PUD (Planned Unit Development): What It Is And How It Differs From Other Types Of Housing

What is a planned unit development (PUD)? Keep reading to understand the pros and cons of a PUD to help you determine whether you want to live in one.

In real estate, a planned unit development refers to a small community that can contain many types of single-family homes, like townhomes or condominiums. Everyone who lives in a PUD home is part of a homeowners association (HOA) which is run by a board of directors usually made up of individuals from the community. An HOA typically runs a PUD, and all residents must join and contribute to HOA fees.

Real estate developers traditionally design a PUD as an interactive neighborhood to contain a mix of housing, office buildings, shopping and recreational activities. A PUD may also even contain other types of amenities like storage facilities and religious institutions.

Does a PUD property and an HOA sound like one and the same? It might! However, one key difference exists between a PUD and an HOA, and that has to do with who owns the land on which the property sits. PUDs offer a more traditional landowner rights structure than HOAs – in a PUD, individuals own their home, lot and common areas.

Everyone in a PUD home is automatically part of an HOA. HOAs impose specific regulations on residents. For example, an HOA might enforce strict rules on pets, parking and even the look of the exterior of your home. HOAs aim to keep up property values and make sure all homes look similar and tidy.

t’s important to understand the role an HOA plays in the other types of single-family homes in a PUD.

Townhouses

You may recognize townhouses as multi-floor homes that share one to two walls with adjacent properties but have their own entrances. In an HOA-run townhome, the association owns the land on which the townhouse sits.

Condos

A condominium, or condo for short, involves an individual unit within a building of other units. Condo owners jointly own areas such as pools, garages and gyms. The same difference exists between HOA-run townhomes and PUD townhomes – the HOA owns the land on which the structure sits.

Living in a PUD presents some perks and drawbacks. Take a look.

Pros

• Private amenities: PUDs can offer more private amenities and common ground than a typical HOA, such as grocery stores, restaurants, privately owned roads and more. Other amenities could include parks, playgrounds, swimming pools and workout facilities.
• Land ownership: In a PUD, a homeowner owns their building and land rather than the homeowners association. PUDs allow more freedom of use within certain guidelines.
• Convenience: Residents of a PUD can walk, bike or drive a short distance to any one of the amenities offered by the PUD. Many PUDs also offer walking trails, extensive sidewalks, bicycle paths and wide roads so you can get around easily.
• Affordable amenities: PUDs may provide amenities at a lower cost compared to amenities you might find in other communities. Residents may also pay less for street construction, utilities and maintenance costs.

Cons

• HOA fees: All residents of a PUD must join the HOA and contribute to its fees.
• Restrictive covenants: PUDs may have varying degrees of restrictive covenants that some homeowners may feel limit their autonomy. These covenants can impose regulations on home appearance, landscaping, home additions, quiet hours, pets and use of public spaces.
• Proximity to other houses: Homes may be located much closer together than in some more traditional HOAs or neighborhoods. Those not wishing to be too close with their neighbors might want to reconsider.
• Buying and selling challenges: PUD real estate can invite unique challenges. You may find it more difficult to buy and sell a PUD. A PUD with multiple available units can drive down the price and make your home harder to sell.

If you like the idea of living in a small community that offers many types of dwellings and lots of amenities, then you might like living in a PUD.

Just remember that an HOA typically runs a PUD and all residents must join and contribute to HOA fees. Make sure you feel comfortable with the requirements and ask questions before you buy.

Take the first step to become a homeowner and apply today for approval with Rocket Mortgage®.