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Why Americans Keep Moving Into Gated Communities
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- Florida is kind of the land of gated communities. People that are buying in Florida--they want the ease of
- living. They want to live in Paradise without all the maintenance.
- Lindsey Tronolone is a realtor in Palm Beach County, Florida, a hub for luxury real estate.
- The area also boasts dozens of gated communities. Some sell waterfront condos, others have multi-million dollar
- mansions. People are moving here for the Golf.
- You're not going to pay $225,000 for a golf membership and not be using it.
- Gated communities have been popular in the US for decades, especially in warmer states like Florida,
- the southwest, or California. They attract retirees, golfers and growing families,
- and recently young professionals too. While gated communities are quite varied,
- they all offer privacy and a sense of exclusivity at a premium. The whole point of creating HOAs and possibly gating is to create
- that location premium. You're essentially, you know, creating this,
- this brand, this marketing, that this is a desirable place to live and that we will maintain it that way.
- But there are some drawbacks, like high homeowner's association and membership fees, as well as restrictive policies.
- They can also lack in diversity. You're paying a premium for living in a homogeneous environment.
- So why are gated communities so popular in the U.S.? And are they worth the higher price tag?
- CNBC toured three gated communities in Florida to learn more. The practice of gating and walling cities is as old as city building
- itself. Yet the modern-day gated communities started spreading in US suburbs in the 60s as violent crimes rose between 1975 and 1980.
- About 400,000 retirees moved to Florida, seeking lower taxes and better weather.
- Gated communities were developed to meet their needs. As years passed, they continued to evolve.
- After the Great Recession, being associated with exclusivity and luxury didn't really work well for their business model.
- Gated communities have increasingly been focusing on sort of marketing themselves as more middle-class, average American communities.
- We've got families that want to live in the gated communities because they're zoned for A-rated schools.
- Now, in this market, it is a mix. Data on the exact number of gated communities in the US is limited,
- and the Census Bureau groups anything in a secured space together. That includes trailer parks and public housing.
- What we do know is that the number has been increasing for decades in other countries, especially the developing world
- with higher rates of violent crimes. Safety is the main draw of a gated community.
- It's a little different in the US. I think it's a little bit less tied to an actual need for security and
- more to control access to the community. Maybe to restrict access to amenities that are there for the
- residents. This community, Bay Reach in Lake Park,
- Florida, has been around since the 80s. There are currently six properties up for sale,
- including one of Lindsey's listings at $419,000 for a two-bedroom unit. This is a two bedroom, two bath just under 1000ft².
- It also comes with a 30-foot boat slip and a one-car garage. Just over seven miles away is PGA National,
- and its six golf courses. One hosts the annual PGA Championship.
- There's also a hotel, spa, pool and dozens of other amenities. The price range varies; anything from a $200,000 condo to a
- $2 million estate. And as of late June 2025, the community had 116 public
- listings. What you're seeing behind me here is the main clubhouse pool.
- We've also got at least three full-service restaurants here. Also, there's a coffee bar, and in the middle,
- there's the Ibar. Frenchman's Reserve, around five miles northeast of PGA,
- is one of the most high end gated communities in the area, open only to residents and their guests.
- The average home here sells for about $3.9 million. These are typically going to be either full-time residents or
- second homes for the person who's using them, or third homes or fourth homes.
- There are more specific luxury amenities, I would say, in my opinion, in Frenchman's Reserve.
- So not just your your pool, your tennis court, you know, your pickleball court. They also have an onsite spa,
- a hair salon, a nail salon. They've got a full 24 over seven weight room with personal trainers.
- Nationally, homes in gated communities are on average about 5 to 10% more expensive than homes in non-gated neighborhoods in the same
- area. This number can be 15 to 20% on the highest ends, but that's not considering the additional fees that come with
- living in these communities. Every gated community has an HOA that collects monthly fees and
- facilitates upgrades, yet it can also dictate things like the color of your house or how many cars can be parked on the street.
- People who would not be a good fit for a gated community are people that don't like to be told what to do with their property.
- HOA fees for the three communities CNBC visited range, according to upkeep and amenities.
- Every HOA is different, but in the well-maintained, popular ones, that's why people keep coming back.
- That's why homes are selling off market quickly, because people want to live there, because they know their investment
- is going to go the distance there. This home at Frenchman's Reserve sold in 2020 for $1.4 million.
- It is now in the market for about $3.6 million. That's about a 5% higher appreciation rate than the national
- average. That's why people are paying. To live here is to have the golf and
- the spa and the kids club and the, you know, on call, concierge style service.
- Aside from HOA fees, there are also membership fees, which can be tiered like at PGA at Frenchman's Reserve.
- Membership is mandatory and cost between $115,000 and $225,000, and there are additional fees beyond that.
- While not always the main reason why an American seeks out a gated community, security is a defining feature.
- Some gates are manned, while others are not. If you're going to pay an HOA, do you perceive that it's for
- something that's a value to you? If the HOA is only for some gated entrance with a guard who checks
- people in and out, and there's no other amenity that might start to opt out, some people for whom that's not
- really a value. Hoa rules around renting make it hard to turn most of these homes
- into investment properties. After Covid, a lot of gated communities in Palm Beach County
- put strict limits in place. If you're someone who wants to rent, maybe wants to do an Airbnb
- option, You cannot do that in a gated community. Can't do it in an HOA. You have to have a standalone property.
- One common critique is that gated communities can be isolating. There's a lot of people that say, yeah, I don't I don't want to live
- in a country club community or behind a gate or behind a wall, or I want my kids to meet people from other,
- you know, backgrounds, or I want to go to the community pool and not have my own so that they meet kids.
- We're really seeing a priority set on gathering and making it an environment that invites people to come hang out and enjoy it.
- Even the older communities are turning over and kind of revamping their social settings, which I think is really kind of
- driving where the market is turning. A recent trend has been coupling gated communities with master
- planned communities. It's a way for developers to try to capture more of the market that has
- led to more economic and social diversity. The pandemic sparked corporate migration from the Northeast to
- South Florida, and as a result, a lot of young professionals continue to relocate there.
- And some have been buying into gated communities. They're not usually in their house for that long, and they want to
- just have the security of not having to worry about the upkeep, the maintenance. You know, they're here to work and then move
- somewhere else. While security is a big draw for some,
- for others, it's the access to a community and to the amenities within the gate.
- A lot of these communities are kind of turning towards this. Stay here. Don't leave to go to dinner or drinks or gym or pool or.
- You know, we have it all right here. No reason for you to leave. Invite your friends. Show them how great it is. And let's make this a
- bubble that people want to be a part of.
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