Private Cities

This article was published in the March 1989 issue of The Freeman.

$  $  $

In recent years, the benefits of the free market have been demonstrated as governments around the world have turned to the private sector to provide services more efficiently. However, critics of the free market argue that these benefits are isolated cases—that a truly free society is unworkable and impractical. Government, the argument goes, is far better equipped to provide the services and public facilities individuals need and desire.

However, a growing number of American homeowners are unknowingly demonstrating just how far privatization can go. Planned unit developments (PUD’s) are privately developed, and primarily privately operated, communities.

PUD’s first became popular in the mid-1960s after Congress passed the 1961 Housing Act permitting the Federal Housing Administration to insure condominium mortgages. Today, nearly 30 million Americans live in approximately 100,000 planned communities, consisting of single-family homes, townhouses, condominiums, shopping centers, office buildings, and facilities to house light industry. These communities range in size from a single condominium building to huge complexes of more than 50,000 acres. PUD’s include retirement communities in the sunbelt states, all-adult communities, and communities catering to families with children. Read more