Guide to Planned Unit Developments: Pros and Cons of PUDs

A planned unit development (PUD) is a mixed-use residential community that offers residents the benefits of traditional homeownership with additional conveniences such as access to retail stores, recreational spaces, and even schools. Commonly built in suburban or urban areas, PUDs can consist of single-family homes, [condominiums](https://www.masterclass.com/articles/what-is-a-condo), or [townhomes](https://www.masterclass.com/articles/what-is-a-townhouse-explained). Property owners in PUD communities own their house and the lot it is built on and are usually required to belong to a [homeowners’ association](https://www.masterclass.com/articles/homeowners-association-guide) (HOA) or similar governing organization. They pay HOA dues to access and maintain the amenities and landscaping in common areas. The HOA may also set ground rules around subletting, upkeep, parking, and visitors that residents must follow. Property owners enjoy many distinct conveniences unique to PUD living: - __Convenience__: One of the major selling points of living in a PUD is convenience. These communities are designed to be like self-sufficient small towns. From access to recreational facilities, like swimming pools, tennis courts, or gyms, to convenient shops such as groceries or pharmacies, PUD residential developments aim to make life as convenient as possible. - __Community__: Another added benefit of these amenities is ample space and opportunity to socialize with your neighbors. PUDs can foster a tight-knit community, which can be especially beneficial for young families or retirees. - __Land ownership__: People who purchase a home in a PUD own the dwelling and the plot of land it sits on. The ability to own the house and the land make PUDs more like traditional homeownership than condo or townhouse ownership. - __Maintenance__: PUDs generally take care of the maintenance in common areas, ensuring the community stays clean and welcoming. Some PUDs may even provide maintenance for individual unit owners’ yards. Here are a few drawbacks of living in a planned unit development: - __Fees__: The myriad benefits of living in a PUD home come at a cost. Even though a PUD often offers various housing types at different prices to fit your budget, most still require owners to pay monthly HOA fees on top of property costs to maintain the common areas and open spaces. - __Regulations__: The rules and regulations governing a PUD come with many benefits that alleviate some responsibilities of homeownership, but these rules may be too restrictive for some potential residents. Although the strictness varies from PUD to PUD, some homeowners may find these guidelines, which can regulate everything from guest parking to home exteriors, to be too paternalistic. If you dream of a brightly colored home or a flamboyant garden, a PUD property may not be for you. - __Space__: Housing units in PUDs are commonly built close together, which means proximity to your neighbors. Some might enjoy the community this can foster, while others might prefer living in a location where privacy and land are in ample supply. - __Zoning__: From a [real estate developer’s](https://www.masterclass.com/articles/what-is-a-real-estate-developer) perspective, one drawback to building a PUD is that the zoning laws are more complicated than standard zoning laws. The mix of residential, commercial, and recreational spaces can add extra bureaucratic steps and costs and time for completion. These zoning regulations may also affect how mortgage lenders consider your loan application and the type of loan you qualify for. While both relate to homeownership, some key distinctions exist between a planned unit development and a homeowners’ association. PUDs are akin to a self-contained town, complete with residential and commercial areas, and typically include an HOA or similar governing organization that requires membership for all residents. Since it is mixed-use, a PUD is subject to different zoning ordinances than other residential communities. HOAs, on the other hand, is a self-governing organization that sets rules and regulations for a specific neighborhood and handles maintenance and upkeep. HOAs elect board members from a pool of residents to make decisions for the community and run the day-to-day operations of the commons areas. HOAs typically require homeowners to pay monthly dues to finance their goals for the community. All you need is a [MasterClass Annual Membership](https://www.masterclass.com) and our exclusive video lessons from prolific entrepreneur Robert Reffkin, the founder and CEO of the real estate technology company Compass. With Robert’s help, you’ll learn all about the intricacies of buying a home, from securing a mortgage to hiring an agent to tips for putting your own place on the market. A planned unit development, or PUD, is a residential community with convenient access to amenities like shopping, education, and recreation.