Private governance is defined as a way of providing supplementary public services through an organization of consumers who agree to tax themselves for
China ’s condominium governance 107 exclusive services (Helsley and Strange 1998). In the Western context, an HOA is considered a form of private governance, because HOAs collect assessments or fees from individual homeowners and provide them with exclusive services (Nelson 2011). These services, which are traditionally provided by the public sector, include but are not limited to trash collection, sewerage disposal, recreation, security, and maintenance (McCabe and Tao 2006). In the US, an HOA literally becomes a strong governance body in two circumstances. First, it can limit homeowners’ access to facilities and even foreclose their properties if they fail to pay their assessments. Second, it can sue homeowners if they fail to comply with the covenants. In China, homeowners of a condominium development also enjoy exclusive services. However, these services are often provided by the PMC with or without an HOA. The truth is that an HOA often emerges as a counterforce to its PMC (He 2015). Once established, an HOA often replaces the incumbent PMC with a new one. The HOA then becomes inactive until circumstances necessitate a new HOA/PMC.9 An HOA is more like a guardian of rights rather than a governing body. In addition, without full legitimacy, it lacks power to force individual homeowners to obey Management Stipulations (guan-li-giii-ytie'),10 much less foreclose homeowners’ defaulted properties. Therefore, as He (2015, 260) remarks, a "HOA in China is far from a form of private governance by Western definition.”
Self-administration is considered a prereqrhsite for a srtccessful HOA. It ensures that homeowners can use their own knowledge and experience to solve their management affairs (He 2015). It might also enhance the self-efficacy of individual homeowners and the efficacy of homeowners as a group. In many countries, an HOA is regarded as an autonomous organization that makes its own management decisions. In the US and Australia, for example, governments seldom intervene in HOA governance except for preventing and monitoring misconduct and corruption.11 In China, however, HOAs enjoy less self-administration freedom. Local governments have many avenues to intervene in its performance. Within a city territory, the municipal government crafts specific regulations for the formation and operation of an HOA. The Development and Reform Commission of the city sets benchmark fees for property management services.12 The Municipal Commission of Housing and Urban-Rural Development of the city keeps records of registered HOAs and regulates how they use maintenance funds. A residents' committee of the city supervises the formation and operation of HOAs in its territory. With these arrangements in place, the autonomy enjoyed by HOA is limited.
Whether an HOA is primarily pro-democratic or anti-democratic is still debated in the literature. The answers depend on many contextual factors. For example, in the US, Rosenblum (1997) notes that the HOA board is the incubator of politicalorganization. McKenzie (1998) stated that HOAs provide a way for local government to contact dispersed homeowners. Groves (2006) found that HOAs increase rates of participation among residents. In Hong Kong, Yip and Forrest (2002) argue that HOAs restrict rather than promote homeowners’ participation because they are unable to cultivate mutual trust, alter inequitable clauses of covenants, and protect the minority’s interests from be exploited by the majority. In China, researchers once believed that HOAs held the potential for accelerating reform of the formal political system (Read 2003; Tomba 2005; Wang, Yin, and Zhou 2011; Lo 2013; Zhou 2014; Chung 2015). They considered it as the “antecedent of civil society’’ (Xia 2003, 115). Although they now acknowledge that the development of HOAs does not meet such grand expectations, they affirm that HOAs provide opportunities for homeowners to collectively participate in condominium governance. Researchers have conducted many case studies that show how HOAs affect the publication and subsequent amendments of legislation for condominium governance; how HOAs unite and create lateral networks to gain more influence over neighborhood governance; and how HOAs enable homeowners to care more about then- local environments. They contend that China's HOA is an innovation when “the nascent civil society meets the less omnipotent yet still powerful state” (He 2015,270). However, they also recognize there is still a long way to go before the influence of HOAs transcends condominium governance and spills over into other scales of governance.