Their purpose is to maintain property values (via ensuring everything is kept tidy and in good shape), to maintain safety (such as ensuring potentially dangerous trash is cleaned up, plowing and salting sidewalks, etc), and to maintain public-use stuff in their jurisdiction, like parks for example. A construction company that builds a subdivision will often set up an HOA to manage it for them after they finish and pack out.
The problem for HOAs is that they have a surprisingly large amount of legal power, more than you might expect. There are stories I’ve hear of HOAs placing liens on houses owned by people who owe like 1 or 2 thousand dollars in HOA dues (one such story was about a woman who was never told the house she bought was in an HOA), and selling the house to cover those measly couple thousand bucks. And it was legal.
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