to:

62
z General rights and obligations of homeowners;
z Responsibilities of homeowner associations and voting rules;
z Governing structure (general membership meetings and elected HOA
Committees);
z Preliminary property management prior to when HOAs began selecting
management firms;
z Property management services;
z Use and maintenance of properties within the neighborhood.

General Rights and Obligations of Homeowners
The 2003 Regulation specifies rights and obligations of homeowners. A homeowner
is defined as the titleholder of a housing unit. Homeowners have the right to:
1) Receive services provided by the property management firm pursuant to the
stipulations of the property management service contract;
2) Propose to hold HOA general membership meetings and provide
suggestions for matters relating to property management;
3) Provide suggestions on the formulation and modification of Homeowners’
Covenants, and HOA Rules and Procedures;
4) Attend HOA general membership meetings and exercise voting rights;
5) Elect members of the HOA Committee and be elected as an HOA
Committee member;
6) Monitor the work of the HOA Committee;
7) Monitor the performance of the property management service;
8) Know and monitor the use of common spaces and facilities;
9) Monitor the management and use of special maintenance funds; and
10) Other rights granted by laws and regulations (Article 6, 2003 Regulation).
Homeowners also have the obligation to:
1) Abide by Homeowners’ Covenants, and HOA Rules and Procedures;

63
2) Abide by rules regarding the use of common spaces and accessory
facilities, and maintaining public safety and sanitation within the property
management area;
3) Accept decisions of the HOA and HOA Committee based upon the HOA’s
authorization;
4) Pay public special maintenance funds pursuant to the relevant
governmental provisions;
5) Pay property management service fees on time; and
6) Other duties prescribed by laws and regulations (Article 7, 2003
Regulation).

The rights and obligations of tenants and homeowner family members are not
specified, but the 2003 Regulation prescribes that their rights and obligations should
be agreed upon with the homeowners. The owners should bear joint liabilities for
violations by their family members and tenants.

Responsibilities of an HOA and Voting Rules
General HOA members make many decisions with regard to matters of common
interest in residential neighborhoods. This differs from Western HOAs, where the
boards of directors or managers make many decisions (Davis, 1991; Dilger, 1991).

The 2003 Regulation requires that HOA general members make some important
neighborhood decisions. The amended Regulation prescribes that decisions
regarding the collection and utilization of special maintenance funds, and the repair,
reconstruction and rebuilding of buildings and accessory facilities must get approval
from two “two-thirds”: 1) at least two-thirds of the total homeowners; and 2)

64
homeowners whose exclusive dwelling areas account for more than two-thirds of the
total area of neighborhood buildings.

The amended 2003 Regulation also requires that final decisions with regard to the
following matters must receive approval from at least half of the homeowners and
from homeowners whose exclusive dwelling areas account for more than half of the
total area of neighborhood buildings:
1) The enactment and modification of HOA Rules and Procedures;
2) The enactment and modification of Homeowners’ Covenants;
3) Election and impeachment of HOA Committee members;
4) Employment and dismissal of the property management firm; and
5) Other major and important matters with regard to the co-ownership and
rights of common management. (Article 11, 12, 2003 Regulation)

The Governing Structure
The only governing body of Chinese HOAs prescribed in the regulations is an
elected HOA Committee. In the 2003 Regulation, the HOA Committee is defined as
“the executive body” of the HOA, which implements decisions made by HOA
members at general membership meetings. Chinese HOAs tend to have difficulties
in holding frequent general membership meetings because of the difficulties of
obtaining the required quorum in neighborhoods with hundreds or thousands of
members. As a result, the HOA Committee in fact takes many decision-making
responsibilities within neighborhood well beyond the executive role described in the
2003 Regulation.

65

According to the regulation, the HOA Committee should perform the following
duties:
1) Convening HOA general membership meetings and reporting to members
the status of neighborhood property management;
2) Signing the property management service contract with the property
management firm selected by the HOA;
3) Listening to the opinions and suggestions of homeowners and tenants, and
monitoring and assisting the property management firm in fulfilling the
service contract;
4) Monitoring the implementation of Homeowners’ Covenants; and
5) Other duties assigned by the HOA. (Article 15, 2003 Regulation)

The 2003 Regulation also demands that the HOA Committee register with the
District Housing Administrative Department or Street Office within 30 days from the
day of its formation through election.

Moreover, the 2003 Regulation stipulates that homeowners should elect directly
HOA Committee members with a simple majority rule. The director and vice
director of the committee should be elected from the members of the HOA
Committee, although the regulation does not specify the committee’s election
procedures, legal liabilities, fiscal rules and so on.

Preliminary Property Management
The 2003 Regulation also specifies the preliminary property management in newly
developed residential neighborhoods. Preliminary property management refers to

66
the property management activities undertaken by a management firm after the first
homeowner moves in but before the establishment of an HOA.

Before they sell housing units to buyers, developers prepare Temporary
Homeowners’ Covenants (yezhu linshi gongyue) for buyers, which stipulate the use,
maintenance and management of real property; the common interests of
homeowners; the duties of homeowners and liabilities for breaching temporary
covenants. Individual buyers commit in writing to abide by the temporary covenants
when they sign contracts with developers. The Ministry of Construction provided
developers a standard sample of Temporary Homeowners’ Covenants in the
attachment of the 1997 Order No. 219. The temporary covenants expire as soon as
an HOA is established and a new Homeowners’ Covenant is passed (as will be
discussed later).

Property Management Services
The 2003 Regulation requires that there shall be one professional property
management firm, responsible for delivering property management services in a
residential neighborhood.
10
The management firm may contract out some services to

10
A residential neighborhood also is referred to as one property management area. According to the 2003
Regulation, “the division of property management areas should consider the elements such as common facilities,
building scale and community construction, etc. The specific measures are stipulated by the provinces and
municipalities” (Article 9). Usually, a residential neighborhood is defined as a residential area built by real estate
developers, operated under single management, and having common facilities and clear territorial boundaries.

67
other professional enterprises. The 2003 Regulation also describes some functions
that property management firms shall carry out within the neighborhood, such as
stopping any act violating the laws and regulations in respect to public security,
environmental protection, housing decoration and the use of real property; reporting
illegal acts to governmental agencies; and assisting local governments in maintaining
public security.

The property management firm collects monthly management fees from each
housing unit. The developer pays the service fees for unsold housing units.
Homeowners and the management firm agree upon the service fee amount in the
service contract. The housing administrative department and the price regulatory
agency at the district level and above supervise the collection of service fees.

The 2003 Regulation was amended in August 2007 to adjust to the newly passed
Property Rights Law, although most of the Regulation content did not change. Two
substantial changes are as follows.

First, the amendment removed the section describing RC roles in directing HOA
operations. Second, the amended Regulations revise the voting rules of HOAs on
important common issues. Before the revision, members whose exclusive parts
account for more than two-thirds of the total area of the apartment buildings

68
approved decisions regarding the use of special maintenance funds and the
modification of the use of common spaces and facilities. In the amended Regulation,
the voting rules for these issues include garnering approval from more than two-
thirds of the total number of homeowners, which limits the decision power of
homeowners, such as the developer, who own large areas.

The rest of the changes mainly pertain to wording. For example, the term “property
management firm” was replaced with “property service firm,” “Homeowners’
Covenants” was changed to “Homeowners’ Management Rules,” and “Temporary
Homeowners’ Covenants” was changed to “Temporary Management Rules.”

The 2003 Notice
The Ministry of Construction issued the 2003 Notice because the 2003 Regulation
does not provide detailed guidance for the operation of HOAs and their committees.
The Notice specifies more detailed rules with respect to the procedures of
establishing an HOA, decision-making procedures and voting rules, HOA
membership meetings and HOA Committee meetings.

Procedures of Establishing an HOA
Figure 3.3 indicates the four steps of establishing an HOA within a residential
neighborhood.

69

Figure 3.3 Procedures of Establishing an HOA

First Step: Establish an HOA preparatory group. To establish an HOA, as the first
step, homeowners need to consult with and get approval from the District Housing
Administrative Department and Street Office for establishing an HOA preparatory
group. The HOA preparatory group consists of representatives from the developer as
well as homeowners. However, as will be discussed later, the 2003 Notice does not
specify how to choose representatives from homeowners.

Establish an HOA preparatory group
Hold the first membership meeting and elect the HOA
Committee
Hold the first HOA Committee meeting and elect the
director and vice-director(s)
HOA Committee should register with the district housing
administrative department or Street Office within 30 days

70
The preparatory group is responsible for:

z Setting up the dates, location, format and agenda for the first HOA membership
meeting;
z Drafting the HOA constitutions according to the standard samples provided by
local governments;
z Deciding the voting rules, particularly the weight of each vote for the first
membership meeting;
z Deciding the election procedures of the HOA Committee and confirming a list
of HOA Committee member candidates;
z Other preparatory tasks.

The Notice requires that the preparatory group publicize the aforementioned items to
neighborhood residents 15 days prior to the first membership meeting. The group
must finish all preparatory tasks within 30 days after it is established and hold the
first HOA general membership meeting under the guidance of relevant governmental
agencies. The group is discharged immediately after the election of HOA
Committee.

Second Step: Hold the first general membership meeting. At the first meeting,
general members should vote on and approve the Homeowners’ Covenants and HOA

71
Rules and Procedures with more than two thirds of the total vote. In addition,
general members need to elect HOA Committee members with a simple majority
rule. Voting rights are given based on housing unit—one for each housing unit.
However, the 2003 Notice does not specify the weight of each vote at the first HOA
general membership meeting. It requires the preparatory group “to follow the
guidance in the municipal regulatory rules to decide the voting weights” (Article 7,
2003 Notice). In practice, the weight is calculated based on property percentage but
sometimes on “one vote one household.”

Third Step: Hold the first HOA Committee meeting and elect committee directors.
According to the 2003 Notice, within three days after its election, the HOA
Committee should hold the first committee meeting, and elect one committee
director and one or two vice directors.

Procedurally, after the three steps above, elected HOA Committees shall register
with the District Housing Administrative Department and Street Office within 30
days from the day of its formation.

Meetings
HOA meetings include HOA general membership meetings and HOA Committee
meetings.

72

The general membership meeting requires more than half of its members—usually
counted on the basis of housing unit area but sometimes on a “one vote one
household” basis—to be present to make decisions. Membership meetings include
regular meetings and temporary meetings (Article12, 2003 Notice). Regular
meetings are convened according to the HOA Rules and Procedures. Temporary
meetings are convened upon the request of more than 20 percent of the total
members or in cases involving important and urgent issues (Article 12, 2003 Notice).

Membership decisions can be made at meetings in person or through written votes.
Finding a meeting place large enough to accommodate hundreds or thousands of
members and a time convenient to all members’ schedules presents challenges.
Therefore, most Chinese HOAs make decisions through a written format. Ballots
with the names of committee candidates and items for approval are sent to members
in advance. Members then place the ballot into designated, sealed boxes within the
neighborhood. In addition to direct ballot voting, proxy votes normally are accepted.
For fairness, Resident Committee members or local governmental officials usually
are invited to supervise the ballot counting.

HOA Committee meetings are held to carry out the daily operations of HOAs. The
committee director or more than one-third of committee members can initiate a

73
committee meeting. The 2003 Notice establishes a quorum requirement (more than
half of committee members) for committee meetings to be held and formal decisions
to be made at committee meetings. Committee decisions should be publicized.

Finances
The 2003 Notice prescribes in principle that HOA members are responsible for the
operating funds of the association and HOA Committee but does not specify how to
raise, use and manage funds. As a result, many HOAs lack rules specifying the
collection, use and management of operating funds. Some HOAs describe their
financial rules in their HOA constitutions.

3.1.2.2 Local Governmental Rules
The central government requires local governments to set up detailed provisions to
regulate HOAs in consideration of local political, economic and cultural conditions.
Some provinces passed local rules, while many others merely circulated central
governmental rules to local housing administrative departments. In those that passed
local rules, local governmental regulations reflect some variations.
11
However, in

11
Many Chinese scholars and practitioners criticize such variances among local regulations, and the
inconsistency between local and central rules. In many cases, local governmental regulations provide
contradictory guidance to HOAs. Sometimes, local governmental regulations even conflict with
central governmental rules. Hu (2004) discussed in more detail variances among local HOA
regulations.

74
general, local governments follow the principles of the 2003 Regulation and the 2003
Notice, and stipulate more detailed guidance for HOAs, such as voting procedures,
the calculation of voting weights, the procedures for discharging committee members
and filling vacancies, and so on. For the focal city of this study, Beijing, the
municipal government did not pass local regulatory rules. The Beijing Municipal
Housing Administrative Department adopted central governmental rules with little
customization.

3.1.2.3 HOA Constitutions: Homeowners’ Covenants and HOA Rules and
Procedures
The 2003 Regulation and the 2003 Notice both require HOAs to enact their own
constitutions—Homeowners’ Covenants and HOA Rules and Procedures. As soon
as HOAs are established and their constitutions are approved at the first general
membership meeting, the temporary homeowners’ covenants prepared by the
developer expire, and the new rules apply.

According to the 2003 Regulation, Homeowners’ Covenants “shall stipulate, in
accordance with law, the use, maintenance and management of the relevant real
properties, the common interests of the homeowners, the obligations of the
homeowners and the liabilities for breaching the Covenants” (Article 17, 2003
Regulation).

75

In general, almost all Homeowners’ Covenants are similar within a city because most
HOA preparatory groups draft HOA Covenants from the standard sample prepared
by the local housing administrative department. The main reasons follow. First,
copying the existing sample is easier than writing a new one. For some HOAs,
homeowners do not pay attention to the role of HOA constitutions/bylaws in
governing association affairs. They merely adopt the standard constitution to fulfill
requirements. Second, the preparatory group members and active homeowners lack
the experience, information or ability to draft a new covenant with reasonable detail.
Third, copying existing samples provided by the government may reduce the
possibility of registration failure.

Usually, the Standard Covenants and Rules provided by local governments only
prescribe general conditions and restrictions. For example, the Standard Covenants
provided by the Beijing Municipal Government merely specify the definition of
territorial boundaries, the restrictions on the use of common spaces, and the
responsibilities of maintaining common properties, controlling pets and collecting
management service fees.
12

12
For details on the Standard Covenants and Rules, please refer to Attachment 3 of the 2003 Order
949 of the Beijing Land Resources and Housing Management Bureau, which can be accessed at
http://www.fayixing.com/lawcontent.jsp?id=88343 (in Chinese).

76

As most HOAs only adopt the Standard Covenants, Homeowners’ Covenants have
not played their expected role in regulating people’s behaviors within
neighborhoods. For example, standard samples only define the territorial boundaries
of the property management jurisdiction and leave common places or facilities
undefined. Therefore, the neighborhood constitution does not specify “what people
can do” or “what people cannot do” with regard to common properties and spaces.
Moreover, the minimum standards provided by the Standard Covenants cannot
ensure this governing document’s authority and power. The Standard Covenant
requires that “homeowners shall not violate the Covenants. To those who violate the
rules, the association, its committee and general members shall urge them to correct
violated behaviors,” but it does not specify the legal liabilities for violations and
what penalties residents will receive if they violate the Covenant. As a result, the
neighborhood constitution does not have much power in regulating homeowners
within the neighborhood as expected.

The HOA Rules and Procedures is another important HOA governing document.
According to the 2003 Regulation, the HOA Rules and Procedures “shall stipulate
the decision-making methods, voting procedures, methods for determination of
homeowners’ voting rights, composition of the HOA Committee, and tenure of the
committee members, etc.” (Article 18, 2003 Regulation). The process of enacting

77
HOA Rules and Procedures has been similar to Homeowner’s Covenants. Most
HOAs simply follow the Standard Rules provided by local governments.

These two governing rules can be revised with the approval of at least half of the
total votes within a neighborhood. As mentioned earlier, many HOAs have followed
Standard Rules without much customization due to reasons other than internal
efficiency. In their operations, many HOAs find it necessary to revise these
governing documents, but the high voting requirement impedes them in doing so.

3.2 The Impact of Regulations on the Development of Chinese
HOAs
In this section, I analyze the impacts of these institutions on the development and
functions of Chinese HOAs based on information collected from interviews with
HOA leaders (such as the interviewees’ comments on their experiences with
establishing an HOA and on regulatory rules and institutions), and conversations
with scholars in this field, community activists and homeowners.

3.2.1 Difficult to Establish and Register
Current institutions make HOAs difficult to establish and register in the following
aspects:

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First, initiating an HOA preparatory group is difficult under current regulations. The
2003 Regulation and the 2003 Notice require that an HOA preparatory group be set
up under the direction of the District Housing Administrative Department and Street
Office. Moreover, the preparatory group needs to include representatives from the
developer and homeowners. These requirements form obstacles for the
establishment of an HOA.

The main obstacle involves the legitimacy of HOA preparatory groups initiated by
homeowners alone. The regulations do not define the role of governmental guidance
and developer involvement in the establishment of the preparatory group. They do
not specify what homeowners can do if governmental agencies do not provide
guidance or the developers do not send representatives to participate in the
preparatory group. Therefore, whether homeowners alone can initiate a preparatory
group if developers choose not to participate or government agencies choose not to
provide guidance remains unclear. In fact, among the sampled HOAs in this study,
only 34 HOAs (37 percent) received guidance from local governmental agencies
when establishing the HOA. The remaining 63 percent of HOAs did not receive any
governmental guidance. Moreover, leaders from 16 HOAs stated that local
governmental agencies became obstacles to establishing the associations.
Furthermore, several interviewees demonstrated that homeowners cannot establish
preparatory groups until they sue government agencies for their administrative

79
nonfeasance (i.e. the failure to provide guidance). Moreover, many developers do
not willingly participate in preparatory groups. In the HOAs surveyed, 38 percent of
them (35 HOAs) had no way to involve developer representatives in the preparatory
groups. As a result, a preparatory group without developer representatives had to
take more time to complete their preparing tasks than those having representatives
from the developers. My survey finding shows that a preparatory group on average
took seven months to complete their preparing tasks for holding the first general
membership meeting. The groups without developer representative usually took nine
months while those having developers’ involvement took five months on average. In
the extreme cases, there are two neighborhoods spent more than four years to
establish their HOAs without developers’ support.

Furthermore, regulations do not specify how to select preparatory group members
from homeowners. In many cases, neighbors recommend preparatory group
members for their successful or active rights-upholding activities. However,
developers and governmental agencies often view these residents as “trouble-
makers” and question them regarding their eligibility as preparatory group members.
Thus, local governmental agencies usually do not acknowledge the legitimacy of
preparatory groups initiated by homeowners alone and do not allow them to establish
HOAs.

80
Second, the high vote requirements for establishing an HOA under current
regulations is difficult to achieve. The 2003 Notice and local governmental rules
require that members who occupy at least two thirds of the total area of the
apartment buildings approve Homeowners’ Covenants and HOA Rules and
Procedures at the first HOA general membership meeting. At the same time, the
HOA Committee shall be elected with a simple majority rule. Some interviewees
demonstrated that they have failed several times to reach these three voting
requirements simultaneously and had to hold other general meetings until these
requirements were met. I was also told for several times that many residential
neighborhoods in Beijing cannot reach these three voting requirements to establish
their HOAs.

The high vote requirements are difficult to meet because of the following reasons:

z Obtaining a list of all homeowners is time consuming. The regulations grant
every homeowner voting rights. Therefore, to start a voting procedure,
preparatory groups need to have a contact list of all homeowners within the
neighborhood. The list includes information, such as residents’ names, personal
contact information and the area of each apartment unit. Developers or the
preliminary property management firm appointed by the developer own the list.
If they support homeowners in establishing an association or the local

81
government pressures them to provide the list, the developer or preliminary
property management firm will offer the list to the preparatory group. However,
most HOA preparatory groups in my survey did not obtain the list from
developers. They gathered contact and unit area information from homeowners
through door-to-door collection. For a neighborhood with hundreds of housing
units, obtaining a full list requires three month on average (Qin, 2006). For a
neighborhood with thousands of housing units, obtaining a full list requires at
least three months. Therefore, for large neighborhoods with 5,000 to 25,000
housing units, even beginning to establish an HOA is too costly.

z Gathering hundreds or thousands of people to attend meetings and vote is too
costly. In neighborhoods with many tenants, asking homeowners who do not
live in the neighborhood to return to vote is costly. For example, in a Beijing
neighborhood with 1,500 households, preparatory group members pay RMB
75,000 ($1=RMB7.4) to notice all homeowners about participating in the first
general membership meeting (Qin, 2007). Not every neighborhood has such
active homeowners who donate their time and money to obtain votes.

z Collective action problems impede the achievement of garnering a superior
majority of votes. Collective inaction and free rider problems more likely occur

82
in large neighborhoods with thousands of members (Olson, 1965; Stevens,
1993), which makes obtaining two-thirds of the vote difficult

z Homeowners have different backgrounds, socioeconomic statuses and
occupations, which make it difficult to achieve consensus or align interests
among thousands of people. Many homeowners do not feel the necessity of
establishing their own association. Given this situation, the high vote
requirements are hard to achieve.

z Developers that own a large number of housing units can use their voting
advantage to block homeowner efforts in establishing HOAs. According to
regulations, the weight of each vote at the first HOA general membership
meeting is calculated based upon property percentage. That is, owners with
larger units have more voting weight. Many developers own a large number of
housing units that have not been sold and therefore have significant voting
power. They often use their voting advantage to thwart the establishment of
HOAs. Some neighborhoods cannot establish an HOA even after 10 years
because of the voting advantage of the developers (Qin, 2007). Developers do
not want HOAs to be established because of their economic interests. Upon the
establishment of HOAs, developers must inform HOAs of their common
properties, defining which common places belong to homeowners and which

83
belong to developers. In most cases, developers do not register common assets
with governmental housing administrative agencies or define the common
properties that belong to homeowners because Chinese legal rules are not
complete and restrictive regarding the registration of public assets within
residential neighborhoods. Developers occupy the homeowners’ common
properties and earn large profits from these properties. The establishment of
HOAs means that developers would lose a huge economic interest. Moreover,
developers often have not fulfilled some promises with the lack of common
facilities, the replacement of a planned kindergarten with a shopping center, the
reduction of green space and so on. If HOAs are established, homeowners
would be more organized and thus more powerful in negotiations with
developers for improvements or compensation.

z Last but not least, property management firms set up many obstacles to hinder
homeowner voting. Preliminary management firms normally have close
relationships with developers. In my survey, 85 percent of management firms is
either a subsidiary of a developer or has very close relationship
13
. They resist
the establishment of HOAs because property management firms must sign
service contracts and receive monitor from HOAs. Property management firms

13
The interviewees call the close relationship between developers and property management firms as
“father-son relationship” or “brother/buddy relationship”.

84
also must inform HOAs of their income and expense accounts, particularly the
income from homeowner common properties, such as advertising fees in public
elevators and income from renting public spaces and parking lots. In some large
neighborhoods, this income results in millions of RMB per year. The
management firms must transfer whole or part of the public income to HOAs.
Moreover, if dissatisfied with services and fee standards, HOAs can fire
property management firms. The huge economic interests at stake often lead
preliminary property management firms to interfere with the voting process
through all means, such as removing public notices, stopping preparatory groups
from distributing ballots or even physically threatening preparatory group
members and active homeowners.

Third, registering with the District Housing Administrative Department and Street
Offices is difficult under current regulations.

According to the 2003 Regulation and the 2003 Notice, HOAs must register with
local government agencies. However, in practice, local governments impose
restrictive conditions on registrations. For example, the housing administrative
department in the Changping District of Beijing requires HOA Committees to
prepare at least 12 documents to register. These documents include a complete list
of homeowners, committee members’ receipts for paying property management firm

85
service fees and photographs of public notices posted by preparatory group, etc.
HOAs cannot register if documents are “not complete, not in compliance with the
Standard or not effective.” One interviewee mentioned that she went to the district
housing administrative office more than 40 times to register.
Sometimes, they just picked up one or two typos and told us that our
materials are not qualified for registration. We need to come back
and forth many times to get their approval.

Why are local housing administrative departments not willing to support the
establishment of HOAs?

z First, after an HOA is established, local housing administrative departments
must transfer the public special maintenance funds belonging to the
neighborhood to the HOA (Chen, 2006; Qin, 2007). Developers collect public
special maintenance funds from homeowners. When they buy their housing
units, homeowners pay 2 percent of the total housing price toward the
neighborhood public special funds for future housing maintenance and repair.
Developers then transfer the funds to local housing administrative departments.
After an HOA is established, local housing administrative departments must
transfer the money back to the HOA and can no longer own the profits from
managing the funds. The amount of special maintenance funds in each
neighborhood is large. For example, in my survey, the average housing unit
consists of 984 households. If the average price of each housing unit were RMB

86
400,000, the public funds of one residential neighborhood would be
approximately RMB 8 million. Because of this significant economic interest,
local housing administrative departments resist the establishment of HOAs.

z Second, local governments are more likely to side with developers and property
management firms rather than self-governing, civic-oriented HOAs. A large
portion of local government income comes from business fees/taxes (such as a
land use fee and tax). Therefore, developers and property management firms
tend to be more influential in local governmental decision-making. Moreover,
some developers are local government-owned enterprises and have various
relationships with government officials. In addition, regulations grant property
management firms many social functions, and local governments need their
assistance in carrying out these functions, such as maintaining public security.
Thus, local governments tend to view property management firms as partners.
In some cases, individual government officials may receive bribes from
developers and property management firms for protecting their interests.
Because of these reasons, local governments more likely side with developers
and management firms against the establishment of HOAs. They tend to set up
many obstacles that prevent homeowners from registering their associations
successfully.

87
z Third, the long-standing discriminatory culture again citizen-initiated, non-
governmental organizations make local governments hesitant in supporting the
establishment of HOAs. As discussed above, the protection of property rights
serves as the fundamental driving force for the establishment of HOAs. To
protect common interests infringed upon by developers and property
management firms, HOAs take various actions to counter those outside forces,
such as organizing demonstrations and petitions; suing developers and property
management firms for breach of contract; and suing governmental agencies for
their administrative nonfeasance. These activities draw much attention from
media and higher-level governments. Therefore, local governments usually
consider HOAs an unstable social force that interrupts the establishment of a
“harmonious society.” In one interview, the head of a Street Office expressed
non-supportive attitudes toward HOAs. He commented that HOAs are “just
posing more problems,” and “they are not able to resolve any problems but mess
things up.” These comments demonstrate that local governments are cautious
with HOA activities and unwilling to allow HOAs to grow quickly.

z Last, property management areas are difficult to define. According to the 2003
Regulation, only one HOA is allowed to be established in one property
management area. The property management area should be defined
“considering the factors such as common facilities, building scale and

88
community development and so on. And the specific measures shall be
formulated by the provinces, autonomous regions, and metropolitan areas”
(Article 9, 2003 Regulation). However, few local regulations provide clear and
specific guidelines on how to define a property management area, especially for
neighborhoods developed in several stages over the years. In China, the housing
market uses the pre-sell system. Developers usually sell the housing units
before construction. If the project is profitable, developers usually invest more
money to continue the second, third or more stages of development. Therefore,
the complete residential neighborhood with multiple stages might be developed
in 10 years. Homeowners of houses developed in the project’s early stages can
hardly initiate HOAs because local government agencies require the inclusion of
homeowners in houses developed in later stages. In many cases, local
governments do not allow homeowners from a single stage to register as a legal
HOA even if they meet all other requirements.

Because of the reasons elaborated above, HOAs have difficulties in establishing and
registering. Beginning a preparatory group, organizing general member voting and
registering with local agencies is difficult. In fact, only 10 to 20 percent of urban
residential neighborhoods have formed HOAs across Chinese cities. For example, in
Beijing, about 18 percent of neighborhoods have formed HOAs (Ge, 2007). In
Guangzhou, only 13 percent of residential neighborhoods had registered HOAs by

89
2005 (Xu & Liu, 2005). The obstacles posed by developers, property management
firms and local government agencies have impeded the growth of HOAs in urban
China.

3.2.2 Difficult to Operate and Develop
Current institutions not only impede HOA establishment and registration but also
adversely affect their operations and future development. Survey responses from
this study suggest that for those already established HOAs, the control-oriented
nature, ambiguity and incompleteness of HOA regulations greatly have impaired the
capability to carry out social functions to address neighborhood issues.

In interviews, respondents were asked to indicate the extent to which the listed 16
factors are helpful for the normal operations and problem-solving capabilities of their
HOA using four Likert-scale responses: 1— not helpful at all; 2—somewhat helpful;
3— helpful; 4— very helpful. Table 3.1 lists the mean importance score for each
factor and standard deviation. Interestingly, Table 3.1 shows that the most helpful
factors indicated by the respondents all relate to external institutions
(regulations/laws /implementation). To save space, I only analyze how external
institutions (the top four factors) influence Chinese HOA operations.

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Table 3.1 The Importance of Factors that Impact HOA Operations
Rank Factors Mean
Standard
Deviation
1
Provision of more legitimacy to the
organizations 3.64 0.07
2
Government’s strong will to implement the
regulations 3.52 0.08
3 Provision of laws on property management 3.51 0.09
4
Favorable regulations/rules (such as an
enforceable problem) 3.49 0.09
5 More members' participation and support 3.40 0.09
6
More professional members' participation and
support 3.25 0.09
7
More capability and expertise of HOA
Committee members 3.23 0.11
8
More material/financial resources (e.g. full-
time staff, money) 3.07 0.11
9
More responsiveness and support from district
governments 3.04 0.12
10
More HOA Committee members' efforts and
unity 3.01 0.11
11 Media or public sympathy 3.00 0.11
12 More support from city government agencies 2.97 0.12
13
More information (such as on policy-making
procedures) 2.79 0.11
14
More relations and interactions with other
HOAs 2.73 0.10
15
More relations and support from Residents’
Committees 2.60 0.11
16
More personal relationships with government
officials 2.52 0.12
(N=73)

First, Table 3.1 shows that the most important factor helpful to HOAs in carrying out
their social functions in neighborhood governance is providing HOAs with more

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legitimacy. The answer reflects the urgent need for the recognition of HOAs as a
legal entity.

Current regulations and the newly passed Property Rights Law do not define the
legal status of HOAs. Legally, HOAs are neither social nor business organizations
because they cannot register with the local Bureau of Civil Affairs—the only
governmental agency managing social organizations—or with the local Bureau of
Industry and Business Administration that manages business organizations. As an
unincorporated association, an HOA cannot fulfill its legal rights and liabilities, and
also cannot bring a lawsuit to court.

HOAs do not have a clear legal status nor do their elected committees. Therefore,
many HOA Committees cannot take legal actions to protect neighborhood common
interests. Furthermore, without clear legal status as an incorporated or social
organization, an HOA and its committee cannot open a bank account. In this study’s
survey, only one HOA Committee opened an independent bank account because of a
member’s personal connection with the bank staff. This has become one of the
reasons why Chinese HOAs have difficulties in managing their own funds. Lacking
legitimacy to take certain actions, HOAs and their committees are limited greatly in
their operations and problem-solving ability.

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On the other side, not being granted status as a legal entity, HOAs and their
committees do not need to assume legal liabilities. Making HOA Committees liable
or penalizing them for illegal activities is difficult even if an HOA Committee does
not execute decisions made by HOA general members or makes decisions that
impair the common interests of homeowners, such as signing a service contract
without the approval of the majority of homeowners. At most, homeowners can
request that related governmental agencies nullify wrongful decisions/ behaviors by
HOA Committees. Therefore, the lack of legal status and legitimacy in taking
actions impair HOA capabilities in performing their functions.

Second, HOA directors indicated that the governments’ stronger willingness to
enforce regulations helps HOA development and operations. As the regulations
informally grant local governments many powers to regulate HOAs and property
management firms, government attitudes toward HOAs and how they implement
rules have enormous impacts on HOA operations. It should be noted that with a
strong totalitarian tradition, Chinese governments have a long-standing
discriminatory attitude toward all non-party-led associations, which have an impact
on the regulation enforcement of Chinese HOAs. Especially when the regulatory
system is incomplete and ambiguous, government/official attitudes toward HOAs is
critical for interpreting and implementing regulations.

93
In interviews with HOA leaders, all respondents mentioned that government officials
are not willing to enforce regulations in favor of HOAs. For example, the 2003
Regulation stipulates that HOAs have the right to choose property management
firms. Accordingly, in September 2005, an HOA discontinued the service contract
with the preliminary management firm designated by the developer and hired a new
management firm through an open bidding process. However, the preliminary
property management firm refused to leave the neighborhood, and continued to
occupy underground parking lots and community properties designated for property
management firm use. Meanwhile, the new property management firm moved into
the neighborhood. The HOA Committee requested local governmental agencies to
force the preliminary management firm to leave the neighborhood many times.
However,
They [the governmental officials] did not have sympathy with us
[homeowners]. They don’t want to help us resolve the problems at
all. They just mutually shirk responsibility.

At the time of the interview, these two property management firms had co-existed in
this neighborhood for 10 months. Finally, the HOA-hired management firm left the
neighborhood because it could not use the community properties designated for the
use of property management firms and other facilities occupied by the preliminary
management firm. This is not a special case. Many HOAs have similar difficulties.

94
Third, HOA directors indicated that more favorable regulations/rules help their
organizations carry out their functions. For example, some interviewees said that
their associations would be able to resolve their neighborhood problems more
effectively if more specific and thus more enforceable government rules were
stipulated. This again demonstrates that current external institutions fail to provide
HOAs with a favorable environment for functioning and developing.

The unfavorable/unsupportive nature of current regulations reflects two seemingly
conflicting yet consistent aspects. On the one hand, current regulations tend to
closely micro-manage HOAs and limit their autonomy. On the other hand, current
regulations only declare HOA rights in principle with no specifics guaranteeing the
operationalization of these rights. This paradox reflects the control-oriented nature
of the Chinese administrative system. Under current regulations, HOAs not only
lack the legal rights/status to exercise their functions as discussed above but also lack
the flexibility required for higher quality neighborhood service delivery.

Current regulations favor clear-cut control over neighborhood service delivery and
significantly limit HOA autonomy:

z First, although HOAs are self-governing organizations by nature, regulations do
not allow HOAs to choose management types other than professional

95
management. The 2003 Regulation defines property management as “the
activities of maintenance and management of buildings and accessory facilities
as well as the protection of public environment and security carried out by the
property management firm selected by homeowners pursuant to the service
contract” (Article 2, 2003 Regulation). As it only stipulates one property
management type—professional management—this article excludes other types
of management, such as self-organized management, as legal methods in
practice.
14
In this study’s survey, some HOAs in low socioeconomic status or
small neighborhoods expressed a strong willingness to organize their own
management bodies:
If permitted, we want to organize our own management body. We do
not need professional services delivered by the current property
management firm. In our neighborhood, we have many retired and
unemployed people. We can hire some of them to clean the public
spaces or manage parking lots. They can do better jobs than this
current property management firm. …. If so, we (homeowners) do
not need to pay that much service fees. Now, we have to pay for
whatever services the property management firm delivers regardless
of the quality or whether they are really needed.

14
The newly passed Property Rights Law allows homeowners to manage their own properties.
Article 81 stipulates: “The homeowners may, at their own discretion, either manage the building and
its accessory facilities by themselves or property service firm or other managerial personnel entrusted
by the homeowners. The homeowners shall have the right to make changes with regard to the
property service firm or other managerial personnel employed by the developer.” The amended
regulations on property management did not adjust this stipulation. As data collection for this study
ended in February 2007 while this law came into effect on Oct. 1, 2007, I do not know whether
HOAs can choose self-organized management types in practice. The usefulness of this article needs
to be explored in future studies.

96
HOAs cannot choose self-organized property management. They also do not
have the rights to hire multiple professional service enterprises to deliver
different types of services, such as cleaning, greening and safeguarding.
Regulations stipulate that property management firms can contract out some
services to other professional service enterprises but do not grant HOAs the right
to contract specific services to organizations other than property management
firms. As a result, HOAs only can select one property management firm to
deliver all services. They cannot select multiple service enterprises to provide
specific types of services regardless of whether or not they are satisfied with the
services delivered by the property management firms. In interviews with HOA
leaders, 15 interviewees expressed their wish to hire multiple, specific service
enterprises, but only one HOA successfully signed a three-party contract among
the HOA, the property management firm and a property cleaning service firm in
2006. So far, this is still the only HOA that selected a specific service enterprise
on its own in Beijing (Zhou, Nov. 30, 2007).

z Second, regulations grant substantial power to property management firms to
manage neighborhoods. The 2003 Regulation requires developers to select
preliminary property management firms to manage neighborhoods before the
establishment of HOAs. Therefore, preliminary management firms not only
deliver services to neighborhoods but also control the use of common properties

97
and accessory facilities. As they can earn significant profits from the use of
common properties, developers and preliminary property management firms
tend not to disclose information about the ownership of common properties.
Homeowners must accept the mandatory and monopolistic services and
management provided by property service firms because no legal rules define
the co-ownership of common properties and stipulate legal procedures or actions
HOAs can take when their property rights are violated. Management by
preliminary property management firms occurs before the establishment of
HOAs. HOAs can change or select other management firms after establishment,
but this requires approval through a simple majority rule. If the HOA cannot
obtain support from at least half of the homeowners, the current management
firm cannot be changed. As analyzed above, changing management firms is
difficult because of the high voting requirements. Among the sampled HOAs in
this study, only 22 HOAs (24 percent) changed the preliminary management
firms and selected other property management firms.

Overall, because of their control-oriented nature, regulations do not leave much room
for neighborhoods to specify their own management. Central governmental
regulations stipulate many detailed rules to control HOA operations, such as
meetings and elections, which should be specified in HOA constitutions/bylaws.
Regulations even provide standard samples of HOA constitutions/bylaws to these

98
self-governing organizations. In practice, samples suggested by governments have
become mandatory for HOAs. As a result, HOA constitutions/bylaws adapted from
governmental samples do not fit the specific conditions of neighborhoods and cannot
play the needed role in governing the neighborhood.

While specifying many detailed rules controlling HOA operations, regulations only
declare HOA rights in principle with no specifics guaranteeing the operationalization
of these rights:

z First, current regulations do not specify detailed rules on implementing
homeowner and association rights and obligations. For instance, Article 6 of the
2003 Regulation prescribes that homeowners have the right to know and
supervise the use of common spaces and facilities, the performance of the
property management service and use of the special maintenance funds;
however, without detailed rules to ensure implementation, these rights hardly go
beyond paper. Similarly, Article 11 of the 2003 Regulation empowers HOAs to
decide and monitor the use of special maintenance funds. However, without
detailed guidelines to ensure the exercise of these rights, the District Housing
Administrative Departments still control most HOA special maintenance funds.

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z Second, some regulatory rules also make enforcing and maintaining an efficient
organizational life difficult for HOAs. For example, the 2003 Regulation
requires a high participation rate for HOA general meetings—two-thirds or one-
half of total members must vote at general meetings. This regulation resembles
those found in a study of homeowners’ corporations in Hong Kong (Yip &
Forrest, 2002). This high percentage requirement intends to prevent majority
autocratic rule but has become an obstacle for HOA operations and actions. As
regulations do not grant HOA Committees with specific decision-making
powers, many neighborhood issues must be discussed at general membership
meetings. In practice, initiating and holding general membership meetings is
difficult. Even if every stage proceeds smoothly, organizing a general meeting
requires at least two or three months (Qin, 2007). Moreover, the heterogeneous
composition of residential neighborhoods makes attracting at least one-half of
the total homeowners to attend and vote at general membership meetings
difficult for HOAs. As a result, HOA Committees have difficulties responding
to urgent issues or taking actions to resolve neighborhood issues.

z Third, the language of some regulatory rules is vague and hard to enforce. Some
articles of the 2003 Regulation use the word “recommend” (e.g., Article 3) or
“encourage” (e.g., Article 4). These soft words make enforcing rules unclear.
For example, Article 24 of the 2003 Regulation stipulates that “the state

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advocates that developers select a property management firm through a bid
process according to the principle of separation of real estate development and
property management.” By interpreting “advocates,” developers can choose
whether or not to follow the principle of separation. In practice, many
developers appointed a subsidiary to provide neighborhood services.

Overall, as the highest authority to govern property management activities, the 2003
Regulation provides more principles than enforceable rules and uses more vague
rather than clear words. Due to the ambiguity of current regulations, lawsuits arising
from property management conflicts increased greatly after 2003. For example, the
Chaoyang District Court of Beijing reported that the disputes regarding property
management, ownership and related rights dramatically increased by 400 percent
every year from Jan. 1, 2003, to June 30, 2006 (Qin, 2007). The incompleteness and
ambiguity of regulations create difficulties for Chinese courts to mediate conflicts.
According to a presiding judge in the Guangzhou city court, “Regulations on
Property Management have many limitations and are hard to interpret. When we
deal with lawsuits related to property management conflicts, we can only refer to
some articles in Civil Law to make a decision” (cited from Jiang, Jan. 12, 2007).

Fourth, Table 3.1 shows that the lack of property laws ranks in fourth place (with the
mean importance at 2.40). The protection of private property rights, as a principle,

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was written in the Chinese Constitution Amendment. However, no specific law on
property rights defined common properties in newly developed neighborhoods until
October 2007. As a result, conflicts over undefined common properties are common
and cannot be resolved easily. Some interviewees noted,
We did not take actions to resolve some severe problems related to
common properties because we know that any actions would be in
vain. We are waiting for the Property Rights Law. Once it is issued,
we will immediately take actions to get back our common assets, like
parking lots and underground space.
15

In a nutshell, Chinese HOAs grow in an unfavorable institutional environment. The
interests of organizations they need to work with—such as developers, property
management firms and local governments—conflict with HOA interests. Therefore,
these organizations have incentives to prevent HOAs from developing and operating
as homeowners would desire. The external institutions, especially regulations
governing Chinese HOAs, are incomplete and ambiguous. In practice, regulations
are enforced in a way unfavorable to HOAs, which significantly has impaired the
HOAs’ social functions in solving neighborhood problems.

15
Future research warrants the exploration of the usefulness of the Property Rights Law and its impact
on HOA operations and actions.

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CHAPTER 4 DETERMINANTS OF CHINESE
HOMEOWNER ASSOCIATIONS’ PROBLEM-SOLVING
EFFECTIVENESS

The development of Chinese HOAs is uneven. Some HOAs have taken various
legal, political and social actions to deal with different types of neighborhood
problems, such as engaging in demonstrations against the government and
developers, initiating petitions, advocating for legislation, building networks among
their leaders, and litigating against government, developers and property
management firms. However, many others have not been active at all. Even active
HOAs vary in their effectiveness in solving neighborhood problems. Some have
addressed neighborhood problems successfully, but others have demonstrated little
effectiveness.

The goal of this chapter is to investigate contextual and organizational factors that
affect the effectiveness of Chinese HOAs in solving neighborhood issues, and how
the impacts of those factors vary across different types of neighborhood issues.
The remainder of this chapter is divided into five sections. The first section briefly
describes different types of neighborhood issues urban residents are facing. The
second section develops a theoretical framework for analyzing factors that influence
the effectiveness of HOAs in solving neighborhood problems and proposes a series

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of research hypotheses. Next, the third section discusses research methods and
measurement. The fourth section presents the empirical findings. The final section
concludes with a discussion of the major findings.

4.1 Types of Neighborhood Issues
In the United States, the main goal of neighborhood organizations is to maintain and
improve common property assets, and protect common economic and social interests
(Dilger, 1992; Hyatt, 1975; Liebmann, 2000; Logan & Rabrenovic, 1990; McKenzie,
1994; Nelson, 2006; Oropesa, 1989a). Solving common neighborhood problems is
regarded as a principal function of HOAs (Florin & Wandersman, 1990 ; Mesch &
Schwirian, 1996). Different types of neighborhood issues usually pose different
challenges to the neighborhood associations and their problem-solving effectiveness
(Guest & Oropesa, 1984; Logan & Rabrenovic, 1990; Oropesa, 1989a; Schwirian &
Mesch, 1993). Therefore, it is important to categorize neighborhood problems in
urban China, and to find out what types of problems urban neighborhoods commonly
confront and what problems are the main concerns of Chinese HOAs.
Unfortunately, few studies have examined these questions systematically.

Most research has classified neighborhood problems faced by private neighborhood
associations according to the nature of the issues. Lee, Oropesa and Kanan (1994)
divide neighborhood issues into political and social issues: political issues concern

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land use and public services, and social issues concern entertainment and sense of
community. Thomas (1986) classifies the issues faced by neighborhood
organizations into protection of residence status quo, service delivery problems and
neighborhood redevelopment. In his study on HOAs in Los Angeles, Purcell (1998)
finds that the main issues pertain to land development, government, quality of life,
crime and safety, landscape, the Los Angeles Unified School District, the
environment and property values. Guest and Oropesa (1984) summarize six types of
neighborhood issues: neighborhood residents’ characteristics; problems of personal
safety, congestion and noise; general physical characteristics of the neighborhood
environment; land-use change and zoning; housing characteristics; and services and
facilities in the neighborhood.

To understand the major problems faced by Chinese neighborhoods, I asked
interviewees to rate the degree to which the listed 20 specific neighborhood
problems have affected their neighborhood life in the past two years. That is, the
respondents were asked to rate each of the listed issues as a serious problem, a
problem but not serious or not a problem at all. The 20 problems were selected
based on literature on conflict solutions and private neighborhood associations,
newspaper reports and interviews with key informants. The 20 problems were
categorized into seven types based on the nature of the issues. Those issues are
related to: 1) public service delivery, including transportation, schools, hospitals and

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public safety; 2) land development; 3) common private properties; 4) construction
quality and deeds; 5) property services, such as neighborhood cleanup, safeguards
and heating supplies; 6) management fees and common income; and 7) homeowners’
nuisances, such as neighborhood sentiments, noise and occupancy of common areas
(see Table 4.1).

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Table 4.1 Neighborhood Issues Faced by Urban Neighborhoods in China

Issue Types Issue Themes Specific Issues
1. Inconvenience to schools and hospitals
2. Inconvenience to public transportation and shopping
Public service
delivery
3. Lack of local police (e.g. public safety problems near the neighborhood)
Government
related
Land development
4. Neighborhood environment deteriorated by the new land development
5. Breaching agreement, such as the shrinking of green space
6. Changing development plan (e.g., the planned kindergarten was replaced by shopping center)
7. Lack of common facilities (e.g. disappearance of heating facilities, etc.)
Common private
properties
8. Common property rights
9. Construction defects (e.g. roof leaking)
Developer
related
Construction
quality and deeds
10. Deed problems (e.g. the shrinking of the unit areas, deeds process delayed)
11. Provision of water, heating and electricity services
12. Neighborhood cleanup and beautification
13. Neighborhood security service
14. Neighborhood transportation and parking management
Property services
15. Other services (e.g. road maintenance)
16. Property management fee
Property
management
firm related
Fees and common
income
17. Occupying common income, such as advertisement and common area rents
18. Individual homeowner occupation of common areas, such as stairways
19. Neighborhood sentiments
Homeowner
related
Disputes among
homeowners
20. Using residential apartments to operate small businesses

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Table 4.2 in the next page shows that the most serious problems are issues related to
common properties and property management services. Eighty-four percent of
HOAs reported that issues related to common properties affected their neighborhood
life seriously, and 72 percent reported issues related to property management
services. Problems of construction defects and neighbors’ problems tied for the third
most serious neighborhood issue perceived by respondents (55% of responses). The
fifth most serious issue was related to land development (52% of the responses). The
sixth most serious issue concerned management fees and common revenue. The
category that was reported as least serious (30% of the responses) consists of
problems involving public service delivery by government.

The survey also demonstrated that almost all the neighborhoods had problems with
property management services (97% of the responses). Common property problems
and intra-neighborhood homeowners’ disputes also are among the most common
issues faced by neighborhoods (92% of the responses). However, public service-
related problems, such as school, hospital and transportation issues are not very
serious compared to other kinds of problems. Nearly half of the respondents (47%)
mentioned that their neighborhoods did not have public service delivery-related
problems in the past two years.

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Table 4.2 The Seriousness of Neighborhood Problems Facing Chinese HOAs

(N=92)
A problem
Issue Types Issue Themes
Not a
Problem
Not
Serious Serious
Public service delivery 47% 23% 30%
Government related Land development 19% 29% 52%
Common private properties 8% 9% 83%
Developer related Construction quality/deeds 13% 32% 55%
Property services 3% 25% 72%
Management firm related Management fees and common revenue 24% 32% 45%
Homeowner related Homeowners’ problems 8% 37% 55%

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I further asked the respondents whether HOAs took any actions to resolve problems
facing their neighborhoods in the past two years. Surprisingly, even though 92
percent of respondents perceived homeowners’ internal disputes as a very serious
problem to the neighborhoods, only a quarter of HOAs made an effort to address
them.

This finding demonstrates the ambiguous status accorded to HOAs. First, the role of
HOAs is unclear. The 2003 Regulation asserts that one of the HOAs’
responsibilities is requiring members to follow Communal Rules. However, such
responsibility conflicts with the RCs, which traditionally resolve disputes among
neighbors. As no guidelines exist to clarify the responsibilities of these two
neighborhood power centers, many HOA leaders do not believe it is their
responsibility to arbitrate disputes among homeowners. For example, when an HOA
Committee director was asked why he did not take action on addressing
homeowners’ nuisance behaviors, he responded:
It is the Residents’ Committee’s rather than our responsibility to deal
with the conflicts between neighbors. We only are empowered to
address the problems involved with properties rather than with
residents.

Second, HOAs lack powers to regulate their members. Some HOA leaders believe
they have a responsibility to regulate their members in obeying Homeowners’
Communal Rules, but HOA Committees have no power to do so. Some homeowners

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breach Communal Rules by building new storage spaces in common areas, which
normally leads to neighborhood conflict. However, HOA Committees cannot punish
individual owners for their transgressions except through legal suits. Therefore,
many HOA Committees do not take action to resolve such problems. As one HOA
leader said:
We have tried to ask one homeowner to tear down his storage space
built up in the common yard many times. He did not respond to us at
all. One time, he just shouted at me and other two committee
members, “Do not bother me again! If you dare, you can go to court
to sue me!” But nobody wants to take his neighbors to the court,
right?

Third, with limited time, resources and energy, solving homeowners’ disputes is not
the HOAs’ first priority. Facing a variety of problems, HOAs usually focus their
time and energy on issues involving property management services and economic
interests. Some HOA leaders said that they would consider regulating homeowner’s
behaviors after they resolve problems related to property management services and
developers. One interviewee noted:
In the first place, we need to gain homeowners’ support to fight with
our management firm, a branch department of the developer. We are
now trying to fire this management firm so that we can get back the
common properties that are occupied by this firm. We should keep
homeowners’ unity. And we do not have energy to address all the
problems.

The survey demonstrated that HOAs’ efforts mainly focused on problems related to
property management services (79% of HOAs took action to resolve service delivery

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issues, and 69% took action to deal with management fees/common revenue issues).
Many HOAs also took action in solving developer-related issues. Among them, 67
percent have attempted to resolve common properties issues, and 48% of them
address construction quality and deeds problems with developers on behalf of their
members. The statistics are presented in Table 4.3.

Overall, almost all the urban neighborhoods in China face multiple, serious
problems. The homeowners’ internal disputes are a serious challenge to most
neighborhoods, yet few HOAs take action to address them. Public service and land
development issues are not perceived as serious compared to other issues. The two
types of issues that Chinese HOAs generally both perceive to be serious and take
action to address involve developers and property management firms.

Based on this observation, this chapter focuses on how Chinese HOAs resolve these
two types of issues. As demonstrated in Table 4.2, developer-related issues pertain
to common property rights and housing construction quality. For example,
developers do not provide amenities (fitness centers, green space, etc.) as promised
when selling the apartments, or the area of the apartment unit is smaller than the
deed states. Developers are the major outside force HOAs need to deal with in
attempting to resolve these types of issues.

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Table 4.3 Neighborhood Problems Addressed by HOAs

(N=92)
Issue Types Issue Themes
Take
Action
No
Action
Total
Number
Public service delivery 27% 73% 49
Government related Land development 39% 61% 75
Common private properties 67% 33% 85
Developer related Construction quality/deeds 48% 53% 80
Property services 79% 21% 89
Management firm related Management fees and common revenue 69% 31% 70
Homeowner related Homeowners’ problems 25% 75% 85

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Property management firm related issues include unreasonably high management
fees, low quality services and the like. To resolve these problems, HOAs need to
work with management firms.

4.2 Theoretical Framework
This section develops a theoretical framework for analyzing the determinants of
effectiveness and proposes a series of research hypotheses.

To understand the factors that affect the effectiveness of private neighborhood
associations, there is a need to analyze both internal organizational characteristics
and contextual neighborhood characteristics (Galaskiewicz & Bielefeld, 1998;
Huckfeldt, 1979; Knoke & Wood, 1981). The basis of this proposed empirical study
comes from two theoretical streams of literature: 1) Urban sociology, which
emphasizes the impact of neighborhood characteristics on the abilities of
neighborhood associations to resolve neighborhood problems, and 2) Organizational
theories, including resource dependency, resource-based and leadership theories.
Organizational theories emphasize the role of leadership and resource availability in
determining organizational effectiveness in solving neighborhood problems. The
integration of these theories can provide a useful framework for systematically
examining the neighborhood and organizational factors that affect the effectiveness
of HOAs in solving neighborhood problems.

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4.2.1 Contextual Factors
Neighborhood characteristics can facilitate or limit neighborhood associations’
capacities to resolve community problems (Austin, 1991; Hillman, 1968; Huckfeldt,
1979; Hunter & Staggenborg, 1986; Lloyd & Wilkinson, 1985; Sampson, Morenoff,
& Gannon-Rowley, 2002). A large body of literature has examined the impact of
neighborhood contextual factors on various organizational social actions, such as
organizations’ participation in political activity (Huckfeldt, 1979) and organizational
capabilities in intervening in zoning decision-making processes (Hutcheson &
Prather, 1988). Neighborhood size, socioeconomic status, age and the number of
neighborhood issues are the contextual factors considered in this chapter.

4.2.1.1 Neighborhood Size
Collective action theory (Olson, 1965) suggests that the larger a group is, the less
likely the group achieves successful formation and sustained operation. The reason
is that the free rider problem is more severe for larger groups, which will dampen
group members’ incentives to contribute efforts to achieve collective goals. In his
analysis of collective choice problems, Stevens (1993) also highlighted the collective
inaction issue in homeowners associations of large size. In addition, residents in a
large neighborhood have difficulty identifying each other. The lack of identification
also weakens members’ incentives to contribute to organizational efforts (Haeberle,
1989). Some empirical studies (Bengtsson, 1998; Chen & Webster, 2005; Lai &

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Chan, 2004) find a negative relationship between the size of neighborhoods and
success of collective action in solving neighborhood issues. In China, it is critical to
overcome the obstacles for collective action because the number of residents in a
neighborhood is normally large compared to the United States
16
. Most newly
developed neighborhoods are composed of high-rise towers and high-density flatted
buildings, HOAs face challenges in effectively communicating with homeowners
and organizing collective action. Based on these theoretical and empirical studies, I
hypothesize that compared to smaller communities, neighborhood organizations in
larger communities might have more difficulties in organizing members to take
collective action to carry out social functions. Therefore,
Hypotheses 1: HOA effectiveness in solving neighborhood problems will
vary inversely with neighborhood size.

4.2.1.2 Neighborhood Socioeconomic Status

Urban political economy theorists (Logan & Molotch, 1987; Rich, 1980 ) emphasize
the impact of neighborhood socioeconomic status (SES) on social actions that
neighborhood associations take for solving common problems. SES has been a
strong determinant of individual participation in neighborhood associations (Verba,

16
For example, the average size of HOAs in California was 43 units by 1989 (Barton & Silverman,
1989:36). A more recent study shows that the average association has approximately 150 units (Bell,
1998:243).

116
Schlozman, & Brady, 1995). This finding also holds at the aggregate level (Mesch,
1996). Neighborhoods with higher median-household income levels are more likely
to organize to resolve common problems than neighborhoods with lower incomes
(Henig, 1982; Oropesa, 1989b; Sampson et al., 2002; Thomas, 1986). Furthermore,
the residents in higher SES neighborhoods are more likely to have higher levels of
social skills, education, political efficacy and access to information, and therefore are
more capable of solving neighborhood issues. Therefore,
Hypotheses 2: HOA effectiveness in solving neighborhood problems will
vary positively with neighborhood socio-economic status.

4.2.1.3 Neighborhood Age
Neighborhood age, usually measured by the years after most houses in a given
community are built, has been argued to influence resident behavior (Oliver, 2001,
Williamson, 2002). In his empirical study, Williamson (2002) finds that residents of
older neighborhoods are more likely to participate in local political affairs and
community activities than those in younger neighborhoods. It is because residents of
older neighborhoods have a greater sense of community compared to residents of
younger neighborhoods. Moreover, older neighborhoods usually have a longer
history of activism and problem-solving experience than younger neighborhoods.
Therefore,

117
Hypothesis 3: HOA effectiveness in solving neighborhood problems will
vary positively with neighborhood age.

4.2.1.4 The Number of Neighborhood Issues
Another contextual factor that deserves examination is the number of neighborhood
issues Chinese HOAs face, even though this factor is seldom explored in the
literature. Some studies have found that the nature of the issue (Cox, 1983) and its
salience (Rabrenovic, 1996; Weaver, 1991) will have an impact on the problem-
solving results. In the case of China, urban neighborhoods vary greatly in the
number of neighborhood problems they face. The number depends on whether
developers adhere to government regulations. If developers are international or large
state-owned developing enterprises who value their societal reputation or are subject
to more governmental regulations, then the quality of construction is good with
relatively few developer inherited problems. However, if developers are too profit-
driven and do not follow governmental regulations, residents of the neighborhoods
they develop can encounter numerous problems, including but not limited to, the
lack of heating facilities, the occupation of common areas by developers for
commercial activities and the sale of neighborhood parking spaces to others. Solving
these problems demands reallocation of significant economic benefits or costs, and
normally involves great conflict. Therefore, HOAs in neighborhoods with fewer
neighborhood problems may demonstrate higher effectiveness in solving problems

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because they can focus their energy and resources on resolving these problems.
Therefore,
Hypothesis 4: HOA effectiveness in solving neighborhood problems will
vary inversely with the number of neighborhood problems.

4.2.2 Organizational Factors
Regarding organizational characteristics that influence HOA problem-solving
capabilities, this study focuses on two dimensions: leadership styles and
organizational resources. Resource availability is a vital and fundamental factor for
the success of any organization, particularly for voluntary neighborhood associations
that often operate with limited resources. Leadership also is vital for the success of
neighborhood organizations (Garreau, 1987; Rich, 1980 ).

4.2.2.1 Leadership Styles
It is widely agreed upon that leadership is an important factor in determining the
effectiveness of neighborhood organizations (Crenson, 1983; Rich, 1980 ; Schwirian
& Mesch, 1993). Leadership matters not only because of leaders’ organizing skills
but also because of the ideological component that leadership brings to the
organization. Ideologies present “ways of looking at life, modes of orienting toward
the environment, appropriate styles of working together, and types of approaches for
confronting external action systems” (Schwirian and Mesch, 1993: 97). Ideologies

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of leadership determine the strategies, processes and outcomes of neighborhood
collective action. For example, in his study of how different groups in a
neighborhood respond to a highway development project, Heskin (1991) finds that
the leaders’ ideologies change the processes of collective action and thus the result.

Yates’ study (1973) provides a good framework for studying neighborhood
leadership (see Table 4.4). Based on two dimensions—sense of purpose and
approaches of dealing with neighborhood problems—Yates (1973) classifies
neighborhood leaders into four types. On the dimension of sense of purpose,
neighborhood organization leaders either orient their main concerns toward resolving
specific neighborhood problems or toward gaining self-governance power for
neighborhood residents. On the dimension of approaches of dealing with
neighborhood problems, neighborhood organization leaders either take a strategy
that focuses on changing governmental attitudes or one that focuses on improving
the organizations’ self-governing capacity and accessibility to resources. Based on
these two dimensions, Yates divides neighborhood leadership styles into four types:
community builders, entrepreneurs, ombudsmen and protestors. According to Yates,
“community builders” are concerned with self-governing power and are oriented
toward neighborhood action; “entrepreneurs” care about quality of life and are
oriented toward neighborhood action; “ombudsmen” orient themselves toward
quality of life and government action; and “protestors” seek power for the

120
neighborhood and are oriented toward government action (Yates, 1973). His study
demonstrates that “entrepreneurs” and “ombudsman” are the most common and
effective forms of leadership in neighborhood organizations in the United States.

Table 4.4 Types of leadership Styles

Sense of purpose

Strategy Service-Oriented Power-Oriented

Local Government-
Oriented

Neighborhood
Capacity-Oriented

Whether U.S. experiences apply in China requires further investigation. In China,
local governments have limited power and autonomy in rule setting. Their roles
pertain more to enforcing rules and regulations. In addition, because their
performance is not evaluated by the public, HOAs have little leverage to change
local governments’ general attitudes. Therefore, if organization leaders direct their
energies to reforming or changing local government, problems might not be resolved
at all, at least not in a short period. In contrast, if they work at the neighborhood
level to develop neighborhood capacities and resources, organization leaders might

Ombudsman

Protestor

Entrepreneur

Community builder

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be able to mobilize neighborhood collective action and internal resources to resolve
some issues. Therefore,
Hypothesis 5: HOA effectiveness in solving neighborhood problems will
vary with leadership styles. The organizations with leaders who
“entrepreneur” and “community builder” styles of leadership are more
effective in solving neighborhood problems than those with “ombudsman”
and “protestor” styles of leadership.

4.2.2.2 Resources

Resource dependency theory (Pfeffer & Salancik, 1978) argues that organizations are
greatly influenced by the environment in which they carry out their functions. The
underlying idea is that organizations are not internally self-sufficient, and they need
resources from outside parties. However, when they depend heavily upon resources
provided by outside parties, organizations usually become less able to resist the
pressures that come with these resources and lose their autonomy (Oliver, 1991).
Therefore, the ability of an organization to reduce its dependence on external
resources is critical for achieving its self-set goals. Resource-based theory (Barney,
1991; Bryson, Ackerman, & Eden, 2007; Peteraf, 1993; Wernerfelt, 1984) goes
beyond the focus of external resources and emphasizes the creation and mobilization
of internal resources to maximize organizational autonomy and its overall
effectiveness. The internal resources could be “specific physical,” “organizational”

122
or “human” assets (Teece, Pisano & Shuen, 1997: 514), and should be rare, valuable,
non-substitutable and difficult to imitate. In the case of HOAs in China, the
effectiveness of HOAs in solving neighborhood problems depends on the availability
of a variety of resources. These resources not only increase the HOAs’ capability to
take action but also decrease their dependence on external resources. More
specifically, the following resources should be critical for HOA success in solving
neighborhood problems.

Material resources. Money, office and meeting space are important material
resources. The lack of these resources places HOAs’ daily operations in jeopardy let
alone their ability to resolve neighborhood problems. In the United States,
Homeowner associations can levy fees and dues from members(McKenzie, 1994;
Nelson, 2005). They have fixed funding from the dues for organizations’ daily
operation. In China, homeowner committees have no authority to collect
management fees from homeowners. In the absence of clear property rights, the
majority of HOAs cannot share any profits from developing common properties with
developers or management firms. To address neighborhood problems, HOAs need
to maintain their daily functions and take legal or political action, all of which
require significant material resources. In China, HOA funds usually come from
individual homeowner donations. Some HOAs receive a portion of common profits
from management firms through negotiation.

123

The amount of money that HOAs nominally have not only is important but also the
extent to which they can spend the money at their free will. For most HOAs, their
funds are managed by their property management firms. One of the reasons why
Chinese HOAs do not control their own funds is because they have no clear legal
identity. Under current regulations, HOAs are neither social organizations nor
business organizations because they cannot register with the local Bureau of Civil
Affairs—the only government agency managing nongovernmental organizations—or
with the local Bureau of Industry and Business Administration, which manages
business organizations. Without a legal identity, HOAs cannot open a bank account
under the name of “homeowner committees”. Given this, some HOA Committees
entrust one of their members to open a personal bank account for HOA funds to
allow full discretion over the use of their money. Yet, many HOAs have to keep
their funds in their property management firms’ account. In some cases, the property
management firm establishes a separate account for the HOA Committee in the
firm’s financial department. In others, no separate account exists. When they need
money, HOAs must obtain approval from their management firms, which arguably
will affect HOAs’ ability to resolve neighborhood problems. Therefore, the ability
of HOAs to mobilize and control material resources is an important determinant of
their problem-solving effectiveness. That is,

124
Hypothesis 6a: HOA effectiveness in solving neighborhood problems will
vary positively with the degree of self-control of material resources.

Human resources. The commitment of the HOA leaders and active members is
considered important to neighborhood organizations’ problem-solving capabilities
(Knoke & Wood, 1981; Oliver, 1984). In voluntary organizations, leaders who
devote more personal leisure time or frequently communicate with each other for
organizational affairs are considered more committed (Knoke & Wood, 1981; Oliver,
1984; Robertson & Tang, 1995). They are core human resources to voluntary
neighborhood organizations. In addition, active general members are sources of help
in carrying out organizational tasks (such as signing petition letters, sending out
materials and collecting votes). The organizations with a larger number of active
members were viewed as having more human resources than organizations with a
smaller number of active members. Therefore,
Hypothesis 6b: HOA effectiveness in solving neighborhood problems will
vary positively with the number of committed members.

Social resources. The literature on neighborhood organizations suggests that social
resources also are an important factor for organizational effectiveness. Social
resources refer to the extent to which the HOA interacts with other organizations
through which information, experiences and resources are exchanged, and assistance

125
is rendered. Compared to developers and property management firms, HOAs lack
knowledge of the specificities of contracts and the management of neighborhood
common properties. As a result, HOAs have difficulty in monitoring the quality of
construction and services, and keeping track of profits from commercializing
neighborhood common properties. Moreover, HOAs normally have limited
experience in self-governance or in conflict resolution with outside parties
(Alexander, 1989; Barton & Silverman, 1987; Foldvary, 1994), and limited
understanding of housing policies and the decision processes behind those policies
(Chen, 2006; Chen, Wang, Lei, & Zhao, 2007). Because of this, Chinese HOAs
cannot effectively target and resolve neighborhood problems. Connections with
research institutions, business firms (e.g. Sohu housing focus Web site) and other
neighborhood institutions could help HOAs overcome those difficulties. In China,
some research, business and neighborhood institutions actively hold workshops,
seminars, conferences and forums for HOA leadership training, the exchange of
problem-solving experience, and face-to-face communication opportunities with
government officials, developers and property managers. Such workshops provide a
variety of communication channels for HOAs. By utilizing such social support,
HOAs might increase their ability to resolve neighborhood problems. Therefore,
Hypothesis 6c: HOA effectiveness in solving neighborhood problems will
vary positively with the number of workshops and forums that HOA leaders
attend.

126

Political resources. Governmental supportive attitude is an important political
resource. The support from government helps organizations obtain legitimacy,
autonomy and authority (Chen, Wang, Zou, & Yang, 2005; Gui, 2001). According
to institutional theorists (Edelman, 1992; Meyer & Rowan, 1977), external
institutions can confer organizations with legitimacy, which in turn will have an
impact on organization outcomes. Without appropriate legitimacy, organizations’
problem-solving capabilities are constrained. In the political context of China, a
governmentally supportive attitude toward nongovernmental organizations is a vital
political resource. With governmental support, HOAs have more leverage/power to
negotiate with developers and property management firms. I hypothesize,
Hypothesis 6d: HOA effectiveness in solving neighborhood problems will
vary positively with local government’s supportive attitudes.

4.3 Methods
The analysis combines quantitative and qualitative methods. Quantitative methods
are used to explore the roles of neighborhood characteristics (contextual factors),
leadership style (organizational factors) and different types of resources available to
HOAs (organizational factors) to determine the effectiveness of HOAs in solving
neighborhood problems. The interview data complement the quantitative analysis.

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4.3.1 Variables and Measures
Regression analyses were performed to examine how contextual and organizational
factors affect the HOAs’ problem-solving effectiveness. The dependent variables
include the effectiveness in solving problems inherited from developers and
problems related to property management firms. The independent variables consist
of the contextual factors already discussed, including neighborhood characteristics
and organizational factors (leadership styles and the amount and types of resources
available to HOAs). The rest of this section details how these dependent and
independent variables are measured.

4.3.1.1 Dependent Variables
The effectiveness of HOAs in solving neighborhood problems is measured by the
extent HOAs took action to address problems and the degree of success with which
they resolved the problems. I focus on two types of problems—problems related to
developers and problems related to management firms—for three reasons. First,
some types of problems are easier to resolve than others, therefore, an overall level
of effectiveness may obscure interesting differences in problem solving involving
different outside parties. Second, when it comes to different types of problems,
various contextual and organizational factors may have different impacts. Finally, as
mentioned earlier, these two types of problems are selected because they are the

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most common challenges to HOAs, and most HOAs have taken action to resolve
these problems.

I constructed the effectiveness indexes based on responses to three consecutive
questions in the survey instrument: 1) “For each of the following 20 problems,
please indicate the extent to which it has impacted your neighborhood in the past two
years? Would you say it is serious, not serious or not a problem at all?”; 2) “In the
past two years, what problems has your committee tried to deal with on behalf of
your members?”; and 3) “How would you rate the degree to which the problems are
resolved as the result of your actions? Would you say it is: (0) not resolved at all; (1)
partially resolved; (2) mainly resolved; (3) completely resolved? ”

Below I use the “issues related to property management firms” as an example to
illustrate how I constructed the index measuring HOA effectiveness.

First, I identified the relevant problems upon which the indexes are constructed.
Under the category of “issues involved with property management firms,” I listed
seven specific questions (see Table 4.1) and asked the interviewees if they have
faced those questions in the past two years. Because it makes no sense to investigate
HOAs’ problem-solving effectiveness if they did not have any of those seven
problems, I excluded from my analyses the HOAs that indicated that they did not

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have any of the seven problems regarding property management services. There is
only one HOA leader who said that they had no property management-related
problems in their neighborhood.

Second, for those HOAs that have indicated that they had faced one or more
management firm-related problems, I looked at three dimensions of each of the
problems: 1) The perceived seriousness of the problem: the degree to which the
problem impacted the neighborhood; 2) Actions: whether the HOAs had taken action
to resolve the problem; and 3) Result: the extent to which the problem had been
resolved.

If the problem was perceived to affect the neighborhood seriously, I gave the
problem a score of 2; if not serious, the problem received a score of 1. If the issue
was not a problem at all, I deleted it when I constructed the final score.

If the HOA did not take action to resolve the problem they identified, I gave the
HOA a score of -1. If the HOA took action to resolve the problem, I gave it a score
of 1. For HOAs that took action but did not resolve the problem at all, I gave a score
of 0. For those that partially, mainly and completely resolved the problem, I gave a
score of 1, 2 and 3 respectively.

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The effectiveness index for solving each of the problems is attained by either
multiplying the seriousness of the problem by the action score if the HOA did not
take action, or by multiplying the seriousness of the problem by the action score and
then by the result score if the HOA took action. For example, if a HOA leader
indicated that management fee was a serious problem, but the HOA did not take any
action to resolve it, the HOA received a score of -2 for this specific problem. And if
this HOA leader indicated neighborhood beautification and cleanup service seriously
impacted the quality of life in their neighborhood, and the HOA took action to
resolve this problem completely, the HOA received a score of 6. The effectiveness
index for each of the problems ranges from -2 to 6.

Finally, I constructed an index for HOA effectiveness in solving property
management firm-related problems by taking the average of its scores on all the
seven problems involved with property management firms. Therefore, for the HOA
of which I made an example, its effectiveness index for solving property
management firm-related issues will be -2 plus 6 and then divided by 2, which is 2.
Two effectiveness indexes were constructed for all HOAs in the sample. One is for
the effectiveness of solving developer-related problems, which ranges from the
lowest score of -2 to the highest score of 3.33 with an average of -0.31. Another
index is for the effectiveness in solving management firm-related problems. The

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index ranges from the lowest score of -2 to the highest score of 4.8 with an average
of 0.65 (see Table 4.5).

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Table 4.5 Descriptive Statistics for Variables in the Multiple Regression Models

Variable Name Mean Median Min. Max. SD
Dependent Variable:
Effectiveness in solving developer-
related problems
-.31

-.45 -2 3.33 1.11

Effectiveness in solving PM firm-
related problems
.65

.5 -2 4.8 1.58

Independent Variables:
Neighborhood Characteristics
Neighborhood size (unit: household)
984.90

810 40 3728 700.80

Neighborhood age (unit: month) 69.61 62.5 20 302 36.89
Neighborhood SES- low (dummy,
1=yes)
.33

0 0 1 .47

Neighborhood SES- middle (dummy,
1=yes)
.34

0 0 1 .48

Neighborhood SES- upper (dummy,
1=yes)
.33

0 0 1 .47

Number of neighborhood issues 8.51 9 1 12 2.83
Organizational Characteristics
Material resources
- HOA funds (unit: RMB10,000) 6.09 .88 0 100 16.44
- Money control (dummy, 1=self-
controlled)
.32 0 0 1 .47
- Meeting space (dummy, 1=has space) .55 1 0 1 .50
Human resources
- HOA Committee members’ time
devotion (unit: hours/week)
6.76 4 .75 48 9.05
- HOA Committee members’
communication frequency
5.89 4 .25 30 6.63
- Number of active members 44.86 20 0 500 77.41
Political resources
- Governmental attitude (dummy,
1=supportive)
.43 0 0 1 .50
Social resources
- Number of seminar attendance 5.10 3 0 30 6.60
Leadership styles
- Ombudsmen (dummy, 1=yes) .16 0 0 1 .37
- Community builders (dummy, 1=yes) .31 0 0 1 .47
- Entrepreneurs (dummy, 1=yes) .34 0 0 1 .48
- Protestors (dummy, 1=yes) .19 0 0 1 .39

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4.3.1.2 Independent variables
Independent variables include the contextual factors of the neighborhood—including
the size, socioeconomic status, age and amount of neighborhood issues—and
organizational factors, including the leadership styles and the four types of resources
available to the HOAs. Those independent variables are measured as follows.

Neighborhood size. The size of the neighborhood is measured by the total number of
households. The neighborhoods in my sample vary widely in size. As shown in
Table 4.5, the smallest neighborhood has 40 households, while the largest
neighborhood has 3,728 households. The average neighborhood size is 982
households.

Neighborhood socioeconomic status. The indicator for neighborhood socioeconomic
status (SES) is the average housing price per square meter. With no census data on
individual and family income, education, occupation and other demographic
information, Chinese researchers on community development usually use average
housing price per square meter as the measure for neighborhood SES. In Beijing,
considering that housing prices increased rapidly after 1999, for those neighborhoods
formed before 1999, I classified the neighborhood into relative low SES if the
neighborhood average house price per square meter was less than or equal to
RMB4000/m
2
(1USD=7.6 RMB), middle SES if the average house price fell in the

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range of RMB4000/m
2
to RMB5000/m
2
, and upper class if the average house price
was higher than RMB5000/m
2
. For the neighborhoods formed after 2000, the
neighborhood whose average house price is lower than RMB5000/m
2
is viewed as a
relatively low-SES neighborhood; the average housing price range of RMB5000/m
2

to RMB7000/m
2
is used

for middle SES; and those neighborhoods with an average
house price above RMB7000/m
2
is considered a relatively high-SES neighborhood.
As shown in Table 4.5, my sample includes similar numbers of neighborhoods of
different socioeconomic status. Thirty-three percent of neighborhoods are
considered low SES, 34 percent in the middle SES, and 33 percent in the high SES.

Neighborhood age. As most HOAs emerged in newly developed neighborhoods and
I conducted the interviews in a year, I measure the age of the neighborhood by
counting the number of months between the date the neighborhood was built and the
interview. In the sample, the youngest neighborhood was 20 months, and the oldest
neighborhood was 302 months. The average neighborhood age is approximately 70
months. This information is presented in Table 4.5.

The number of neighborhood issues. The number of neighborhood issues is
measured by the number of developer- and property management firm-related
problems a neighborhood faced in the past two years. The data (see Table 4.5) show

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that the neighborhoods in my sample have had different numbers of problems, which
range from one to 12 with an average of 8.51 problems per neighborhood.

Leadership styles. To examine leadership styles, the respondents were asked to
answer two questions: 1) “Would you say that you are primarily concerned with
service problems, i.e. getting better service delivery, or are you primarily concerned
with self-governing power, i.e. getting more control over neighborhood issues and
increasing citizen participation?”; and 2) “As a matter of strategy, do you feel it
more important to direct your energies to reforming or changing the local
government, or do you feel it is more important to work at the neighborhood level to
develop neighborhood capacities and resources?” According to the discussion in the
second section, leadership style is classified into four types: ombudsmen, protestors,
entrepreneurs and community builders. Three dummy variables for ombudsmen,
entrepreneurs and community builders are included in the regression model. Unlike
Yates’ (1973) study that finds that the common leadership styles in U.S.
neighborhood organizations are entrepreneurs and ombudsmen, Table 4.5 shows that
the common leadership styles in Chinese HOAs are community builders (31% of the
respondents) and entrepreneurs (34% of the respondents).

Material resources. Material resources are measured by whether the organization has
a meeting space, the amount of operating funds and the autonomy of control over the

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money. The interviewees are asked to answer three questions, including: 1) “Does
your organization have a meeting space? Yes or No;” 2) “In the last year, how much
operating funds did your association have?”; and 3) “Who is in charge of the money?
Your homeowner association’s committee or the property management firm?” Table
4.5 shows that more than half (55%) of the HOAs have a meeting space. The
operating funds range from zero to RMB1,000,000. The average fund for the sample
is RMB60,000. However, for those HOAs who have funds, only 32% of them are
able to manage their own money.

Human resources. This type of resource can be measured by the number of active
members who are willing to contribute to organizational efforts and the degree of
commitment of the HOA leaders. To assess the amount of human resources
available to the HOAs, I asked the respondents: “How many ‘active’ members does
your organization have? The ‘active’ refers to the members who have attended HOA
Committee meetings, and contributed time, money, advice and energy to your
organizational activities in the past year.” The number of active members in the
sample ranges from 0 to 400 with an average of 45 and median of 20. The degree of
the leaders’ commitment is measured by the hours committee members spent dealing
with neighborhood affairs per week and the number of times they communicated
with other committee members regarding neighborhood issues per month. In the
interview, I asked the interviewees to estimate the average hours per week that

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committee members devoted to their organizations and the communication frequency
among the members. The average time HOA Committee members spent varies
widely from 0.75 to 48 hours/week. The average hours spent is 6.76, and the median
is 4. The HOA Committee members’ communication frequency ranges from once
per four months (0.25/month) to everyday (30/month) with an average of 5.89 times
per month. This is reported in Table 4.5.

Social resources. This type of resource is evaluated by the number of workshops or
seminars organized by research, business or other neighborhood institutions that
HOA leaders attended. The respondents were asked: “After the establishment of
your association, how many times have you attended the workshops, seminars or
forums held by the research institutions (e.g. Haidian Governance and Community
Institution) or business firms (e.g. Sohu housing focus, Ihome.cn and other Web
sites)?” Some respondents actively participated in all kinds of workshops, while
others did not attend such activities at all. The number of workshops, seminars,
forums and conferences HOA leaders attended ranges from 0 to 30 with an average
of 5.1. This is presented in Table 4.5.

Political resources. Political resources refer to governments’ attitudes toward the
HOAs. It is assessed by the question: “How do you describe the local governments’
attitudes toward your committees when you turn to them for addressing

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neighborhood issues? Would you say they are always supportive, delaying or
quibbling?” Table 4.5 shows that 43% of respondents indicated that governmental
attitudes toward their organizations are supportive, whereas 57% mentioned that
government does not have a supportive attitude toward them.

4.4 Findings and Discussion
Two regression models are used to examine the factors affecting HOA effectiveness
in solving the two types of neighborhood problems—problems related to developers
and problems related to management firms. Table 4.6 (on the next page) shows the
results of the two regression analyses.

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Table 4.6 Multiple Regression Analysis of HOA Problem-Solving
Effectiveness

Effectiveness
Developer-related Issues
Effectiveness
Management Firm-related
Issues
Prob_Number -0.133 -0.007
(1.93)

* (0.09)
Nsize -0.314 0.313
(1.28) (1.06)
SES_middle -0.619 1.06
(1.63) (2.30)**
SES_upper -0.47 1.036
(1.15) (2.07)**
Nage 0.013 -0.005
(2.25)** (0.76)
Money 0.001 0.022
(0.16) (2.19)**
Money_control 0.692 0.059
(2.08)** (0.15)
Meeting_space -0.058 -0.138
(0.18) (0.38)
Committee_
member_time_devotion
0.033 -0.014
(1.75)

* (0.63)
Committee_member_ties 0.011 0.064
(0.45) (2.16)**
Active HOs 0.002 0.006
(0.87) (2.81)***
Gov_attitudes 0.703 0.636
(2.25)** (1.7) *
Seminar_atten_number 0.037 -0.035
(1.5) (1.15)
Community builder -0.532 1.135
(1.21) (2.23)**
Entrepreneur -0.094 1.135
(0.23) (2.36)**
Ombudsman -0.582 0.381
(1.23) (0.67)
Observations 58 62
R-squared 0.5 0.57
Adjusted R-squared 0.30 0.41
Absolute value of t statistics in parentheses.
* significant at 0.1 level; ** significant at 0.05 level; *** significant at 0.01 level.

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4.4.1 Contextual Factors
First, the number of existing neighborhood problems has the expected impact on the
effectiveness of HOAs in solving neighborhood problems. HOAs facing more
neighborhood problems are less effective in resolving problems. However, it only
reaches statistical significance at the 0.1 level in the model investigating
management firm-related issues but achieves no statistical significance in the model
examining developer-related issues.

Second, neighborhood SES is found to have statistically significant impact on
effectiveness in solving management firm-related issues. As hypothesized,
compared to HOAs in low-socioeconomic neighborhoods, HOAs of middle- and
upper-SES neighborhoods are more likely to succeed in solving management firm-
related problems. However, neighborhood SES does not have a significant impact
on solving developer-related issues.

Third, when it comes to neighborhood age, the hypothesis is partly supported. It
offers evidence that HOAs in older neighborhoods are more effective in resolving
developer-related problems. Older neighborhoods have more history and experience
in upholding property rights and, therefore, higher problem-solving effectiveness.
However, the impact of neighborhood age on solving property management firm-
related issues is not significant and with a sign opposite of expected. This result may

141
be because these two types of issues involve two very different outside forces—
developers and property management firms—and have different natures. Solving
developer handed-down issues, such as those involving property rights and housing
values, is more time consuming and complex than management firm-related issues,
such as poor neighborhood beautification and high management fees. Therefore, the
experience older neighborhoods have accumulated over time and time itself are more
important in solving developer-related issues. When it comes to property
management firm-related issues, the time and experience that come with the history
of the neighborhood does not seem to matter much.

Finally, neighborhood size does not seem to matter much for HOA effectiveness in
solving both developer- and property management firm-related issues.

4.4.2 Organizational Factors
First, the results show that HOA leadership styles do not have a direct impact on
effectiveness in solving developer-related issues but have significant influence on the
effectiveness in solving management firm-related issues.

HOA leaders’ sense of purpose (focusing on self-governance power or specific
service delivery) and strategies (building up neighborhood capacity or changing local
government) for confronting developers do not have a significant impact on the

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results. This may be because developer-related issues involve many social factors
and are difficult to resolve through the action of neighborhood associations alone. In
China, no grounded legal system exists to protect property rights. The demand for
housing is far above the supply. What is more, developers normally have strong
economic power and political connections. With all of these considerations, it is
very hard to tackle developer-related issues. The neighborhood organization leader’s
concern and strategies do not matter much in solving developer-related issues.

However, interestingly, the leadership style has notable impact on the effectiveness
in solving management firm-related issues. The results show that HOA leaders’
strategy for problem solving has significant impact on the effectiveness in solving
property management issues. When solving those problems, HOAs with leaders who
direct their energies to reforming or changing the local government are not as
successful as those with leaders who focus on developing neighborhood capacities
and resources.

In urban China, with limited resources and capacities and increasing responsibilities,
local government officials are not prepared to address the issues raised by HOAs. If
HOA leaders direct their energy to transforming government attitudes, neighborhood
problems would not be resolved in a short time. For example, one ombudsman style
leader mentioned that:

143
I have written four long letters to the director of department of
construction and made phone calls to those governmental officials
many times for the lack of regulation on property management firms.
I hope that they have more sympathy with us (by doing so). But even
if some of them orally agreed with what I said, I do not see that they
helped us to resolve the problems.

With this orientation, that HOA has focused much energy on working with
government agencies but has not been able to resolve the problems faced.

Both entrepreneurs and community builders orient their energy toward internal
neighborhood capacity building and resource mobilization. Entrepreneurs are
concerned with specific services and pay more attention to monitoring service
quality provided by the property management firms. They pay less attention to
gaining back self-governing power compared to community builders and usually
take a moderate approach, such as negotiations in service contract renewal in solving
problems. As a result, the property management firms usually are willing to improve
service quality in response to the HOA Committee’s requests. One entrepreneur-
style leader is a Local People’s Congress member and focuses on establishing a
harmonious relationship with the management firm. In the interview, she noted:
In my viewpoint, the main goal of HOAs’ committees is to establish a
stable and harmonious neighborhood, which has the property
management firm as an integral part. The main function of the
HOAs’ committees is being a bridge between homeowners and the
property management firm—aligning their conflicts on service
delivery. For example, we found that the firm did not provide good
cleaning service in the past few weeks. We, homeowner committee

144
members, just had a meeting with the property manager and asked
him to improve it.

Community builders pay more attention to self-governing power, and building
neighborhood self-governing capacities and increasing members’ participatory
awareness. If organization leaders are concerned with the rights of homeowners to
manage their own properties and to govern their own neighborhoods, general
homeowners would be easily motivated to participate in collective actions aiming to
resolve neighborhood problems. In addition, community builders concerned with
neighborhood capacity building tend to mobilize external resources that can grow the
HOA’s own capacity. For example, an HOA leader with a community-builder style
noted:
You cannot depend upon governments to help you resolve your
neighborhood problems. We found that the best way to resolve the
problems is to mobilize all the resources we have and build up our
own capacities. Unity is the strength. Once the manager of this
property management firm found that most homeowners stand on our
side, they have to sit down and negotiate with us; they have to accept
our reasonable requirements.

In sum, the organizations with “entrepreneur” and “community builder” styles of
leadership, which focus on improving the self-governing capacity and resources
available to the neighborhood, are more effective in solving management firm-
related problems than those with “ombudsman” and “protestor” styles of leadership.

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Second, the data support the resource dependency theorists’ argument that the extent
to which the organization depends upon outside resources influences its
effectiveness. Table 4.6 shows that the amount of HOA funds significantly affects
effectiveness in solving management firm-related issues regardless of whether the
HOA Committee or management firm controls the money. Interestingly, the amount
of money does not have a significant impact on effectiveness in solving developer-
related issues, but who controls the money has a significant impact on effectiveness.

The above findings reflect the fundamentally different nature between those two
types of issues. Developer-related issues are zero-sum economic conflicts between
developers and HOAs. Any developer inherited problems—such as construction
defects, the shrinking of apartment unit areas and the occupation of common
properties—involve huge economic interests that cannot achieve a win-win result. If
they have no discretion over the use of their money and have to get the money from
their property management firm, HOAs find it very hard to obtain the money from
management firms, which normally have connections with developers, to oppose
developers. For example, in an interview, an HOA leader said that although it has a
large amount of funds, the association cannot use the money to take action to resolve
common property issues due to the lack of autonomy. She said:
Our funds comes from 2% of the management fees, about
RMB78,000. But we cannot manage our own money. If we want to
buy some office supplies, we must submit an application to the
manager of the property management firm. After his approval, the

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firm’s staff will send the office supplies to us. You see, it is
impossible at all to get money from the firm for the use of hiring
lawyers to sue its parent firm (the developer). It is just like
“bargaining with the tiger for its skin” [asking somebody to act
against his own interest].

In those cases, the dependency of HOAs upon external parties impedes their ability
to resolve developer-related issues.

However, management firm-related issues do not necessarily reflect zero-sum
conflicts between two parties. If HOA Committees want to use their associations’
money in improving service delivery quality, such as upgrading monitoring
equipment, in most cases the property firms willingly accept the committees’
decision on the use of the money. Therefore, who controls the money is less
important than the amount of money HOAs have in affecting the effectiveness in
solving property management issues.

Third, as predicted, the number of active members significantly affects the
effectiveness in solving property management firm-related issues but not developer-
related issues. This finding reflects the differences between HOA relationships with
developers vs. with property management firms. Developers do not need to work
with neighborhood residents after completing building unit sales. However, property
management firms are located within the neighborhood and have a more sustained
relationship with neighborhood residents. As neighborhood service providers,

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property management firms must interact with residents daily and work with HOAs
to resolve problems. Therefore, with strong and broad support from homeowners,
management firm-related problems would be resolved more effectively. Yet, it does
not have a direct impact on effectiveness in solving developer-related issues. Again,
this difference also may be due to the complex nature and huge vested interests
involved with developer issues. Therefore, the number of active homeowners and
their collective action may not have significant influence on HOA effectiveness. As
for the amount of time HOA Committee members spent, it has a direct but weak
impact on solving developer-related issues (p<0.10) but does not have an impact on
management firm-related issues.

Fourth, the number of workshops, seminars, forums and conferences HOA leaders
attended does not have an impact on effectiveness for both developer- and
management firm-related problems.

Finally, I find that governmental attitude is significant for effectiveness in solving
both developer- and management firm-related problems. When governments are
supportive, HOAs tend to be able to resolve neighborhood issues more effectively.
These results are consistent with my earlier expectation. In a country with an
authoritarian political culture and system, governments’ attitudes toward
neighborhood organizations are critical to their problem-solving capabilities.

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Interestingly, this study finds that governments’ attitudes toward HOAs vary across
and within districts. Table 4.7 summarizes HOA leaders’ perceptions of the extent
of government support for their activities in nine districts. It demonstrates that some
district governments support HOAs more than others. For example, among the four
HOAs located in the Fengtai district, three reported that their local government
supported their work. In contrast, in the Chongwen district, all four surveyed HOAs
complained about the lack of support from their district government; rather, different
obstacles from local government agencies confronted these HOAs in registration or
problem-solving processes. This suggests that different district governments may
hold varied viewpoints about HOAs and their social functions.

Table 4.7 District Governmental Attitudes Toward HOAs

District
Number of
HOAs
Mean of Governmental
Attitudes (Dummy,
1=Supportive)
Changping 8 0.50
Chaoyang 17 0.47
Chongwen 4 0
Daxing 3 0.33
Fangshan 1 0
Fengtai 4 0.75
Haidian 45 0.44
Tongzhou 4 0.25
Xuanwu 2 0.50
Total 88 0.43

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Moreover, Table 4.7 shows that local governmental attitudes toward HOAs also vary
within the same district. For example, 44 percent of sampled HOAs in the Haidian
district reported that the local government is quite supportive; while 56 percent had
contrary feelings. In interviews, local government officials said they would like to
support HOAs that tend to resolve neighborhood problems in rational and reasonable
ways but would not support HOAs that always mobilize residents in demonstrations
or protests that may cause social unrest. This suggests that governmental attitudes
toward HOAs may vary depending on HOA strategies used in solving neighborhood
issues. Other reasons for the differences in governmental attitudes could include an
HOA’s socioeconomic status, and HOA leaders’ social networks, strategies in
accessing local government and so on. It is of interest to identify empirically the
importance of these factors in determining governmental attitudes toward
neighborhood organizations. I reserve this task for future occasions.

4.5 Concluding Remarks
This study finds that the most serious problems facing Chinese HOAs are related to
common property rights, property management services and owners’ internal
disputes. However, most HOAs oriented their actions toward solving issues
involving outside parties, namely, developers and property management firms. Even
if internal conflicts and disputes among homeowners were perceived to be very
serious, few HOAs take action to address them. This is a result of the ambiguous

150
status of HOAs in contemporary China. First, the role of HOAs is unclear under the
2003 Regulation and rules. Some HOA leaders do not think that associations have
the responsibility and authority to deal with homeowner disputes. Second, HOAs do
not have power to regulate their members’ behaviors. Third, HOAs lack resources
and energy to solve homeowner disputes. Confronted by many problems, solving
internal conflicts is not the HOAs’ first priority. What is more, HOA leaders fear
that addressing internal conflicts and disputes may risk community unity, which is
viewed as critical to winning battles with developers and property management
firms.

This study also provides an empirical investigation of how internal (organizational)
and external (neighborhood) factors influence HOA effectiveness in solving two
major types of neighborhood issues—developer- and property management firm-
related issues.

Neighborhood factors have different impacts on HOA effectiveness in solving
different types of issues. For example, neighborhood SES has a strong positive
relationship with effectiveness in solving property management issues but has no
impact on solving developer-related issues. The number of neighborhood problems
facing HOAs and neighborhood age significantly influence HOA effectiveness in
solving developer-related issues rather than solving management firm-related issues.

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This difference is due to the different relationships between HOAs and developers vs.
property management firms, and the nature of the problems involved with these two
outside forces.

Moreover, this study reveals that many organizational factors have significant
predictive power for effectiveness in solving property management firm-related
issues but not for developer-related issues. For example, human resources, measured
by the involvement of active members and the frequency HOA Committee members
communicate with each other, are important for Chinese HOAs to resolve property
management service issues successfully. This confirms the expectations of a number
of scholars cited earlier. Leadership styles have a significant impact on HOA
effectiveness in solving management firm-related problems. As predicted,
considering China’s political condition, “community builder” and “entrepreneur”
styles of leadership are common in HOAs. Furthermore, HOAs with “community
builder” and “entrepreneur” leadership tend to be more effective in solving
management firm-related issues than organizations with “protestor” and
“ombudsman” leadership. This demonstrates that building neighborhood self-
governing capabilities and mobilizing internal resources are better strategies for
solving property management problems.

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Among the organizational factors examined in this chapter, two factors demonstrate
significant influences on effectiveness in solving both developer- and management
firm-related problems. The factors are the availability of operating funds and
governmental attitudes. The amount of money is critical to solving property
management-related issues effectively regardless of who manages the money.
However, how much money the HOAs have does not matter much in solving
developer-related issues. What matters is whether the HOAs have full discretion
over the use of the money. I believe that one reason for such findings lies in the
fundamental difference between these two types of problems: problems between
developers and homeowners, and problems between property management firms and
homeowners. Any developer handed-down problems—such as construction defects,
the shrinking of apartment unit areas and the occupation of common properties—
involve huge economic interests and reflect zero-sum conflicts between developers
and homeowners. If they have no discretion over the use of their money and must
get the money from their property management firm, HOAs may not be able to get
any money at all to oppose developers because management firms normally have
close connections with developers. However, management firm-related issues do not
necessarily reflect zero-sum conflicts between the two parties, and win-win solutions
to resolve conflicts may be possible. If HOA Committees want to use their
associations’ money to improve service delivery quality, the property firms are
willing to accept committees’ decisions on the use of the money. Therefore, who

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controls the money is less important than the amount of money HOAs have in
affecting the effectiveness of solving property management issues.

Governmental attitudes are critical to HOAs’ problem-solving effectiveness for both
issues, especially for the effectiveness in solving developer-related issues. Without
grounded legal rules for solving private property rights issues, governmental
attitudes toward conflicts are a decisive factor for the outcomes of HOA problem-
solving efforts. Its impact on management service delivery effectiveness reflects that
the strong power of the Chinese government to intervene in the life of private
neighborhood organizations.

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CHAPTER 5 THE IMPACT OF ORGANIZATIONAL
INTERNAL GOVERNANCE ON CIVIC AWARENESS AND
PARTICIPATION

While a large body of literature has explored the social impacts of private
neighborhood associations, no consensus has been reached among writers about their
roles in improving civic engagement and local democracy.

From a normative perspective, many scholars consider private neighborhood
associations as a genuine school of democracy (Rosenblum, 1997). They are said to
provide an opportunity for resident face-to-face interaction (Doherty, 2000), improve
participation skills and foster a sense of community (Berry et al., 1993; Hyatt, 2000),
engage residents in self-governance and empower people in decision-making for
their daily lives (Chaskin, 2003; Rich, 1980; Warren, 2001). In this way, it is
asserted that the development of private neighborhood associations greatly would
improve local democracy and citizen participation.

On the other hand, through empirical studies, some scholars argue that private
neighborhood organizations represent a disengagement from community and a
thwarting of citizen participation (Barton & Silverman, 1987, 1994; McKenzie,
1994; Scavo, 1979). They argue that strict associative regulations on residents and

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autocratic operations cannot confer civic virtues to members (Blakely & Snyder,
1997; Kennedy, 1995 ; Kennedy & Hann, 2004). Moreover, it is argued that the elite
and oligarchic governing structures of those organizations have challenges with
representation and legitimacy issues (Bolduc, 1980; Sills et al., 1980). Because of
the lack of participatory democracy within them (Alexander, 1989), it is suggested
that private neighborhood associations tend to damage local democracy and civic
participation.

These opposing viewpoints lead to an interesting argument: Neighborhood
associations with a more democratic internal life are more likely to promote civic
virtues and behavior, and achieve democratic outcomes. Rosenblum calls this
argument the “congruence thesis” (1998:36), a view that many scholars share. For
example, Diamond (1999) proposed that if the associations are to function as free
schools for learning democracy, they must function democratically in their internal
processes of decision-making and leadership selection. Similarly, Skocpol (1999),
Cohen and Rogers (1995), and Denhardt and Denhardt (2003) have argued that
democratic outcomes should come from associations that practice the democratic
principles of transparency, participation, deliberation and representation.

If the congruence thesis were true, the investigation of the democratic impact of
private neighborhood associations would boil down to looking at whether they

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operate in a democratic way to provide the appropriate conditions for nurturing
participatory democracy. Based on this assumption, some empirical studies have
been devoted to investigating the internal governance of these associations (such as
Aldrich, 2000; Barton & Silverman, 1987, 1994; Doherty, 2000; Low, 2003;
McKenzie, 1994). However, the validity of the congruence thesis is seldom
empirically examined. Chinese homeowner associations (HOAs) provide a good
opportunity to test this normative argument because they are the only channel for
Chinese residents to participate in decision-making processes and local affairs.

The task of this chapter is to provide an empirical test of the assumption—that
residents in neighborhood associations with a more democratic internal life are more
likely to be concerned with neighborhood issues and participate in neighborhood
governance—using the case of the newly emerged Chinese HOAs.

The analysis includes two major steps. First, I examine the HOAs’ internal
governance and whether they operate in a democratic manner. On one hand,
according to the congruence thesis, if democratic principles—such as participation,
deliberation and transparency—characterize the internal political lives of most
Chinese HOAs, we should be optimistic regarding their social impact on China’s
long-run democratization process. On the other hand, if most HOAs operate in an
illiberal and non-participatory way, we have to be cautious in advocating for the

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potential of Chinese HOAs to promote neighborhood democracy. The internal
governance of HOAs is examined regarding the following three aspects:
1. Governing structure: To what extent does the governing structure of Chinese
HOAs provide participatory opportunities to association residents?
2. Operation of the elected committee: Do Chinese HOA Committees promote
open deliberation on issues of common neighborhood concern? Do they
solicit input from residents in their decision-making and maintain a
transparent process?
3. Leadership: Do HOA leaders make decisions adhering to democratic
procedures in face of conflict and controversy? Do they trust resident civic
efficacy in neighborhood governance?

Second, I test the congruence thesis and investigate whether HOAs with more
democratic internal life lead to greater civic virtues and behavior in residents. More
specifically, how do the three aspects of HOA internal governance affect residents’
concern for their neighborhoods and their participation in neighborhood governance?

The remainder of this chapter proceeds as follows. The second section reviews two
streams of literature related to this study. I first will review the studies on the impact
of community associations on local democracy. The studies on the internal
governance of community associations then will be reviewed, and research
hypotheses are proposed based on a review of this literature. The third section

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discusses the research methodology. The fourth section presents descriptive findings
on Chinese HOAs’ internal governance, and how their internal life influences
resident civic awareness and participation. Finally, the concluding section
summarizes the findings and the limitations of this research.

5.1 Literature Review
This study builds upon and enriches two related streams of literature. The first
stream concerns the impact of community associations on local democracy. The
second one examines the internal governance of neighborhood associations. A brief
review of the literature in relation to our study is provided below. Research
hypotheses are proposed based on a review of this literature.

5.1.1 The Impacts of HOAs on Democratic Governance
The scholars studying associations and democracy pay most attention to the role of
associations in improving individual civic virtues and participatory behaviors (Fung,
2003: 519). However, no agreement has been reached on the impact of private
neighborhood associations on local democracy and neighborhood governance.

From a normative perspective, many scholars consider voluntary associations as a
“school for democracy” (Rosenblum, 1997). In Democracy in America, Tocqueville
attributed democratic functions to voluntary associations. Following Tocqueville,

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many scholars have argued that the development of private neighborhood
associations greatly would improve local democracy and citizen participation.

First, associations teach their members civic skills. Through participatory practices
in local neighborhood life, people acquire the necessary social and political skills in
intelligent discourse and deliberation, decision-making, conducting meetings, rule
formulation and engaging in collective action. As a result, the powerless individual
is enlightened (Elden, 1985), and individual weakness is overcome (Hooghe, 2003).
For example, the governance structure of private neighborhood associations provides
residents with the experience of self-governance and participatory practices. A
residential majority elects the board of directors, the governing body of private
neighborhood associations, through a democratic procedure. Members self-impose
the rules that regulate them (Frug, 1999). Therefore, Rosenblum (1997) argued that
private neighborhood associations can provide residents with the experience of
establishing common rules, rule-making and self-government.

Second, associations promote residents’ civic virtues. Associational life “imparts a
desire of union, and teaches the means of combination to numbers of men who
otherwise would have always lived apart” (Tocqueville, 1973, 2:VII). Neighborhood
organizations teach their members how to attain collective interests. Members learn
to sacrifice some self-interest to the common good. In the tradition of Tocqueville,

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classical and participatory democracy theorists—such as J. S. Mill, J. Bentham, Jean-
Jacques Rousseau, G. D. H. Cole and Carole Pateman—long have recognized the
role of associational life in educating citizens and cultivating civic virtues.

Furthermore, the physical characteristics of private neighborhood associations—such
as their relatively small size, shared property assets and common facilities—could
recapture the individual connections destroyed by the suburbanization process. In a
society that has become “very self-oriented or very individual-oriented” (Bellah,
Madsen, Sullivan, & Swidler, 1985), private associations provide opportunities for
residents to develop and pursue collective interests (Barber, 1984; Blakely & Snyder,
1997). With common interests, association members have incentives and
opportunities to participate in decision-making processes that influence their lives.
In addition, the relatively small size of neighborhoods provides residents the
opportunity for face-to-face interaction (Sorkin, 1992).

In summary, many scholars have claimed that private neighborhood associations
potentially can improve democratic governance. This school of thought is based on
Tocqueville’s proposition that participation in private associations can enhance the
quality of political life in the larger public sphere. Private neighborhood associations
facilitate the discovery of common interests and provide participatory experience,
through which strong democracy can be institutionalized (Barber, 1984).

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However, some scholars remain strongly skeptical regarding whether these
associations could confer civic virtues and skills to their members. Some claim that
private neighborhood associations cannot contribute to participatory democracy;
rather, the internal governance of private neighborhood associations could be
destructive to local democracy (Bell, 1998; Blakely & Snyder, 1997; Davis, 1990;
Low, 2003; McKenzie, 1994; Sandercock, 2002). McKenzie (1994) argued that
autocratic association boards—which frequently impose unreasonable regulations on
members and violate their basic civic rights—control residents of most private
neighborhood associations. He gave examples of cases where HOAs unreasonably
regulated residents. For example, an HOA board stopped a resident’s 45-year-old
wife from moving in with him as HOA rules prohibited anyone younger than 48
years old from living in the neighborhood (1994: 15). To McKenzie, although
elected by residents, the association board still operates in an illiberal way by rigidly
enforcing technical rules against people’s use of their homes and ignoring the
consequences of such intrusive behavior (1994: 19).

Many scholars join McKenzie in voicing concerns about the restrictive power of
such associations on the democratic rights of residents and the abandonment of the
democratic spirit (such as Blakely & Snyder, 1997; Kennedy, 1995 ; Kennedy &
Hann, 2004; Pacione, 2006). The increasing number of disputes between private

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neighborhood associations and their members, and many lawsuits contesting the
rules and regulations of private neighborhood associations also support this
viewpoint. The inflexibility of regulations—such as the color of the house,
basketball hoops over garages (Dilger, 1992) and the weight of pets (Klein, 1995)—
shows that individual residents cannot experience a sense of community under such
conditions. Even the Community Associations Institute, usually considered a
champion of the private neighborhood association system, proposed to “eliminate
restrictions that are outdated and illogical, and to address specific problems with
clear, specific solutions” (cited from Conte, 2001).

Private neighborhood associations usually are criticized for their autocratic
operations. Critics argue that such associations do not ensure that their members
have a voice in decision-making processes (Mields, 1973). Their governing
structures tend to be oligarchic (Barton & Silverman, 1987; McKenzie, 1994). In
their study of homeowners’ associations in California, Barton and Silverman (1987)
found that most boards of directors consist of a small group of powerful neighbors.
Similarly, Conte (2001) showed that association members often complain about their
board members steering lucrative contracts to their acquaintances, stifling
democratic participation by withholding access to records, closing meetings and
denying general members’ right to vote by secret ballot. In addition, McKenzie

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(1994) argued that leadership positions of association boards tend to attract certain
types of people who enjoy wielding dictatorial power over others (pp. 131-132).

In summary, despite their potential for promoting local democracy, private
neighborhood associations that have undemocratic internal life, as some scholars
propose, may be destructive to civic participation and local democracy. The main
critiques focus on associations’ over-restrictive rules, oligarchic governing
structures, autocratic operation of boards and elitist leadership.

These opposing viewpoints lead to questions regarding the validity of the
“congruence thesis”. In this chapter, I first examine the internal political lives of
Chinese HOAs. I then test whether neighborhood associations with more democratic
internal lives are more likely to promote civic virtues and behavior among residents
and achieve democratic outcomes, especially in the Chinese context.

5.1.2 Internal Governance of Private Neighborhood Associations
The internal governance of private neighborhood associations has been studied from
three perspectives: 1) governing structure (Austin, 1991; Haeberle, 1989; Knoke &
Wood, 1981; Langbein & Sportswood-Bright, 2004), 2) operation of boards,
especially in decision-making processes (Doherty, 2000; Yates, 1973), and 3)

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leadership (Crenson, 1983; Oliver, 1984; Read, 2003; Rich, 1980 ; Schmid, 2001;
Sills et al., 1980). Democratic internal political life of HOAs is characterized by:
1. Governing structures that provide members opportunities for participating in
neighborhood governance,
2. Open, shared decision-making and frequent communication on important
issues, and
3. Civic-oriented leaders who follow democratic procedures and rules in
decision-making and trust residents’ civic efficacy.

5.1.2.1 Governing structure
The governing structure of private neighborhood associations has a bearing on the
extent of member participation (Centers, 1968). The governing structure indicates
the extent to which members have opportunities to participate in decision-making
and neighborhood affairs. The main variation in governing structures among
voluntary associations is the extent to which the distinct internal units are designated
responsibilities for making decisions and governing association affairs (Knoke &
Wood, 1981:81). Governing structure can be simple or elaborate, formal or informal
(Austin, 1991). Associations with simple governing structures only consist of a
board of directors. Elaborate governing structures involve a board of directors and
additional decision-making units, such as standing subcommittees. Formal structures
are officially established by the organization, through which responsibilities and

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activities formally are delegated to members. Informal structures involve ad hoc
groups or task forces, which are temporary and unofficial.

In the United States, many private neighborhood associations maintain simple and
formal governing structures. Except for the board, no other governing structures
exist that involve residents in neighborhood affairs. The board comprises volunteers
from the neighborhood who are elected by members at the annual meeting to
represent the association and make decisions for all members (McKenzie, 1994:183).
The board sets and enforces the rules. It functions as both the legislative and
executive branches of private neighborhood associations (Langbein & Sportswood-
Bright, 2004).

With this simple governing structure, HOA general members have a very limited role
in neighborhood governance. Unless the association bylaws or governing documents
specify a particular issue for approval by members, the board conducts all associative
activities and affairs, and exercises all of the powers (Sproul, 1994). Therefore, the
role of general members is limited to attending general membership meetings,
periodically voting to legitimatize the leadership and listening to the reports of
presidents. Residents have few opportunities for participation in neighborhood
governance.

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However, some associations develop some formalized, elaborate structures beyond
the board to facilitate resident participation. Sometimes, associations provide
residents a role with clear responsibilities and authority as a way to encourage
participation. In the study of voluntary HOAs in Los Angeles, Purcell (1998) found
that some associations set up standing or ad hoc subcommittees to invite members to
participate in addressing specific issues. In these cases, association residents,
especially those with expertise and prestige, have opportunities to participate in
association governance. According to Van de Kragt, Orbell, and Dawes (1983),
even if a specific task is small, to complete it, the individual contribution to the
organization could induce a higher level of participation than otherwise would be
observed. Subcommittees and task forces can extend association governance to a
larger set of homeowners than merely board members. However, we need to be
aware that such subcommittees might not involve people with less expertise and
experience. Moreover, temporary units might receive less recognition from
members than formal organizational units due to their short-term nature.

In China, some associations create more formalized, elaborate governing structures
that include not only standing or ad hoc subcommittees but also structures, such as
monitoring committees, building or flat captain systems and formalized
representative assemblies. HOAs in China adopt more elaborate governing
structures because they generally are larger than HOAs in the United States.

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Organizational theorists propose that large organizations tend to have a higher degree
of structural differentiation than smaller organizations. Blau (1970), Pugh (1977),
Donaldson (1995) and others suggested that large organizations are more likely to
create different types of organizational subunits. In the United States, the average
size of an HOA was 150 units (Bell, 1998:243). In comparison, in this study, the
average size of sampled Chinese HOAs was 985 households.

Due to their large size, some Chinese HOAs have created different types of
structures that aim to provide as many participatory channels as possible to
association residents. A building captain system, for example, tries to involve more
general members (that is, captains) in working for the association, such as by sending
members newsletters and notices, and collecting input from residents. Some HOAs
set up monitoring committees to solicit residents (including unaffiliated members) to
oversee the work of HOA Committees. To an extreme, some Chinese HOAs
establish a representative assembly where neighbors elect a number of
representatives to form a policy-making body. In these HOAs, the elected board
serves as the executive branch, and decision-making power rests with the elected
representatives. Because these representatives officially represent homeowners
living near them, this system ensures a formal and regular channel for general
residents to participate in decision-making processes.

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Therefore, with more formalized, elaborate governing structures, general members
will have more opportunities to participate in neighborhood affairs (Knoke & Wood,
1981). By including more individuals than board members in the association’s
governing apparatus, residents’ civic virtue, such as a concern for neighborhood
issues and a commitment to neighborhoods, will be increased (Haeberle, 1989).
When they learn participatory skills through governing neighborhood affairs,
residents may more readily participate in ongoing neighborhood affairs. From these
observations I offer the following:
Hypothesis 7a: Resident participation in neighborhood affairs will vary
positively with the degree of formalized governing structures.

Hypothesis 7b: Resident concern with neighborhood issues will vary
positively with the degree of formalized governing structures.

5.1.2.2 Operation of Association Boards: Democratic or Autocratic?
The board of directors is the governing body of a private neighborhood association
and conducts the association’s daily business. Therefore, many studies on private
neighborhood associations have focused on the operation of the association board.
However, findings regarding whether association boards operate in a democratic way
are mixed.

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On one hand, some scholars suggest that association boards operate in a way that
encourages members to participate in local activities and in collective decision-
making through general membership and board meetings (Dilger, 1992). The 1999
National Survey of Community Association Homeowner Satisfaction reports that
around 50 percent of association members attend every or most association meetings
(cited from Nelson, 2005:125).

On the other hand, others have criticized the autocratic nature of the operation of
association boards (Barton & Silverman, 1987; McKenzie, 1994). Barton and
Silverman (1987) found that conflict among association boards and general members
often occurred in California HOAs. The boards have been accused of being
authoritarian, closing their meetings and ignoring the input of general members.
Edward Hannaman (2002), an association regulator in the Bureau of Homeowner
Protection of the New Jersey Department of Community Affairs, reported:
The frustrations posed by the duplicative complainants or by the
complainants’ misunderstandings are dwarfed by the pictures they
reveal of the undemocratic life faced by owners in many associations.
Letters routinely express a frustration and outrage easily explainable
by the inability to secure the attention of boards or property managers,
to acknowledge no less address their complaints. Perhaps most
alarming is the revelation that boards, or board presidents desirous of
acting contrary to law, their governing documents or to fundamental
democratic principles, are unstoppable without extreme owner effort
and often costly litigation. (Hannaman, 2002: 237)

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I expect that the way an association board operates—democratically or
autocratically—has an impact on general members’ civic awareness and
participation. Based on the research mentioned above, the operation of a
neighborhood association is characterized as democratic if: 1) Board meetings are
open to general members; 2) The board actively communicates with general
members so that members are well informed on neighborhood issues and respects the
input of members; and 3) Members are encouraged to participate in decision-making
on important neighborhood issues.

First, residents should have the right of open procedures if they are expected to be
concerned with neighborhood affairs and to participate in association governance
(Wolfe, 1978). Closing board meetings eliminates important channels for general
member participation. However, the association board is not obliged to open their
meetings to all members because open meeting laws do not apply to private
neighborhood associations. In the United States, many private neighborhood
associations are incorporated and subject to corporate law concerning their
governance procedures (Dilger, 1992; Rosenberry, 1989; Rosenblum, 1998). Public
sunshine and open meeting laws that governmental meetings are subjected to are not
applicable to private neighborhood board meetings. As a result, some private
neighborhood associations may close their decision-making processes to general
members.

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Second, the extent to which the board actively communicates with general members
reflects how much the board values general member participation and input.
Without being informed adequately about neighborhood issues, residents cannot
participate in neighborhood governance. The main source of information about
neighborhood issues is the board (Barton & Silverman, 1989:36). If the board does
not inform residents when an issue first is considered, then resident feedback cannot
be incorporated into the decision.

Improving communication between the board and residents is difficult because it
“requires a great deal of sensitivity, a considerable amount of time, a measure of
patience, and a basic faith in human nature” (Wolfe, 1978:96). This is especially
true for private neighborhood associations of large size. However, without frequent
communication and information sharing, social support, coordination or influence
cannot occur (Butler, 2001). Better communication is thought to be an effective
means to promote coordination and interaction in large organizations (Aiken &
Hage, 1968:917). Effective communication can improve homeowners’ sense of
community and increase their feelings of responsibility for addressing neighborhood
issues, which, according to the “school of democracy” argument, is critical for
preparing residents to be responsible and active citizens in the larger public sphere.

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Therefore, I examine how the board actively communicates with general members,
informs them about important neighborhood issues and solicits input for solving
those issues.

Third, I examine the frequency of general membership meetings as a measure for the
extent to which the board allows and encourages general member participation in
neighborhood governance. General membership meetings provide an opportunity
for all members to participate in association affairs and in decision-making. At
meetings, the board reports on board activities to all members and brings up
important proposals (such as amending bylaws, changing board members and
signing service contracts with property management firms) for members to consider
and approve. The meetings also provide an opportunity for interaction between
board members and general members. Therefore, from these observations, I
hypothesize:
Hypothesis 8a: Resident participation in neighborhood affairs will vary
directly with the openness of HOA committee meetings to residents.
Hypothesis 8b: Resident concern with neighborhood issues will vary directly
with the openness of HOA committee meetings to residents.

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Hypothesis 9a: Resident participation in neighborhood affairs will vary
positively with the frequency of communications between the HOA
Committee and residents.

Hypothesis 9b: Resident concern with neighborhood issues will vary
positively with the frequency of communications between the HOA
Committee and residents.

Hypothesis 10a: Resident participation in neighborhood affairs will vary
positively with the frequency of general membership meetings.

Hypothesis 10b: Resident concern with neighborhood issues will vary
positively with the frequency of general membership meetings.

5.1.2.3 Leadership
Leadership is an important factor for resident participation in private neighborhood
association affairs (Read, 2003; Rich, 1980 ). Association residents are more likely
to participate in neighborhood governance if association leaders are civic oriented,
capable of tolerating conflicts, adhere to democratic procedures in decision-making
and believe in the residents’ efficacy in participation (Conway & Hachen, 2005;
Doherty, 2000).

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The findings regarding whether or not association leaders tend to be civic oriented
are mixed. Some suggest that autocratic leaders motivated by self-interest are
common in private neighborhood associations. This claim usually is used as an
explanation for why such associations fail to build neighborhood democracy. For
example, McKenzie (1994) argued that people who enjoy the pleasure of wielding
power over others tend to fill leadership positions (131-132). In this case, resident
participation in neighborhood issues would be stifled, and civic virtue would be
dampened. On the contrary, Van Grack (1995) claimed that association leaders
serve in their positions out of a sense of duty to their neighborhoods, which is similar
to those individuals who become involved in larger and more general civic
associations. Doherty (2000) also supported this claim in her study on such
associations in Maryland. Examining what motivates committee directors to serve as
leaders helps illuminate whether association leaders are oriented toward common
interests and democracy.

Democratic leadership requires acceptance of conflict because tolerance of
opposition and deliberation can foster participation. Conflict is unavoidable. When
conflicting opinions emerge in decision-making processes, association leaders either
can accept conflicts and deal with them based on democratic rules, or insist on their
own opinions and stifle others. Democratic leadership usually welcomes different

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opinions because of its strong belief that diverse opinions can contribute to decision-
making processes, although not necessarily to the decision per se (Doherty, 2000).
In her case study, Doherty (2000) found that association leader attitudes toward
conflict and controversy account in part for the variation in resident participation and
in the quality of neighborhood governance.

In addition, whether leaders are democratic can be assessed by their attitudes toward
resident efficacy in civic participation. Civic efficacy is a state of mind regarding the
extent to which people have the ability to resolve problems and influence important
results in their lives (Boardman & Robert, 2000; Smith, 1994). People with higher
levels of efficacy—that is, the belief that they can influence the outcomes of
important matters and change external systems through their actions—are more
likely to participate in association affairs (Conway & Hachen, 2005; McAdam &
Paulsen, 1993; Perkins, Brown, & Taylor, 1996; Zimmerman & Rappaport, 1988).
Although very few studies have examined the impact of leaders’ attitudes toward
resident civic efficacy on neighborhood participation, Doherty’s empirical study on
private homeowner associations in Montgomery County, Maryland, shows that
association leaders who respect resident participation and value the deliberation
process influence neighborhood resident participation (Doherty, 2000). Therefore, I
expect:

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Hypothesis 11a: Resident participation in neighborhood affairs Resident
concern with neighborhood issues will vary directly with whether HOA
leaders use democratic rules in decision-making when facing conflict.

Hypothesis 11b: Resident concern with neighborhood issues will vary
directly with whether HOA leaders use democratic rules in decision-making
when facing conflict.

Hypothesis 12a: Resident participation in neighborhood affairs will vary
directly with whether HOA leaders think residents have a high-degree of
civic efficacy.

Hypothesis 12b: Resident concern with neighborhood issues will vary
directly with whether HOA leaders think residents have a high-degree of
civic efficacy.

5.2 Methods
The analyses combine quantitative and qualitative methods. Quantitative methods
are used to explore HOA internal governance and how it affects residents’ concern
for neighborhood issues and participatory behavior. The interview data complement
the quantitative analysis.

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5.2.1 Variables and Measures
Multiple regression and ordered logit regression analyses were performed to examine
how HOA internal governance affects resident civic awareness and participation in
neighborhood affairs.

5.2.1.1 Dependent Variables
There are two dependent variables in this chapter, including resident participation in
neighborhood affairs and the perceived increasing civic awareness. Resident
participation is measured by the percentage of association residents who actively
have participated in neighborhood affairs during the previous year. The perceived
increasing civic awareness of residents is measured by the increase in the degree of
resident concern for neighborhood issues (on a scale of 1 to 4) perceived by HOA
leaders. The survey asked the following questions:
• How many residents are “active” in your neighborhood, that is, who have
actively attended committee meetings, and contributed their time, advice and
money to support neighborhood issue solutions and association activities in
the past year?
• After the formation of your association, has your association residents’
concern for neighborhood issues increased? (1) Not at all (2) Somewhat (3)
Moderately (4) Extremely?

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5.2.1.2 Independent Variables
The independent variables of particular interest include HOA governing structures,
the openness of HOA Committee meetings, committee efforts in communicating
with general members, the frequency of HOA general membership meetings per year,
the rules of committee decision-making in face of conflict, and HOA leader attitude
toward resident efficacy in governing neighborhood affairs and improving
governmental responsiveness to neighborhood needs.

The governing structure is measured by the extent to which association residents are
encouraged to participate in governing neighborhood affairs. Chinese HOA
governing structures are classified into four categories: oligarchic (with committee
only), elite (with standing or ad hoc subcommittees, task forces or monitoring
councils), limited representative (with a building/flat captain system) and
representative governance (with a formal representative assembly system). They are
coded from 0 to 3.

The openness of HOA Committee meetings is measured by whether the HOA
Committee meetings are open to all. They are coded with a dummy variable.

Communication is measured by the total number of newsletters, work reports and
public notices (including information on HOA Committee decisions on issues of

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common concern and the solicitation of resident input and so on) distributed during
the previous year. In the survey, to measure committee efforts in communicating
with general members, the following questions are asked: 1) How many newsletters
and work reports did your association send out to all members over the past year? 2)
How many times did you publicize your committee decisions or solicit input from
general members over the past year?

The frequency of HOA general meetings is measured by the average number of
meetings held in the neighborhood every year since the formation of the association.

The rules of committee decision-making are measured by whether decision-making
follows the one-man or majority rule when facing conflicting opinions. One-man
rule means that the director made the final decision when the committee faced
conflicting opinions, which is categorized as 0. Majority rule means that the
committee made a final decision by majority rule in the face of conflict, which is
categorized as 1.

Leaders’ attitudes toward resident civic efficacy is examined by the extent to which
leaders believe that residents have the ability to resolve neighborhood issues and
govern association affairs (on a scale of 1 to 4) and the extent to which the leaders
believe that resident collective participation can improve governmental

180
responsiveness to neighborhood needs (on a scale of 1 to 4). The survey asked
interviewees two questions:

• Working in this position, how much do you feel that residents have the ability
to self-govern neighborhood affairs or resolve neighborhood issues on their
own? (1) Not at all (2) Somewhat (3) Quite a lot (4) Very much
• Working in this position, how much do you feel that residents working
together can make local governments more responsive to the needs of the
neighborhood? (1) Not at all (2) Somewhat (3) Quite a lot (4) Very much

The neighborhood characteristics—including neighborhood size, socioeconomic
status and neighborhood age—are added in the regression models as control
variables. The measurement of these three control variables was discussed in
Chapter 4.

5.3 Findings and Discussion
5.3.1 Descriptive Analysis of Chinese HOA Internal Governance
5.3.1.1 Governing Structures
As mentioned in Chapter 3, the central government of China issued two
administrative rules regulating Chinese HOAs, including the 2003 Regulation and
the 2003 Notice. These two governmental documents provide a guiding framework

181
for the governance of Chinese HOAs. They specify rules pertaining to the rights and
obligations of HOA members, the constitution of governing bodies, the general
responsibilities of associations and elected HOA Committees, voting procedures and
so on. According to these regulations, the governing structure of Chinese HOAs
shall be composed of an elected HOA Committee as the executive branch to
implement the decisions of general membership meetings. Therefore, governing
structures, such as the building captain system or homeowner representative
assemblies, are institutional innovations by HOAs.

In this study, I find that HOAs in Beijing have created a variety of governing
structures. I classified them into four types. First is the oligarchic governing
structure. These HOAs only have an HOA Committee as a governing body as
specified by governmental regulations. Second, some HOAs establish elite
governing structures in which the committee creates standing or ad hoc
subcommittees, task forces for specific issues and/or monitoring committees
consisting of three to five homeowners to oversee the work of the committee. Third,
some HOAs establish a limited representative structure. These associations create a
building captain system to involve captains in working for the association, such as by
sending newsletters to residents and collecting feedback from residents. The
building captains are not elected by residents or limited to being homeowners. They
usually are nominated by the HOA Committee and recommended by residents.

182
Their influence in decision-making processes varies across neighborhood
associations. Fourth, some HOAs have a formal representative assembly to govern
neighborhood affairs. As mentioned above, near neighbors elect their homeowner
representatives, who form the policy-making body of the association. In these
HOAs, the HOA Committee serves as an executive branch, and the decision-making
power rests with the representative assembly. As I move from type one to type four,
the governing structures become more open, welcoming and encouraging of general
member participation in neighborhood governance.

Figure 5.1 shows the distributions of the four different types of governing structures.
Twenty-two percent of HOAs have an oligarchic governing structure, 25 percent of
associations keep an elite governing structure, 28 percent of HOAs have a limited
representative structure, and 24 percent of HOAs establish a formal representative
assembly.

183

Figure 5.1 Chinese HOAs’ Governing Structures

Because the representative assembly is not specified in the governmental rules, some
new HOAs hesitate to establish such a structure in case they cannot register
successfully. In the interviews, some HOA leaders showed strong interest in
adopting a representative assembly structure in the near future. One point that needs
to be emphasized is that elite, limited representative and formal representative
governing structures all are institutional innovations by Chinese HOAs because they
create venues other than what is stipulated in the governmental regulations to
encourage resident participation. As mentioned earlier, the openness of these
structures to general members varies, which I expect to have an impact on general
member participation and civic awareness.
HOA Governing Structures
Oligarchic
23%
Elite
25%
Limited
Representativ e
28%
Formal
Representativ e
24%

184
5.3.1.2 The Operation of HOA Committees
First, most HOA Committees open their committee meetings to all residents.
Although the regulatory rules do not mandate that HOA Committees open their
meetings to all residents, Figure 5.2 shows that 80 percent of HOA Committees
allow residents to attend committee meetings. However, the resident attendance rate
is not high (see Table 5.1). For HOAs that allow residents to sit in on committee
meetings, the average attendance is 14 people, and the median is five people. In
some associations (13%), nobody attends the committee meetings even if they are
allowed to attend. In the interviews, when I asked them why they did not participate
in HOA Committee meetings, general residents most often gave a perfunctory
response, such as “I’m too busy” or “I believe that they will do the right thing on
behalf of our common interests.” Only one interviewee refused to participate in the
meeting because he was not happy with the committee rather than not being
informed or welcomed. That resident said:
I attended the meeting once. I found that those committee members
do not understand the law and related rules at all. I do not want to
attend their meetings any more.

These observations demonstrate that most Chinese HOA Committees would like to
make their meetings open to residents. Procedurally, residents have channels to
participate in neighborhood governance. However, HOA Committees need to pay
more attention to creating incentives for greater resident participation and meeting
attendance.

185
Figure 5.2 Openness of HOA Committee Meetings

Second, HOA Committees varied in making efforts to communicate with residents.
Figure 5.3 shows that many HOA Committees make significant efforts to
communicate with their residents in different ways, including sending newsletters,
reports and public notices that inform of HOA Committee decisions and solicit
resident input. Among the HOAs surveyed, 24 percent of HOAs attempt to reach out
to general members with ongoing neighborhood issues from one to three times every
month, and 15 percent communicate with their members more than three times every
month. However, a large portion of committees do not make much effort to
communicate with their residents. Twenty-five percent of committees communicate
with their members at a rate of between once per month and once every two months.
Thirty-five percent of HOAs communicate with their members fewer than six times a
year.
Do you open your meetings to all?
Not open
20%
Open to all
80%

186

Table 5.1 Descriptive Statistical Summary of Sample HOAs and Their Internal
Life

Variable Name Mean Median Min. Max. SD
Dependent Variable:
Resident participation (percentage of
active members in a neighborhood)
6

2 0 63 9

Increased residents’ concern for
neighborhood issues (1-4 scales)
2.34

2 1 4 0.84

Independent Variables:
Neighborhood Characteristics
Neighborhood size (unit: 100
household)
9.85

8.10 .40 37.28 7.00

Neighborhood age (unit: month) 69.61 62.5 20 302 36.89
Neighborhood SES- low (dummy,
1=yes)
.33

0 0 1 .47

Neighborhood SES- middle (dummy,
1=yes)
.34

0 0 1 .48

Neighborhood SES- upper (dummy,
1=yes)
.33

0 0 1 .47

Governing Structures (0,1,2,3) 1.53 2 0 3 1.09
Oligarchic structure .23 0 0 1 .42
Elite structure .25 0 0 1 .44
Limited representative .28 0 0 1 .45
Formal representative .24 0 0 1 .43
Operation of HOA Committees
Allow sit-in (dummy, 1=yes) .80 1 0 1 .40
Number of residents who sit in the
meeting
13.87 5 1 200 32.80
Communication (unit: times/year) 16.86 8 0 120 22.46
Membership meetings (unit: times/year)1.68 1.48 0 6.91 1.17
Leadership
Conflict solution (dummy, 1=by the
majority rule)
.86 1 0 1 .35
Perceived residents’ ability to govern
Neighborhood (1-4scales)
2.43 2 1 4 .98
Perceived residents’ ability to improve
governmental responsiveness (1-4
scales)
2.40 2 1 4 .92

187

Figure 5.3 Frequency of HOA Committees’ Communication with Residents

35
25
24
15
0
5
10
15
20
25
30
35
40
0-5/yr 6-11/yr 12-35/yr 36+/yr
Percentage

Third, HOA general membership meetings vary in regularity and frequency.
Governmental regulations do not mandate that HOAs hold regular general
membership meetings. Therefore, membership meetings can be regular or ad hoc.
This study finds that most HOAs hold membership meetings on both regular and ad
hoc bases. Table 5.1 shows that the average frequency of membership meetings is
1.7 times every year ranging from none to 6.9 times every year. Only one HOA has
not held general membership meetings at all since the establishment of the
association. Many HOAs specify the frequency of regular membership meetings in
their bylaws. Yet some do not follow the bylaws strictly. Figure 5.4 demonstrates
that more than half of the HOAs (54%) held membership meetings from once to
twice a year. Twenty-one percent of HOAs held such meetings more than two times
a year, while 23 percent of HOAs did not hold membership meetings annually.

188
Figure 5.4 The Average HOA Membership Meetings Held Per Year

5.3.1.3 Leadership
First, most HOA leaders (86%) show a tolerance for conflict and follow majority
rule in decision-making when serious conflicts arise. But 14 percent of HOA leaders
said they make final decisions based on their own judgment when they face diverse
opinions in the committee (see Table 5.1).

Second, HOA leaders’ attitudes toward resident civic efficacy varied. Thirty-eight
percent of leaders believe their association residents have an “excellent” (20 percent)
or “good” (18 percent) ability to self-govern neighborhood affairs and resolve
neighborhood issues. Forty-seven percent of leaders perceive that their association
residents have a “moderate” ability to self-govern neighborhood affairs, while 15
At most once/yr
38%
At most twice/yr
41%
More than
twice/yr
21%

189
percent of leaders do not consider association residents to have the ability to resolve
neighborhood issues on their own (see Figure 5.5).

Figure 5.5 Perceived Residents’ Ability to Resolve Neighborhoods Issues

15
47
18
20
0
5
10
15
20
25
30
35
40
45
50
Not At All Moderately Very much Extremely
Percentage

As for leaders’ attitudes toward resident external efficacy in increasing governmental
responsiveness, 41 percent of leaders consider that citizen participation can
“extremely” or “very much” improve governmental responsiveness to neighborhood
issues/needs. Forty-three percent believe that citizen participation could
“moderately” improve governmental responsiveness, while 16 percent do not trust
citizen participation can increase governmental responsiveness (see Figure 5.6).

190
Figure 5.6 Perceived Resident Ability to Improve Governmental
Responsiveness to Neighborhood Needs
16
43
27
14
0
5
10
15
20
25
30
35
40
45
50
Not At All Moderately Very much Extremely
Percentage

In addition to these questions, which asked HOA leaders their attitudes toward
general member participation, I also examine what motivates committee directors to
serve as leaders. As McKenzie (1994) argued that HOA leadership positions tend to
be filled by people who enjoy wielding power over others (McKenzie, 1994: 131-
132), which stifles active participation, this question helps illuminate whether
Chinese HOA leaders are civic and common interest oriented. To investigate this, I
asked: “To what extent do you agree with the following descriptions of the reasons
you joined the committee?” The respondents were provided a card that listed 16
different motivating factors, such as “I want to resolve specific questions of concern
to me,” “I enjoy playing a prominent role in my neighborhood,” “I would like to run
for local political office,” and “I want to provide useful services to my

191
neighborhood.” They were asked to rate each description as strongly disagree,
disagree, agree or strongly agree.

Table 5.2 shows that self-interest oriented reasons such as— 1) to be prominent (“I
enjoy being respected by others” or “I enjoy playing a prominent role in my
neighborhood”), 2) the pursuit of personal political careers (“I want to run for
residents’ committee, People’s Congress or Political Consultative Committee” or “I
want to gain self-governing and local politics experience”), and 3) “I want to resolve
the issues I am concerned with” are not the major motivations for serving as HOA
leaders. Comparatively, a sense of civic responsibility, contributing to the
community and pursuing consumer and citizen rights are among the dominant
motivations.
17
This suggests that in China, although in an authoritarian culture,
leaders in HOAs value common interests and the provision of valuable services to
the neighborhood. Therefore, they are less likely to stifle homeowner participation
for their self-interest.

17
The self-reported data used in this study could be biased as interviewees might tend to report
reasons more consistent with the “right” social norm. However, this approach is common in
organizational behavior research because it usually is “the only feasible way to access constructs of
interest” (Donaldson & Grant-Vallone, 2002:246). To reduce such bias, I asked interviewees this
question twice in different ways and in different places to verify their answers. In the survey on
Homeowner Associations’ Governance Ability, I asked the interviewee an open-ended question about
why he/she would like to serve as the director. At the end of the Survey on HOA Leaders’ Opinions, I
showed the card to the interviewee and asked them to rate the reasons. I did not receive conflicting
responses.

192
Table 5.2 Reasons for Serving as the Director of HOA Committees

Rank Reasons for serving as Director

Mean
Strongly
Disagree
1
Disagree
2
Agree
3
Strongly
agree
4

Total
1 I want to provide useful services to my neighborhood

3.77 0
(0%)
2
(3%)
13
(18%)
58
(79%)
73
2 I feel a kind of responsibility to my neighborhood

3.47 4
(5%)
3
(4%)
21
(29%)
45
(62%)
73
3 I want to protect my and others’ consumer rights

3.42 6
(8%)
2
(3%)
20
(27%)
45
(62%)
73
4 I want to protect my and others’ citizen rights

3.27 9
(12%)
4
(5%)
19
(26%)
42
(57%)
74
5 Nobody wants to do it, but there should be someone to
do it
3.03 8
(11%)
11
(15%)
25
(34%)
29
(40%)
73
6 I enjoy helping others

3.00 11
(15%)
7
(10%)
26
(36%)
29
(40%)
73
7 I have management /executive expertise

2.97 12
(16%)
7
(10%)
25
(34%)
29
(40%)
73
8 I can make friends with neighbors

2.74 16
(22%)
9
(12%)
26
(36%)
22
(30%)
73
9 I want to resolve the issues I am concerned with

2.72 21
(28%)
4
(5%)
24
(32%)
25
(34%)
74
10
I feel that I can make the organization operate better
than others
2.63
15
(21%)
16
(22%)
23
(32%)
19
(26%)
73

193
Table 5.2: Continued
11 I want to gain self-governing and local politics
experience
2.63 17
(23%)
10
(14%)
29
(40%)
17
(23%)
73
12 I was recommended by others

2.43 28
(38%)
6
(8%)
20
(27%)
20
(27%)
74
13 I have more free time than others

2.26 30
(41%)
13
(18%)
11
(15%)
19
(26%)
73
14 I enjoy being respected by others

2.22 29
(40%)
12
(16%)
19
(26%)
13
(18%)
73
15 I enjoy playing a prominent role in my neighborhood

2.07 31
(42%)
17
(23%)
14
(19%)
11
(15%)
73
16 I want to run for residents’ committee, People’s
Congress or Political Consultative Committee
1.46

55
(77%)
5
(7%)
5
(7%)
6
(8%)
71

194
5.3.2 Analysis of the Impacts of Chinese HOA Internal Governance on
Citizen Participation
A multiple regression model is used to examine the impact of the internal
governance of Chinese HOAs on association resident participation. Table 5.3
displays the results of the regression analyses.

Moreover, an ordered logit regression model is used to examine how the internal life
affects resident civic awareness of neighborhood issues. An ordered logit model is
used in this case because the dependent variable is an ordered categorical measure of
increased resident civic awareness—whether resident concern for neighborhood
affairs improved at a low, medium, large or very large extent. The regression results
are reported in Table 5.4.

195

Table 5.3 Multiple Regression Results on Resident Participation

Percentage of Active Members
N_SES (1-3 scale) 0.006
(0.44)
N_Size (unit: 100 households) -0.003
(2.18)**
N_Age (unit: months) -0.001
(1.72)*
Governing Structure (0-3 category) 0.026
(2.89)***
Openness of meetings (dummy) 0.016
(0.70)
Communication (unit: times) 0.001
(2.85)***
HOA meetings /year (unit: times) 0.005
(0.61)
Conflict Solution (dummy) 0.02
(0.88)
Perceived Residents’ Self-Governing Ability (1-
4 scale)
0.015
(1.77)*
Perceived Residents’ Influence on
Governmental Responsiveness (1-4 scale)
0.02
(2.22)**
Constant -0.095
(1.57)
Observations 73
R-squared 0.43
Adj R-squared 0.32
Absolute value of t statistics in parentheses, * significant at 10%; ** significant at
5%; *** significant at 1%.

196

Table 5.4 Ordered Logit Regression Results on Increased Civic Awareness of
Neighborhood Issues

Increased
Awareness
N_SES (1-3 scale) -0.806
(1.99)**
N_Size (unit: 100 households) -0.083
(2.01)**
N_Age (unit: months) 0.009
(0.90)
Governing Structure (0-3 category) 0.901
(3.00)***
Openness of meetings (dummy) 1.257
(1.66)*
Communication (unit: times) 0.028
(2.42)**
HOA meetings /year (unit: times) 0.428
(1.49)
Conflict Solution (dummy) -0.141
(0.20)
Perceived Residents’ Self-Governing Ability (1-4
scale)
1.21
(3.95)***
Perceived Residents’ Influence on Governmental
Responsiveness (1-4 scale)
0.198
(0.70)
Observations 73
Pseudo R-squared 0.26
Absolute value of t statistics in parentheses, * significant at 10%; ** significant at
5%; *** significant at 1%.

197
5.3.2.1 Governing Structure
Confirming the hypothesis 7a, Table 5.3 shows that HOAs with more formalized and
elaborate governing structures tend to have more residents who attend committee
meetings and contribute their energy, money and other personal resources to the
neighborhood. The findings also confirm the ypothesis 7b that homeowners in these
HOAs demonstrate a higher level of awareness of neighborhood issues (see Table
5.4). In these HOAs, residents are more likely to be attentive to neighborhood affairs.

When it comes to the relationship between governing structures and HOA residents’
participation in neighborhood affairs, a reverse causality might exist. That is, the
correlation between these two variables in Table 5.3 might be due to the possibility
that HOAs with more active members tend to establish more formalized and
elaborate governing structures rather than that more formalized and elaborate
governing structures lead to greater HOA member participation in neighborhood
affairs. To shed light on this, I look at how the choice of governing structure relates
to neighborhood SES. Neighborhood SES appropriately proxies the activeness of
HOA residents in neighborhood affairs. Compared to lower- and upper-class
residents, middle-class residents generally are more active. Lower-class residents
are less active, and their participation tends to be spontaneous and sporadic because
they cannot afford the high participation costs. Upper-class residents are less

198
interested in organized participation because they have other channels for accessing
government to defend their rights.
18

If reverse causality is valid—that is, HOAs with more active members tend to
establish more formalized and elaborate governing structures—then we should
observe that middle-class HOAs are more likely to choose these structures. A
regression analysis is conducted to examine how the choice of governing structure
differs between middle-class neighborhoods and lower- and higher-class
neighborhoods. Table 5.5 reports the results.

Table 5.5 Regression Analysis of Choice of Governing Structures
Governing Structures
N_Size 0.004
(0.22)
N_Age 0.003
(0.99)
SES_Middle 0.227
(0.92)
Constant 1.2
(3.78)***
Observations 92
R-squared 0.02
Absolute value of t statistics in parentheses, * significant at 10%; **
significant at 5%; *** significant at 1%.

18
In my analysis, I did find that upper-class HOAs tend to have simple and less formalized governing
structures.

199
Table 5.5 shows that after controlling for neighborhood size and age, middle-class
neighborhoods are not more likely to have more formalized and elaborate governing
structures. This suggests that reverse causality is not likely to be true in this case.
The most plausible explanation for the observations in Table 5.3 and 5.4 is that more
formalized and elaborate governing structures lead more HOA members to
participate in neighborhood affairs and help increase resident civic awareness.
However, caution needs to be exercised before we completely rule out the possibility
that HOAs with more active members tend to establish more formalized and
elaborate governing structures. The discussions above are based on the currently
collected data, and the socioeconomic status of neighborhoods might be a crude
proxy for HOA resident activeness in neighborhood issues. This suggests an
interesting topic for future research. Questions regarding why HOA leaders adopt
different types of governing structures will be included in future studies.
19

The findings suggest that to encourage citizen participation in neighborhood
governance, Chinese HOAs need to establish more formalized democratic governing
structures to involve residents in neighborhood affairs. In a neighborhood with
thousands of residents, mobilizing citizen participation becomes difficult, according

19
The preparatory group and HOA committee determine the original governing structure. Their
openness to and knowledge of Western political systems may be decisive in their choice of HOA
governing structures. However, this only is a hypothesis that requires empirical testing.

200
to Olson’s group theory (1965). This study shows that more elaborate and
formalized organizational structures could help involve more residents in
neighborhood governance through sub-unit structures beyond committee and
membership meetings, such as through building captain systems and representative
assemblies.

5.3.2.2 The Operation of HOA Committees
Various measures of the operation of HOA Committees relate to resident civic
awareness and participation in expected directions but show a different degree of
impact.

First, when it comes to the openness of committee meetings, the hypothesis 8a is not
supported while hypothesis 8b receives support. It has a statistically significant
impact on resident concern for neighborhood issues, but the impact on resident
participation is not statistically significant. The finding demonstrates that increased
participatory opportunities may have enhanced resident awareness. However, this
may not translate into participation because of either apathy (McCaffrey, Faerman, &
Hart, 1995) or participation costs (Cooper, 1979).

Second, as expected in hypothesis 9a and 9b, frequent committee communications
with general members significantly increase both resident participation in

201
neighborhood affairs and concern for neighborhood issues (see Table 5.3 and Table
5.4). This suggests that efforts to inform residents of committee actions and to
solicit resident input are effective ways to mobilize participation in association
activities, especially with the large size of neighborhoods in urban China. For
example, one HOA leader told me how they obtain residents’ trust through frequent
communication. She said:
We post all the meeting records in our Public Forum blackboards,
such as committee meeting minutes, meetings with the property
management firm and other neighborhood organizations. In this way,
people know we are continuing to deal with neighborhood issues. It
usually takes several months to resolve one problem. We need to
negotiate with the property management firm and contact
governmental officials. If we do not post notices frequently, nobody
knows what we have done. Now, people trust that we work on their
behalf and understand our difficulties in the problem-solving process.
If we request it, many residents would join us to resolve
neighborhood problems together.

Third, although the frequency of membership meetings has an expected (positive)
impact on resident participation (hypothesis 10a) and civic awareness
(hypothesis10b), the coefficient is not significant at the conventional 5% level. The
lack of significance may be due to the high correlation of the frequency of
membership meetings with the HOA governance structure.
20
The latter is more
important and absorbs some of the explanatory power of the frequency of

20
The correlation coefficient is 0.32, which is significant at the 5% level. An examination of the
Variance Inflation Factors (VIFs) shows that a multicollinearity problem does not exist.

202
membership meetings in determining resident civic awareness and participation.
When I leave governing structures out of the regression, the frequency of
membership meetings does show a statistically significant impact on resident
concern for neighborhood issues and participation.

5.3.2.3 Leadership
Leadership has mixed effects on resident participation and concern for neighborhood
issues. Hypothesis 11a and 11b are not supported. Regression results show that
whether final decision-making followed by one-man rule or majority rule when
conflicting opinions arise does not have a significant impact on both resident
participation and civic awareness (see Table 5.3 and Table 5.4).

However, hypothesis 12a and 12b receive support. Table 5.3 reports that leaders’
strong belief in the importance of citizen participation on increasing governmental
responsiveness is significantly associated with residents’ active participation in
neighborhood affairs. This finding supports the argument that leadership attitudes
and styles are critical to member participation (Walton 1980). If they do not believe
their members can change the outside system and influence the results of important
matters, leaders are less likely to respect or mobilize member participation in the
neighborhood governance. Moreover, the leader perception of resident civic efficacy
(both internal and external) is found to be statistically significant. The findings

203
demonstrate that leaders’ strong belief in the ability of residents to self-govern the
neighborhood and resolve neighborhood issues is significantly associated with both
active participation and raised civic awareness (see Table 5.4).

5.3.2.4 Control Variables
Some neighborhood characteristics are found to have a significant impact on both
resident participation and concern for neighborhood issues. First, neighborhood size
is negatively related to resident participation and raised civic awareness. It
demonstrates that people in large groups are more difficult to mobilize to participate
in neighborhood affairs and are more apathetic toward neighborhood issues. This
supports Olson’s (1965) group theory. Second, Table 5.4 reports that neighborhood
SES has a negative impact on resident concern for neighborhood issues. This
demonstrates that residents in higher-SES neighborhoods are less likely to be
concerned with neighborhood affairs. This may be explained in that homeowners in
higher-SES neighborhoods have relatively greater economic power and more
political connections with governments. Therefore, they may more likely take a top-
down approach to tackling neighborhood issues instead of a grassroots approach.

5.4 Concluding Remarks
To summarize, this chapter examines the internal governance of Chinese HOAs and
provides some evidence for the congruence thesis––neighborhood associations with

204
more democratic internal life are more likely to promote civic awareness and
resident participation in neighborhood governance.

Generally, most HOAs in Beijing operate with democratic principles. They created a
variety of governing structures to welcome residents to participate in neighborhood
governance even if such structures are not specified in the governmental rules. Most
HOA Committees open their meetings to all residents. Many committees make
significant efforts to communicate with residents. Most HOA leaders are civic
oriented and trust resident civic efficacy. This finding is striking because the
Chinese authoritarian tradition does not provide cultural support for citizen
participation nor does the current political system provide institutional support.
These findings also contrast with the HOAs in the United States, which often are
criticized for their autocratic operations and negative impact on civic participation.
Chinese HOAs tend to operate democratically within undemocratic institutional
environment for a number of internal and external reasons.

One reason for the difference is that Chinese HOA Committees do not have
substantial power upon formation as the boards of HOAs in the United States do.
Because the 2003 Regulation and related governmental rules do not clearly specify
their power and responsibilities, Chinese HOA Committees do not have substantial
power to regulate their members and to punish the members who breach association

205
communal rules. As a result, HOA Committee members cannot exercise
unreasonable control over association residents. More importantly, because they do
not have the authority granted by laws, Chinese HOA Committees obtain their
legitimacy and define their authority through a bottom-up democratic process, which
requires active citizen participation. Interestingly, the ambiguity of governmental
rules leaves Chinese HOA leaders significant space to innovate in the development
of internal governing structures.

Second, homeowners in metropolitan cities typically are middle-class, educated and
wealthy. They are more open to and in fact tend to embrace democratic principles,
such as civic participation, decision-making through voting processes and checks on
power etc. When HOA leaders develop their governing structures and manage
neighborhood affairs, the homeowners’ values apparently play a significant role.
This is especially important when considering the next point.

Another reason that Chinese HOAs are more likely to adopt democratic
characteristics in their internal governance compared to their counterparts in the
United States is that they have a different governance focus. In the United States,
internal neighborhood issues are the major focus. To deal with issues within the
neighborhood, a certain degree of authority and regulation is required. By contrast,
Chinese HOA agendas mostly are occupied with dealing with external parties

206
(developers and property management firms) to protect common property rights on
behalf of residents (Wang, 2007). Compared with developers and property
management firms, HOAs have less economic and political power. As a result,
organizational power from member support and participation is critical to HOA
Committee work (Purcell, 1998). Establishing more open and democratic internal
governance is an effective way to mobilize resident participation and obtain more
organizational power. It is unclear whether HOAs would become more authoritarian
if their focus shifts from bargaining/fighting with external parties to solving internal
issues. However, clearly at this stage, most Chinese HOAs adopt democratic
principles in carrying out their everyday operations.

The analyses in this chapter provide empirical support for the congruence thesis that
proposes that associations with a more democratic internal life are more likely to
achieve democratic outcomes. The organizational factors that significantly have
raised civic awareness and neighborhood participation include a formalized and
democratic governing structure, frequent communication between the committee and
residents and the leaders’ strong belief in resident civic efficacy.

My findings suggest that in neighborhoods with a large number of households that
normally have difficulties with active resident participation, Chinese HOAs need to
develop formalized, elaborate governing structures, such as a representative

207
assembly system, to encourage residents to participate in neighborhood governance.
In practice, HOAs often face difficulties in establishing innovative governing
structures in the first place. In light of this, on the one hand, central and local
governments should empower neighborhoods for self-governance. If governments
alter the micro-managing nature of regulations and instead encourage resident
participation in neighborhood organizations, more and more HOAs would be willing
to develop formalized governing structures. On the other hand, efforts should be
made to disseminate valuable learning from those HOAs that successfully have
designed and implemented democratic governing structures. Given that government
is hesitant to support completely self-governing neighborhood organizations, non-
profit organizations and others interested in the development of civil society in China
probably need to assume this task.

My findings also suggest that HOA committees should make more efforts to
communicate with association residents to increase resident participation. In my
observations, many HOA committees do not pay attention to interactions with their
members. Thus, residents are not aware of committee actions, and
misunderstandings and mistrust emerge between committee members and general
members. Obstacles to frequent communication include: 1) Communication costs.
It involves huge resources—time, money, materials and people—to inform every
member in a large neighborhood (with hundreds or thousands of residents); 2) Some

208
property management firms impede communication between the HOA committee
and residents. Through field research, I found that in many neighborhoods, property
management firms controlled public spaces (bulletin boards, columns, etc.)
designated for posting notices and fliers. Many interviewees complained that
property management firm employees often removed notices of important decisions
and neighborhood issues. Facing these communication obstacles, some HOAs
attempt to maximize communication among members, such as by creating online
forums and using mobile group text messaging. In light of this, on the one hand,
governmental agencies should regulate the unreasonable and unethical business
practices of property management firms with some degree of penalty; on the other
hand, the HOAs that pay less attention to communication should learn from the
valuable experience of HOAs that have established effective communication
mechanisms.

Several limitations of this study make the generalizations of the conclusions
somewhat problematic, but they also point to potentially fruitful directions for
further investigation. First, this empirical study focuses on HOAs in one city.
Although the City of Beijing is representative of cities in China where HOAs have
developed rapidly during the urbanization process and vary greatly in operation
processes, the findings reported here might not apply to other cities in China. This
could be addressed by future studies that examine HOAs in other cities in China.

209
Multi-city studies also would provide additional understandings of the impact of
larger political and economic contexts on the internal operations of neighborhood
associations. Second, some variables, such as increased civic awareness, are
measured using association leaders’ subjective assessments. Interesting future
research would be to survey residents regarding how associational life has impacted
their awareness of neighborhood affairs and to see if the same findings would result.
Finally, the sample size is relatively small with only 92 organizations. Although it
already covers about 30 percent of all HOAs established by 2005 in Beijing, a larger
sample would be desirable.

210
CHAPTER 6 SUMMARY AND CONCLUSIONS

This dissertation examines the social functions and role of newly emerging
homeowner associations in neighborhood governance in China. Analyses were
based on a study of 92 registered HOAs in Beijing. In this final chapter, I
summarize the main empirical findings of the dissertation, and discuss its theoretical
implications, limitations and future research.

6.1 Summary of Major Empirical Findings and Practical
Implications
This dissertation examined three research questions. The first question explored the
institutional environment under which Chinese HOAs carry out their functions and
how institutional arrangements impact HOA performance and development. After
examining relationships between HOAs and organizations that have important
influences on urban residential neighborhoods and the regulatory system governing
HOAs in China, this study finds that the external institutional environment does not
favor the operations and future development of HOAs.

Chinese HOAs hardly receive support from organizations that have important
influences on neighborhood governance. Real estate developers and property
management firms usually have economic interests that oppose HOA interests. Due

211
to the lack of legal rules to define private properties, developers and property
management firms commonly infringe upon homeowners’ common properties to
earn large profits. In this study, 92 percent of HOAs face such problems.

HOAs usually do not have good relationships with RCs or receive their support in
governing neighborhoods. In this study, I found that only 25 percent of the sampled
HOAs have frequent interaction with RCs and receive their support. One reason is
that RCs and HOAs usually have conflicting or duplicative functions in governing
neighborhoods, such as mediating neighbor relations and organizing social activities.
Second, as quasi-governmental organizations with a long history in neighborhoods,
RCs are granted power through regulations to direct HOAs, while HOAs question
the RCs’ legitimacy in ruling over them.

Local government and related governmental departments more often side with
developers, property management firms and RCs rather than self-governing HOAs.
Moreover, the long-standing discriminatory culture against citizen-initiated, non-
governmental organizations makes local governments hesitant in supporting HOA
actions. As a result, HOAs hardly receive substantial support from government.

Without the advantage of economic and political power compared to other
organizations, HOAs must seek institutional power to legitimize their actions.

212
However, this study finds that regulations of HOAs in China are not well established
in guiding HOA actions. In contrast, the regulations in practice constrain HOA
actions. These constraints include:

z First, current regulations and the newly passed Property Rights Law do not grant
Chinese HOAs legal status. HOAs and the elected committees are neither social
nor business organizations. Therefore, they cannot fulfill any legal rights and
liabilities, open a bank account or bring a lawsuit beyond property management
related activities to court. Lacking legitimacy in taking certain actions, HOAs
and their committees are limited greatly in performing their functions. It reflects
the urgent need to recognize HOAs as legal entities. Many scholars and
practitioners have recommended strongly that Property Rights Laws recognize
the legal status of HOAs but have achieved little. Recently, they advocated for a
new, specific law, similar to the Residents’ Committee Organizational Law, on
governing HOAs. If this HOA organizational law passes, then legal status
would be granted automatically.

z Second, current regulatory institutions fail to provide HOAs with clear and
complete guidance. Central government rules provide principles rather than
enforceable rules and use more vague rather than clear language. As a result, the
rules are difficult to enforce. For example, as the highest level regulation, the

213
2003 Regulation use the words “recommend,” “encourage,” or “advocate” in
some articles, which makes enforcing rules unclear. Moreover, regulations do
not specify detailed rules to guarantee the operationalization of general
principles. For example, the 2003 Regulation prescribe that homeowners have
the right to know and supervise the use of common properties and facilities;
however, without detailed rules to ensure implementation, these rights hardly
extend beyond paper. As a result, developers and property management firms
most easily infringe upon homeowners’ common properties. Overall, the
incompleteness and ambiguity of regulations create difficulties for Chinese
courts to mediate conflicts.

z Third, current regulatory institutions tend to micro-manage HOAs closely and
limit their autonomy. Regulations of HOAs favor clear-cut control over
neighborhood service delivery. HOAs have no autonomy to choose self-
organized property management. They also do not have the right to hire
multiple professional service enterprises to deliver different types of services.
The control-oriented regulations not only stipulate many detailed rules to control
HOA operations but also standardize HOA constitutions. Governments provide
sample HOA Covenants and HOA Rules and Procedures. In practice, these
samples have become mandatory for HOAs. This limits the autonomy and
flexibility of HOAs to self-govern neighborhoods.

214

z Fourth, current regulations create many obstacles for HOAs to establish
themselves and take action. Some rules make it difficult for HOAs to enforce
and maintain efficient operations. For example, the required high participation
rates (two-thirds or half of total members) for HOA general meetings limit
HOAs in responding to urgent neighborhood issues. Similarly, high vote
requirements become obstacles for HOAs in decision-making on neighborhood
issues.

In a nutshell, this study finds that Chinese HOAs grow in an unfavorable institutional
environment. The interests of developers, property management firms and local
governments usually conflict with HOA interests. Therefore, these organizations
have incentives to prevent HOAs from developing and operating as homeowners
would desire. The incomplete and ambiguous regulations governing Chinese HOAs
significantly impair HOAs in solving neighborhood problems. The lack of
enforcement of HOA regulations allows other organizations with competing interests
to prevent HOA development and operations.

Well-functioning non-governmental organizations need a clear legal and institutional
context in which to operate, where laws and rules are clearly defined and impartially
applied to everyone (Shiras, 1999). The laws and rules also should apply to the

215
judicial system and governmental agencies to ensure fair and impartial
implementation. Gray areas may exist in terms of the interpretation of rules, but
maximum clarity in the rules and impartial application are fundamental to promoting
a strong enabling legal and institutional environment for the development of
neighborhood associations. This study suggests that central and local governments
should create a favorable legal and institutional environment for HOAs.
Governments can amend the current regulations to ensure HOAs’ legal status, and
provide more enforceable and clear rules on HOA operations. In addition, effective
regulations on the business practices of real estate developers and property
management firms are in great need. Currently, no laws or regulations exist to
discipline how developers and property management firms conduct their business
except for general regulations applicable to all businesses. The absence of such laws
or regulations has left significant gray areas where developers and property
management firms can take advantage of their political and economic advantages
and thus impinge upon homeowner rights.

In sum, the absence of laws and regulations that govern HOAs, developers and
property management firms have led to a case-by-case approach in resolving
homeowner conflicts with developers and property management firms. The
outcomes from this approach greatly depend on the discretion of government
agencies and courts, and vary greatly across cases. Being in a politically and

216
economically disadvantaged position, homeowners often feel that government
agencies and courts treat them unfairly. This feeling leads directly to mass action—
such as protests and demonstrations—through which homeowners utilize the media
and public attention to gain leverage in resolving issues of concern. Manifested at
the societal level, the development of homeownership has increased social unrest in
China’s metropolitan areas. Therefore, to achieve a more harmonious society, which
is the current leadership’s political goal, laws and regulations that govern HOAs,
developers and property management firms are in great need. These laws and
regulations can help alleviate uncertainty, form mutual understanding and
expectations, and reduce public conflict (e.g., demonstrations and protests). This
ultimately will contribute to the development of a more harmonious society.

An interesting phenomenon is that Chinese HOAs develop at different levels under
similar unfavorable institutional environments. Some take collective action on
neighborhood concerns, whereas others have not been active at all. Some of the
active HOAs successfully address common problems, whereas other active HOAs
cannot achieve their agendas. To my best knowledge, no work has been done to
examine empirically why and how, once created, these HOAs demonstrate different
degrees of effectiveness.

217
Therefore, the second research question focused on factors that impact HOA
effectiveness in solving different types of neighborhood issues. In Chapter 4 of this
dissertation, I developed a model of the determinants of HOA effectiveness in
solving the most prominent types of neighborhood issues faced by residents—
property management firm-related issues (such as service quality and service fee
problems) and developer-related issues (such as infringement upon common
properties and construction defect problems). I find that neighborhood factors have
different impacts on HOA effectiveness in solving the two types of neighborhood
issues. For example, HOAs in low- SES neighborhoods are less effective in solving
property management issues than those in higher-SES neighborhoods. However,
neighborhood SES has no impact on solving developer-related issues. While they
significantly influence HOA effectiveness in solving developer-related issues,
neighborhood age and the number of neighborhood problems have no significant
impact on management firm-related problem-solving. The differences mainly result
from the different nature of problems involving developers and problems involving
property management firms.

Moreover, chapter 4 reveals that many organizational factors have significant
predictive power regarding effectiveness in solving property management firm-
related issues but not for developer-related issues. As predicted, HOAs with more
human resources (i.e. the number of active members and the frequency of HOA

218
Committee members’ communication) more successfully resolve property
management firm-related issues. Leadership styles also have a significant impact on
HOA effectiveness in solving management firm-related problems. As expected,
considering China’s political condition, HOAs with “community builder” and
“entrepreneur” leaders who focus on neighborhood capacity building tend to be more
effective in solving management firm-related issues than organizations with
“protestor” and “ombudsman” leaders who focus on changing and transforming local
government practice. This demonstrates that building neighborhood self-governing
capabilities and mobilizing internal resources are better strategies for solving
property management problems. However, these factors do not have a strong
relationship with effectiveness in solving developer-related issues. This reflects the
difficulties in dealing with property rights disputes by self-governing neighborhood
organizations alone.

The factors that exhibit significant impacts on HOA effectiveness in solving both
types of problems are local governments’ attitudes toward HOAs and the degree of
HOAs’ financial dependence on management firms. Governmental attitudes toward
HOAs are found to be critical to HOA problem-solving effectiveness. This finding
demonstrates that the Chinese government plays an important role in addressing
property rights-related conflicts when no grounded legal rules define property rights
and no effective market mechanisms regulate business behaviors. Its impact on

219
management service delivery effectiveness reflects the strong power of the Chinese
government in intervening in neighborhood governance.

The degree of HOAs’ financial dependence on management firms—the amount of
available operating funds and the autonomy in using these funds—has significant
impacts on solving both types of issues. The amount of available money is critical to
solving property management-related issues regardless of who manages the money.
However, whether the HOAs have full discretion over the use of the money is
important in solving developer-related issues no matter how much money the HOAs
have. Such findings again show the fundamental difference between these two types
of problems. Developer-related issues reflect zero-sum economic interest conflicts
between developers and homeowners. To resolve any developer-related problems—
such as construction defects, the shrinking of apartment unit areas and the occupation
of common properties—developers need to invest more money or relinquish huge
profits from the commercialization of neighborhood common assets. As a result, if
they have no discretion over the use of their money and must obtain money from
property management firms, HOAs may not be able to get financial resources to
oppose developers because management firms normally have close connections with
developers. As highlighted in Chapter 3, most HOAs do not have their own accounts
because they do not have the legal right to open and own a bank account as a legal
entity. The absence of laws that guarantee HOAs’ legal rights greatly has impeded

220
their capability of addressing developer-related issues. This must be addressed if
HOA monitoring and developer discipline are desired.
21

In contrast, the amount of available money, regardless of who manages the money, is
critical to solving property management-related issues. Different from developer-
related issues, management firm-related issues involve many neighborhood service
problems, which do not necessarily reflect zero-sum conflicts between the two
parties. Sometimes, it is possible to achieve win-win results. For example, if an
HOA Committee lacks autonomy in managing association operating funds and
decides to update the neighborhood security facilities, the property firm more likely
will support this decision on the use of the money. Therefore, who controls the
money is less important than the amount of money HOAs have in affecting the
effectiveness of solving property management issues.

This study suggests that Chinese HOAs could successfully improve property
management services and advance property rights through developing more
organizational resources, such as mobilizing more active members and gaining more
available financial support. Attention also needs to be paid toward creating
communication channels with other neighborhood organizations, such as Residents’

21
HOA monitoring can be a third way of disciplining real estate developer practices beyond
regulatory and market mechanisms.

221
Committees and local governmental agencies. It is of interest to note that although
they do not have authority granted through laws, HOAs have exercised considerable
power in resolving neighborhood issues. Their power stems from grassroots resident
mobilization and support. This study finds that current regulations impede the
problem-solving ability of HOAs. However, HOAs that develop greater
organizational resources demonstrate a higher degree of success in resolving
problems than HOAs lacking mobilizing organizational resources. This finding
suggests that neighborhood-based governance is a viable way to resolve
neighborhood issues. Given their close relationship to neighborhoods, HOAs may be
a better and more effective approach for addressing neighborhood-related issues
compared to traditional regulatory approaches. To this end, more favorable external
institutions must be created in light of the discussion in Chapter 3.

The literature concerned with the social consequences of private associations has
focused on two categories of outcomes: direct outcomes and indirect outcomes
(Cress & Snow, 2000). Direct outcomes refer to the achievement of intended goals
of activities, such as securing members benefits and winning advantages from targets
of influence (Piven & Cloward, 1992). Indirect outcomes reflect the influences of
association operations and activities, such as changing policy decision-making
processes (DeSario & Langton, 1987), inculcating civic virtues (Warren, 2001),
improving citizens’ participation skills (Cohen & Rogers, 1995; Verba et al., 1995)

222
and facilitating public deliberation (Habermas, 1996) through face-to-face talk
(Pateman, 1976).

As newly emerging neighborhood organizations that operate under unfavorable
institutional environments, most Chinese HOAs have demonstrated direct influence
on improving neighborhood life by solving neighborhood issues and protecting
common interests with more or less effectiveness. Whether HOAs have indirect
influence on improving residents’ civic virtues and behaviors and how they impact
residents warrant further empirical exploration.

The third research question is on the internal governance life of Chinese HOAs and
what governance aspects are the most crucial in increasing resident civic awareness
and participation. In Chapter 5, I examined these associations’ internal political lives
and provided evidence for the congruence thesis––neighborhood associations with
more democratic internal lives are more likely to promote civic awareness and
resident participation in neighborhood governance (Rosenblum, 1998) . I found that
most HOAs in Beijing operate with democratic principles. They created a variety of
governing structures to involve resident participation even if governmental rules do
not specify such structures. Most HOA Committees open their meetings to all
residents. Many committees make significant efforts to communicate with residents
and ask for input from residents. Most HOA leaders serving in leadership positions

223
are motivated by the ability to contribute to the neighborhood rather than self-interest.
Many of them trust residents’ ability to self-govern neighborhood affairs and to
increase governmental responsiveness to neighborhood needs.

These findings are striking because the Chinese authoritarian tradition does not
provide cultural support for citizen participation nor does the current political system
provide institutional support. The restrictive and unfavorable environment may be
one of the reasons that Chinese HOAs operate in a democratic way. HOAs are not
granted authority by law, which forces them to obtain legitimacy and to define their
authority through a bottom-up democratic process involving residents. Moreover,
HOAs have less economic, political and information power (Purcell, 1998)
compared with local governments, developers and property management firms.
Therefore, they need to develop organizational power from member support and
involvement. Establishing more open and democratic internal governance is an
effective way to mobilize resident participation and obtain more organizational
power.

This study contributes to the literature by providing empirical evidence on the
congruence thesis that associations with a more democratic internal life are more
likely to promote civic awareness and neighborhood participation. The factors that
have significant impact on increased civic awareness and resident participation

224
include a formalized and democratic governing structure, frequent communication
between the committee and residents, and the leaders’ strong belief in resident civic
efficacy. The findings suggest that in neighborhoods with a large number of
households that normally have difficulties with active resident participation, Chinese
HOAs need to develop elaborate governing structures, such as a representative
assembly system, to encourage residents to participate in neighborhood governance.
Moreover, HOA Committees should make more of an effort to communicate with
association residents.

This study also suggests that Chinese HOAs may play an important role in
improving citizen participation and achieving local democracy. The establishment of
HOAs is not driven by improving democratization processes in China, and HOAs
might not lead automatically to political democracy in China in the short run.
However, they could promote direct citizen participation in a liberalized environment
and achieve neighborhood democracy by cultivating an awareness of civic rights and
providing civic education. Self-governing Chinese HOAs represent a real
manifestation of civil society in China (Read, 2003; Saich, 2000). According to his
study on direct elections in rural villages, O’Brien (2001) proposed that self-
governing organizations could serve as “a breeding ground for citizenship rights” (p.
416). If the channels of participation are unclogged, a growing public discourse can
emerge among people over time, and residents can learn civic skills through

225
participating in local public affairs. This study suggests that Chinese HOAs could
provide opportunities for residents to receive civic education and practice civil skills.
If provided a more liberal institutional environment, Chinese HOAs can perform
more social functions, such as delivering neighborhood services in response to
neighborhood needs and advancing democratization in China.

6.2 Limitations and Future Research
Several limitations of this study make the generalizations of the conclusions
somewhat problematic, but they also point to potentially fruitful directions for
further investigation. First, this empirical study focuses on HOAs in one city.
Although the City of Beijing is representative of cities in China where HOAs have
developed rapidly during the urbanization process and vary greatly in operating
processes, the findings reported here might not apply to other cities in China. This
could be addressed by future studies that examine HOAs in other cities in China.
Multi-city studies also would provide additional understandings of the impact of
larger political and economic contexts on the internal operations of neighborhood
associations.

Second, the interviewees in this study consist mainly of HOA leaders. Thus, the
conclusions may reflect primarily the perspectives of HOA leaders. This result may
not provide a complete picture of the social impact of Chinese HOAs. Interesting

226
future research would be to survey residents to see their perspectives on social
functions and the role of HOAs in neighborhood life and local democracy. The
results of resident survey will complement this study.

Third, the sample size is relatively small with only 92 organizations. Although it
already covers about 30 percent of all HOAs established by 2005 in Beijing, a larger
sample would contribute to better generalizations.

Finally, this study has left several other interesting questions unexplored. For
example, first, Chinese HOA members mostly are middle-class professionals. It is of
importance to understand whether such grassroots organizations could play a more
active role beyond neighborhood governance, such as in promoting public policy
decision-making processes and changing governmental practice. The answer to this
question has significant implications for the future of transitional societies like China
and therefore deserves further investigation. Second, Chinese HOAs currently focus
more on defending property rights due to the lack of property rights laws. As
discussed, this focus has dominated HOA agendas and significantly has affected
their internal governance. What other social functions HOAs could carry out after
property rights are well established remains unknown. The Property Rights Law of
the People’s Republic of China recently came into effect on Oct. 1, 2007. The

227
impact of this law on HOA internal governance and social functions is not clear and
needs exploration in future studies.

228
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Appendix 1: Survey on Homeowner Associations’ Governance Ability

The answers you provided will be used to study the development of homeowner associations
(HOAs) in Beijing. Your response will be kept strictly confidential and your name will
never be associated with your answers. Please answer all open-ended questions as fully as
possible. Thank you again for taking the time to fill this survey out.

Section I. To begin with, I would like to ask you a few questions about the basic
characteristics of your neighborhood.

1. Neighborhood Characteristics:

1.1. What is the name of your neighborhood? ______________________________

1.2. What is the address of your neighborhood? _____________________________

1.3. Under which Street Office is your neighborhood governed? ______________________

1.4. What is the name of the developer of your neighborhood? ________________

1.5. What is the name of the property management firm which provides services to your
neighborhood? _______________________

1.6. What is your neighborhood property management area (unit: 10,000 m
2
)? _____________

1.7. In general, what types of homeownership in your neighborhood? (choose as many as
apply)
(1) _____Commercial housing bought by individuals
(2) _____Commercial housing bought by Work Unit
(3) _____Economic Housing
(4) _____Relocated individuals
(5) _____Reformed Public Housings

1.8. In general, what types of buildings in your neighborhood? (choose as many as apply)
(1) _____High-rise tower
(2) _____High-rise flatted building
(3) _____Low-rise flatted building (less than 10 floors)
(4) _____Townhouse
(5) _____Detached houses/Villas

1.9. What is the approximate number of households in your neighborhood? _______________

1.10. When did the first unit owner move in the neighborhood? ______________

1.11. What was the average selling price of the house units (RMB/m
2
)? _________, in what
year? _______ And how about the current average housing price per square meter?
_________

243
1.12. Does your neighborhood have a residents’ committee?
(0) _____No
(1) _____ Yes

1.12.1. If yes, is the residents’ committee located within your neighborhood?________

1.12.2. Do you know how many members in the residents’ committee? _________

1.12.3. How many homeowners in the residents’ committee? _________

1.13. Is there any type of neighborhood organizations in your neighborhood? (choose as many
as apply)
(1) _____Community service station
(2) _____Homeowners’ group
(3) _____Other organizations (such as Party Branch), please specify _________ _______

1.14. Does your neighborhood have an Homeowner Association?
(0) _____No
(1) _____Yes

Section II. I would like to know some specific information on the characteristics of your
association, including HOA Committee, meetings, governance structure, association
relations with other institutions and resources.

2. Homeowner Association (HOA) Characteristics

2.1. When was your HOA preparatory group established? _____(year), _____(month)

2.2. How many members in your HOA preparatory group? __________; except homeowners,
how many representatives from following parties?
The developer: ____________________________
The property management firm: ______________
The Residential committee:__________________
Street Office: ____________________________
Police station: ____________________________

2.3. How did your HOA preparatory group receive the unit owner’s list?
(1) _____Door-by-door collection by homeowners
(2) _____Provided by residents’ committee or Street Office
(3) _____Provided by the property management firm or the developer
(4) _____Provided by District Housing Administration Department
(5) _____Others (specify_________)

2.4. During the preparation and registration process, did you receive support from any
following organizations?
(1) _____Developer

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(2) _____Property management firm
(3) _____District Housing Administration Department
(4) _____Street-level government agencies, such as Street Office
(5) _____Residents’ Committee
(6) _____Others (specify)

2.5. During the preparation and registration process, did you meet obstacles made by any
following organizations?
(1) _____Developer
(2) _____Property management firm
(3) _____ District Housing Administration Department
(4) _____Street-level government agencies, such as Street Office
(5) _____Residents’ Committee
(6) _____Others (specify)

2.6. When was your first general membership meeting hold? _____________________

2.7. When did you submit the registration application? ______________And when did your
organization registered successfully? ______________

2.8. Was your Homeowners’ Covenants revised?
(0) _____No
(1) _____ Yes

2.9. Was your organization’s Rules and Procedures revised?
(0) _____No
(1) _____ Yes

2.10. How many members in your HOA Committee? _______; among them, how many director
and vice directors? _______

2.10.1. How long is your Committee director’s term? ______________________

2.10.2. How does a person become a Committee director in your association?
(1) _____Elected by the HOA general meeting
(2) _____Elected by the HOA committee

2.11. Does your association have any following structures? (choose as many as apply)
(1) _____Sub-committees, task force, etc
(2) _____Building captain system
(3) _____Monitoring/Overseeing group
(4) _____Homeowners’ representative system

2.12. How many general membership meetings did you hold since the establishment of your
HOA? ___________Among them, how many are regular meetings? ___________; and
how many are temporary meetings? _________________________

245
2.13. Are your committee meetings conducted in a regular manner or according to the
emergence of neighborhood issues?
(1) _____Regular meetings
(2) _____Temporary meetings
(3) _____Both (1) and (2)

2.13.1. If you chose (1) or (3), how often do you hold a regular committee meeting?

2.13.2. Do you hold the regular committee meetings on time?
(0) _____No
(1) _____Yes

2.14. How many committee meetings did you hold in the past 12 months?

2.15. On average, how many committee members attend the committee meetings?
Average number of members who attended the committee meetings: _________________

2.16. How would you describe the amount of agreement or disagreement which characterizes
your committee meetings? Would you say there is:
(1) _____Disagreement on all or almost all issues
(2) _____General disagreement on most issues, which occasional agreement
(3) _____General agreement on most issues, with occasional disagreement
(4) _____Agreement on all or almost all issues

2.17. When disagreements do occur, in general, how does your committee reach a final
decision?
(1) _____By one-man rule, i.e. committee director/vice director made final decision
(2) _____By majority rule, i.e. bring issue to a vote

2.18. Is your committee meeting open to all the general members?
(0) _____No
(1) _____Yes

2.18.1. If yes, what is the range that general members attended your committee
meetings? Range from_________ to _________(persons)

2.19. Did you hold any HOA extended committee meetings to ask for inputs from the general
members?
(0) _____No
(1) _____Yes

2.20. As for the replacement of the committee members, how many directors did your
committee elected? _________ directors; And how many committee members resigned
or supplemented? __________members

2.21. Did you consult with any following institutes?

246
(1) _____Law firms
(2) _____Accounting firms
(3) _____Measurement institutes
(4) _____Community service institute (such as bidding institute)
(5) _____Others (specify)

2.22. How many newsletters or working report did your committee send to all the members in
the past 12 months? ___________________________

2.23. How many public notices, including decision making notice and asking for inputs, did you
post in the past 12 months? ___________________________

2.24. How many social activities, such as New Year party, sports teams, and beautification
projects did you host or sponsor in the past 12 months? ___________________________

2.25. Does your homeowner committee have an office?
(0) _____No
(1) _____Yes

2.25.1. If you have an office, do you know who own the office?
(1) _____All the owners
(2) _____Developer
(3) _____Property ownership is unclear

2.26. If your committee has office supplies (telephone, fax machine, computer etc), how did you
get them?
(1) _____Committee bought them by their own
(2) _____Reimbursed from the property management firm
(3) _____individual owners’ donation
(4) _____Committee members’ donation
(5) _____Others(specify)

2.27. Does your association have a meeting space?
(0) _____No
(1) _____Yes, owned by HOA itself
(2) _____Yes, borrowed from residents’ committee
(3) _____yes, borrowed from property management firm

2.28. Does your association have any full-time or part-time staff or members who work
regularly during the week for several hours or more, with pay?
(0) _____No
(1) _____Yes

2.28.1. If yes, how many sectaries, professional consultants and other staffs in your
association? Sectary:_____; Professional consultant_____; Others_____

2.28.2. If yes, what is the source of funding? _________________

247
2.29. Does your association have following common revenue?
(1) _____Advertisement (Wall, elevators, etc.)
(2) _____Common area renting
(3) _____Parking fees
(4) _____Others (specify)

2.30. What is your association’s approximate annual revenue? ________________

2.30.1. If you have revenue, what are the revenue sources? (choose as many as apply)
(1) _____Fixed percentage of property management fee
(2) _____Common revenues
(3) _____Funding for establishing Property Management Committee
(4) _____Fixed dues from owners
(5) _____Individual owners’ contribution

2.30.2. If your association has revenue, who manage it?
(1) _____HOA Committee itself
(2) _____Property management firm
(3) _____Others (specify)

2.30.3. If your association has revenue, do you have a banking account?
(0) _____No
(1) _____Yes, committee’s independent account
(2) _____Yes, under the name of the property management firm
(3) _____Yes, personal account by some committee member or others

2.30.4. If your association has revenue, how do you decide to use the money?
(1) _____According to HOA general membership meeting’s decisions
(2) _____According to the HOA Committee’s decisions

2.31. Below questions are regarding the information of your committee members:

2.31.1. The committee includes ____ male members and ____ female members.

2.31.2. The committee members’ occupations include: (choose as many as apply)
(1) _____Public servants (central/city/district governments)
(2) _____Lawyers
(3) _____Managers of large business organizations
(4) _____Self-own business
(5) _____Community activists
(6) _____Professionals in real estate development
(7) _____Professionals in property management Others
(8) _____Professionals in Accounting, auditing, etc.
(9) _____Architects
(10) ____Researchers/Professors
(11) ____Others (specify)

2.31.3. Ages of the committee members:

248
(1) 25-40, including _____persons
(2) 41-50, including _____persons
(3) 51-60, including _____persons
(4) Over 60, including____persons

2.31.4. On average, how many hours do the committee members work for your
association per week? ___________hours/week.

2.32. How often do your director/vice directors communicate with other committee members?
__________/month.

2.33. How do your director/vice directors communicate with other committee members?
(1) _____Face-to-Face
(2) _____Phone
(3) _____Text message
(4) _____Online forum
(5) _____Email
(6) _____Others (specify)

2.34. How often does your HOA Committee communicate with the Residents’ Committee?
__________/month.

2.35. How do you describe the attitude the residents’ committee toward your HOA committee?
Would you say it is:
(1) _____Supportive, always direct/coordinate HOA’s work
(2) _____Neutral, not contact frequently
(3) _____Not supportive most of the time
(4) _____Not supportive/Not direct HOA’s work at all

2.36. How often does your committee communicate with the property management firm?
__________/month.

2.37. How do you describe the attitude the property management firm toward your HOA
committee? Would you say:
(1) _____It always communicates with and ask for advice from your committee
(2) _____It moderately coordinates your work
(3) _____It does not coordinate with your work at all
(4) _____It is always adversarial to your work

2.38. How often does your committee communicate with the local governmental agencies (such
as Street Office, District Housing Administration Department)? __________/year.

2.39. How do you describe the attitude the local governments toward your HOA committee?
Would you say it is:
(1) _____Supportive
(2) _____Always delaying
(3) _____Always quibbling

249
(4) _____Others (specify)

2.40. According to your past experience of communicating with local governmental agencies,
which agency gave you a lot of support? Which agency established many obstacles to you?
Which agency you would like to turn for help most?
The most helpful agency is __________________________________
The most obstructive agency is _______________________________
The agency you most like to turn for help is ____________________

2.41. How many HOAs have you contacted and communicated with? ______________

2.41.1. Why did you contact with other HOAs?
(1) _____Exchange experience and information
(2) _____Share meeting space
(3) _____Share/borrow staffs
(4) _____Others (specify)

2.42. Some community research institutes (e.g. Community Governance Institute) or other
organizations hold some meetings for education, information exchange, discussion that
aims to bring homeowners together. How many workshops/seminars did your
director/vice directors attend? ______________

2.43. About how many persons are “active” in your association, that is, who attend your
committee meetings, contribute their time, energy, money, advice and other personal
resources to support your work in the past 12 months? ______________

2.44. Did homeowners inquire about the legitimacy or decision-makings of your committee?
(0) _____No
(1) _____Yes, on _________________aspect.

2.45. Does your committee establish organizational rules/bylaws?
(0) _____No
(1) _____Yes

2.45.1. If yes, what kinds of organizational rules do you have? (choose as many as
apply)
(1) _____HOA Committee operation rules
(2) _____HOA seal using rules
(3) _____HOA file management rules
(4) _____HOA staff working rules
(5) _____ Others (specify)

2.46. Have your organizational rules mentioned above been implemented by the committee
members?
(1) _____Yes, all are implemented strictly
(2) _____Yes, but not strictly implemented
(3) _____No

250
2.47. Who is in charge of using the organizational seal?
(1) _____Director
(2) _____Vice Director
(3) _____One of committee members
(4) _____Staff
(5) _____Others (specify)

2.48. How can you use the organizational seal?
(1) _____If director/vice director agree
(2) _____If the majority of committee members agree
(3) _____If all the committee members agree
(4) _____Others (specify)

2.49. Does your association keep record when you use the seal?
(0) _____No
(1) _____Yes

2.50. Does your association keep files (such as meeting minutes)?
(0) _____No
(1) _____Yes

2.51. Where do you keep the files?
(1) _____HOA Office
(2) _____Director’s home
(3) _____Committee member’s home

2.52. Who is the file keepers?
(1) _____Director
(2) _____Vice director
(3) _____Committee members
(4) _____Staff
(5) _____Others (specify)

Section III. I would like to know some general information about property management
firms that have provided services to your neighborhood.

3. Property management firm Characteristics

3.1. How many management firms have provided services to your neighborhood? __________

3.2. Does your committee sign the contract with current management firm?
(0) _____No
(1) _____Yes

3.3. Did you sign the temporary contact with any management firms?
(0) _____No
(1) _____Yes

251
3.4. Did you ever select a management firm by open bidding process?
(0) _____No
(1) _____Yes

3.5. The former property management fee rate is ___________RMB/m
2
, and the fee collection
rate is __________; The current property management fee rate is ___________RMB/m
2
,
and the fee collection rate is __________

3.6. If your management fee was decreased, how did you make the management firm to do so?
(1) _____The management firm decreased the fee by it own.
(2) _____Negotiated with the management firm
(3) _____By legal approach
(4) _____Signed the new contract with the management firm
(5) _____Others (specify)

3.7. How do you describe the relationship between your property management firm and the
developer? _________________

3.8. Would you say the current management firm is:
(1) _____The developer designated firm and did no signed contract with your committee
(2) _____The developer designated firm and renewed contract with your committee
(3) _____The selected firm by your association

Section IV. I would like to know some general information on the common assets in your
neighborhood.

4. Neighborhood Common Assets

4.1. Do you know how much public maintenance funds does your neighborhood have?
(0) _____No
(1) _____Yes

4.1.1. If yes, how much? ________________

4.2. Who manage your public maintenance funds?
(1) _____Local government agencies
(2) _____HOA Committee
(9) _____Do Not Know

4.3. Does your neighborhood have necessary public facilities?
(0) _____No
(1) _____Yes

4.4. How many parking spots in your neighborhood? _________________ Among them, how
many ground parking spots? _________ Underground? _________

4.5. Who has the ownership of the underground parking lot in your neighborhood?

252
(1) _____Co-owned by the homeowners
(2) _____Developer
(3) _____Unclear

4.6. Who has the ownership of the building basements in your neighborhood?
(1) _____Co-owned by the homeowners
(2) _____Developer
(3) _____Unclear

4.7. Who has the ownership of the public spaces for service purpose?
(1) _____Co-owned by the homeowners
(2) _____Developer
(3) _____Unclear

Section IV. These last few questions are for specific information on the neighborhood
issues that your association faced and the actions you have taken to address the issues.

5. Neighborhood Issues In The Past Two Years

5.1. In the past two years, to what degree your neighborhood faced by following specific issues?
(Please draw 3 in the space)

A Problem
Issue Types
Specific Issues Faced by Your Neighborhood in
the Past 2 Years
Not A
Problem
Not
Serious
Serious
1. Inconvenience to schools and hospitals

2. Inconvenience to public transportation and
shopping

3. Lack of local police (e.g. public safety
problems near the neighborhood)

Government
related
4. neighborhood environment deteriorated by
the new land development

5. Breaching agreement, such as the shrink of
green space

6. Changing development plan (e.g. the
planned kindergarten was replaced by
shopping center)

7. Lack of common facilities (e.g. disappear of
heating facilities)

8. Common property rights

9. Construction defects (e.g. roof leaking)

Developer
related
10. Deed problems (e.g. the shrink of the unit
areas, deeds process delayed)

11. Water, hearting and electricity providing
services
Property
management
firm related
12. Neighborhood cleanup and beatification

253
13. Neighborhood security service

14. Neighborhood transportation and parking
management

15. Other Services (e.g. road maintenance)

16. Property management fee

17. Occupying common income, such as
advertisement and common area rents

18. Individual homeowners occupied common
area, such as stairways

19. Neighborhood sentiments

Homeowner
related
20. Using residential apartment to operate small
business

Others
21. (Please specify)

254
5.2. In the past two years, to what degree your neighborhood faced by following Please describe: 1) In the past two years, what neighborhood
issues did your committee try to resolve? 2) What of the following actions has your association/committee taken to resolve the specific issues?
3) What are the problem-solving results? And 4) And how would you rate the extent to which the problem is resolved as the result of the
variety of your actions?

The issues you tried to resolve
in the past 2 years Actions Result
1

□ Negotiation
□ Contacted governmental officials on behalf of
association in person/ write a letter/by phone
□ Consulted from professional firms
□ Arbitration/mediation
□ Group demonstration/Petition
□ Collaborated with residents’ committee
□ Contacted governments
□ Contacted media
□ Contacted other HOAs
□ Administrative process
□ Litigation
□ Others (specify)_________
Result:

Problem-solving degree:
□ Not at all resolved
□ Slightly resolved
□ Moderately resolved
□ Completely resolved
2

□ Negotiation
□ Contacted governmental officials on behalf of
association in person/ write a letter/by phone
□ Consulting
□ Arbitration/mediation
□ Group demonstration/Petition
□ Collaborated with residents’ committee
□ Contacted governments
□ Contacted media
□ Contacted other HOAs
□ Administrative process
□ Litigation
□ Others (specify)_________
Result:

Problem-solving degree:
□ Not at all resolved
□ Slightly resolved
□ Moderately resolved
□ Completely resolved

255
3

□ Negotiation
□ Contacted governmental officials on behalf of
association in person/ write a letter/by phone
□ Consulting
□ Arbitration/mediation
□ Group demonstration/Petition
□ Collaborated with residents’ committee
□ Contacted governments
□ Contacted media
□ Contacted other HOAs
□ Administrative process
□ Litigation
□ Others (specify)_________
Result:

Problem-solving degree:
□ Not at all resolved
□ Slightly resolved
□ Moderately resolved
□ Completely resolved
4

□ Negotiation
□ Contacted governmental officials on behalf of
association in person/ write a letter/by phone
□ Consulting
□ Arbitration/mediation
□ Group demonstration/Petition
□ Collaborated with residents’ committee
□ Contacted governments
□ Contacted media
□ Contacted other HOAs
□ Administrative process
□ Litigation
□ Others (specify)_________
Result:

Problem-solving degree:
□ Not at all resolved
□ Slightly resolved
□ Moderately resolved
□ Completely resolved

256
5

□ Negotiation
□ Contacted governmental officials on behalf of
association in person/ write a letter/by phone
□ Consulting
□ Arbitration/mediation
□ Group demonstration/Petition
□ Collaborated with residents’ committee
□ Contacted governments
□ Contacted media
□ Contacted other HOAs
□ Administrative process
□ Litigation
□ Others (specify)_________
Result:

Problem-solving degree:
□ Not at all resolved
□ Slightly resolved
□ Moderately resolved
□ Completely resolved
6.

□ Negotiation
□ Contacted governmental officials on behalf of
association in person/ write a letter/by phone
□ Consulting
□ Arbitration/mediation
□ Group demonstration/Petition
□ Collaborated with residents’ committee
□ Contacted governments
□ Contacted media
□ Contacted other HOAs
□ Administrative process
□ Litigation
□ Others (specify)_________
Result:

Problem-solving degree:
□ Not at all resolved
□ Slightly resolved
□ Moderately resolved
□ Completely resolved

***********Thank you for your participation!*************

257
Appendix 2: Survey on Homeowner Association Leaders’ Opinions

The answers you provided will be used to study the development of homeowner associations
(HOAs) in Beijing. Your response will be kept strictly confidential and your name will
never be associated with your answers. Please answer all open-ended questions as fully as
possible. Thank you again for taking the time to fill this survey out.

Section I. To begin with, I would like to ask you a few questions about the history of your
owner’s group and association.

1. History of your homeowner association:

1.1. Before the formation of HOA, did your neighborhood have any homeowners’ group to
protect the property rights?
(0) _____No
(1) _____Yes

1.1.1. If yes, when was the group established? _________________

1.1.2. Was its formation of a result of specific issue? If so, what the specific
issue(s) in particular?

1.1.3. Do you know to what degree that the group resolved the specific issue?
(1) _____ Not at all resolved
(2) _____ Slightly resolved
(3) _____ Moderately resolved
(4) _____ Completely resolved

1.2. Before the formation of HOA, did your neighborhood have Neighborhood Management
Committee?
(0) _____No
(1) _____Yes

1.2.1. If yes, when was the committee established? _________________

1.2.2. Was its formation of a result of specific issue or of the property management
rules issued by the Ministry of Construction?
(1) _____Specific issue
(2) _____According to property management rules

1.2.3. If the formation is issue-focused, to what degree that the Neighborhood
Management Committee resolved the specific issue?
(1) _____ Not at all resolved
(2) _____ Slightly resolved
(3) _____ Moderately resolved
(4) _____ Completely resolved

258
1.2.4. Who would you say was the most responsible for forming the Property
Management Committee? (Choose as many as apply)
(1) _____Several individual owners getting together
(2) _____Property Management Firm
(3) _____Residents’ Committee or Street Office
(4) _____Developer
(5) _____Others (specify)

1.3. Could you describe the process of the formation of your HOA Committee?

1.4. Have you met any obstacles in the formation and registration process? If yes, what kind
of obstacles you met and what the sources of the obstacles?

1.5. Have you received support in the formation and registration process? If yes, what kind of
supports you obtained and who provided support to you?

1.6. Who would you say was the most responsible for forming your HOA?
(1) _____Several individual homeowners getting together
(2) _____Neighborhood Management Committee
(3) _____Residents’ Committee
(4) _____Property Management firm
(5) _____Developer
(6) _____Others (specify)

1.7. Why do you would like to serve as HOA director/vice director?

Section II. I would like to ask you a few questions about your personal opinions.

2. Personal Opinions:

2.1. Working in this position, how do you evaluate the effectiveness of your associations’
actions for protecting homeowner rights?
(1) _____Poor
(2) _____Fair
(3) _____Good
(4) _____Excellent

259
2.2. Working in this position, how do you evaluate the problem-solving effectiveness of your
associations?
(1) _____Poor
(2) _____Fair
(3) _____Good
(4) _____Excellent

2.3. Working in this position, how do you evaluate the overall performance of your
associations (including daily operation)?
(1) _____Poor
(2) _____Fair
(3) _____Good
(4) _____Excellent

2.4. Working in this position, to what degree do you feel that residents’ attentiveness and
concern for neighborhood issues has been increased after the formation of your HOA?
(1) _____Not at all
(2) _____Moderately
(3) _____Very much
(4) _____ Extremely

2.5. Working in this position, to what degree do you feel that residents’ community
identification has been increased after the formation of your HOA?
(1) _____Not at all
(2) _____Moderately
(3) _____Very much
(4) _____ Extremely

2.6. Working in this position, to what degree do you feel that residents’ participation in
neighborhood affairs has been increased after the formation of your HOA?
(1) _____Not at all
(2) _____Moderately
(3) _____Very much
(4) _____ Extremely

2.7. If you have tried to contact with government agencies to resolve the neighborhood issues,
do you often get the response from the governments?
(0) _____No
(1) _____Yes

2.8. Do you feel that contacting with governments is helpful to your problem solving?
(1) _____Not at all
(2) _____Moderately
(3) _____Very much
(4) _____ Extremely

260
2.9. If you have tried to contact with People’s Congressmen or Political Consultative
Committee members to resolve the neighborhood issues, do you often get the response
from them?
(0) _____No
(1) _____Yes

2.10. Do you feel that contacting with People’s Congressmen or Council members is helpful to
your problem solving?
(1) _____Not at all
(2) _____Moderately
(3) _____Very much
(4) _____ Extremely

2.11. How do you evaluate the latest election process of your residents’ committee?
(1) _____Do Not Know
(2) _____Open and fare
(3) _____Procedurally open, but not fare
(4) _____Not open

2.12. Would you say that you are primarily concerned with service problems –getting better
service delivery — or are you primarily concerned with the redistribution of political
power — increased citizen participation and getting more neighborhood control?
(1) _____Service problems
(2) _____Power control

2.13. As a matter of strategy and priorities, do you feel it is more important to direct your
energies to reforming or changing the local government or do you feel it is more important
to work at the neighborhood level to develop local capacities and resources?
(1) _____Local governments
(2) _____Neighborhood level

2.14. Working in this position, to what degree do you feel that you have a strong voice, a “say”
in improving urban policy making or public service delivery?
(1) _____Not at all
(2) _____Somewhat
(3) _____Quite a lot
(4) _____Very much

2.15. Working in this position, to what degree do you feel that residents working together can
make local governments more responsive to the needs of the neighborhood?
(1) _____Not at all
(2) _____Somewhat
(3) _____Quite a lot
(4) _____Very much

2.16. Working in this position, to what degree do you feel that homeowners’ associations should
be influential on local governments’ policy decision making and implementation process?
(1) _____Not at all

261
(2) _____Somewhat
(3) _____Quite a lot
(4) _____Very much

2.17. Working in this position, to what degree do you feel that residents have the ability to self-
govern neighborhood affairs or resolve neighborhood issues on their own?
(1) _____Not at all
(2) _____Somewhat
(3) _____Quite a lot
(4) _____Very much

2.18. To what degree do you think that following different resources would be helpful to your
associations to resolve the neighborhood issues? (Please draw 3 in the space)

Variety of Resources Not at all Slightly Moderately
very
helpful
1. More participation and support from general
members
2. More participation and support from members
with expertise
3. Stronger leadership and more professional
knowledge of the committee
4. More commitment from committee members
5. More money, full-time staffs, consultants
6. More knowledge/information on regulations,
policy making procedure, etc.
7. More interactions with other HOAs
8. Support from the residents’ committee
9. Responsiveness and support from Street Office
and related District Governmental officials
10. Support from City government agencies
11. Personal relationships with government officials
12. Governments’ stronger will to implement and
enforce the regulations
13. Provision of property rights related laws
14. More enforceability of the regulations and rules
on neighborhood governance
15. Provision of more legitimacy to the HOA
committee
16. Media or public sympathy
17. Others (specify)

262
Section III. These last few questions are for your personal information.

3. Personal Information:

3.1. Which term of Committee Director are you serving? _________________

3.2. Before you serve as the Committee Director, what kind of roles did you play in the
owner’s activities? _________________

3.3. Gender
(1) _____Male
(0) _____Female

3.4. Age
(1) _____25-40
(2) _____41-50
(3) _____51-60
(4) _____ over 60

3.5. Occupation (if you are retired, please choose the occupation before you retired)

_________________

3.6. Education:
(1) _____High school
(2) _____Bachelors degree
(3) _____Graduate degree and above

3.7. Household income (RMB) every month is:
(1) _____Less than 5000
(2) _____5,001-10,000
(3) _____10,001-20,000
(4) _____More than 20,000

3.8. How long have you been living in Beijing? _________________

3.9. How long have you been living in this neighborhood? _________________

3.10. How interested are you in local community politics and affairs that are beyond your
neighborhood?
(1) _____Not at all
(2) _____Slightly
(3) _____Moderately
(4) _____Very much

263
3.11. Do you agree with below statements of the reasons you served as the HOA committee
director? (Please draw 3 in the space)

Reasons for serving as Director
Strongly
Disagree Disagree Agree
Strongly
agree
1. I want to resolve the issues I concerned
2. I am recommended by others
3. Nobody wants to do it, but there should be
someone to do it.
4. I want to do something for the neighborhood
5. I can make friends with neighbors
6. I want to run for residents’ committee, People’s
Congress or Political Consultative Committee
member
7. I felt that I can make the organization operate
better than others
8. I have management /executive expertise
9. I have more free time than others
10. I feel a responsibility/duty to the neighborhood
11. I enjoy helping others
12. I enjoy playing a prominent role in my
neighborhood
13. I enjoy to be respected by others
14. I want to gain self-governing and local politics
experience
15. To protect my and others’ consumer rights
16. To protect my and others’ citizen rights
17. Others (specify)

264
Appendix 3: Survey of General Homeowner Association Members

1. Do you know when and where the HOA Committee meetings held? Do you
attend HOA Committee meetings ever? Why or why not?

2. Do you feel well informed about your association affairs? Why or why not?

3. Could you describe the relationship between your HOA Committee and the
residents?

4. What is your opinion on current HOA Committee director and committee
members?

5. Whether and how your views on neighborhood issues have been changed
since the formation of your HOA?

6. Whether and how your views on local political and social issues have been
changed since the formation of your HOA?

7. Did you vote in the last election of local congress representatives? Are you
planning to vote next time?

Abstract (if available)

Abstract This dissertation investigates newly emerging Chinese Homeowner Associations (HOAs) and two specific social functions they serve in neighborhood governance in urban China -- solving neighborhood problems and promoting civic participation. The analysis of this study is based on data collected through face-to-face interviews with leaders and general members of registered HOAs in Beijing, the examination of various documents and participant observation of HOA affairs.

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Asset Metadata

Creator Wang, Feng (author)

Core Title The social functions of private neighborhood associations: the case of homeowner associations in urban China

School School of Policy, Planning, and Development

Degree Doctor of Philosophy

Degree Program Public Administration

Publication Date 09/09/2009

Defense Date 07/30/2008

Publisher University of Southern California (original), University of Southern California. Libraries (digital)

Tag China,local democracy,neighborhood organizations,OAI-PMH Harvest,organizational effectiveness,urban governance

Place Name China (countries)

Language English

Contributor Electronically uploaded by the author (provenance)

Advisor Cooper, Terry L. (committee chair), Cooper, Eugene (committee member), Tang, Shui Yan (committee member)

Creator Email fengusc@yahoo.com,fengwang@usc.edu

Permanent Link (DOI) https://doi.org/10.25549/usctheses-m1588

Unique identifier UC1438414

Identifier etd-Wang-2349 (filename),usctheses-m40 (legacy collection record id),usctheses-c127-114016 (legacy record id),usctheses-m1588 (legacy record id)

Legacy Identifier etd-Wang-2349.pdf

Dmrecord 114016

Document Type Dissertation

Rights Wang, Feng

Type texts

Source University of Southern California (contributing entity), University of Southern California Dissertations and Theses (collection)

Repository Name Libraries, University of Southern California

Repository Location Los Angeles, California

Repository Email cisadmin@lib.usc.edu