This 100-Year-Old Real Estate Trend Isn’t Going Anywhere (and Here’s Why You Might Love It!)

You’ve found your dream house — but you discover that it’s a part of a planned unit development (PUD). But what is a PUD? After your home hits all the non-negotiables you’re curious about — the right number of bedrooms, the correct amenities, a good price, and a solid location, figuring out what the neighborhood is like is super important. If your future home is in a PUD, you need to know what you could be getting into.

First things first: PUD neighborhoods are areas with specific, predetermined qualities and zoning designations that set them apart from other developments. You may encounter communities of condos with certain amenities, single-family homes with more green space than is typically permitted, or housing in a mixed-use walkable neighborhood — every PUD is different and unique.

First off, it’s important to note that a Planned Unit Development is quite a broad term related to zoning, and in some cases, doesn’t even involve residential buildings.

As David Morley of the American Planning Association explains, a PUD could range from a “single 110-story skyscraper to a residential subdivision of homes on half-acre lots. It has nothing to do inherently with how the land is used for. A PUD could be the Empire State Building.”

There are PUDs all across the country (the National Association of Realtors says they’ve been around since 1925!), but they’re more prevalent in some areas.

“Big cities wind up using them a lot to accommodate usually very large mixed-use projects,” says Morley, naming New York, Chicago, and Dallas as examples of cities with lots of PUDs.

No matter where they are or what they look like, Morley says the PUD process provides “a path for developers to build something that wouldn’t normally be permissible.”

Shannon Jones, a real estate agent based in Southern California, notes in an educational video that “with a PUD, you’re actually going to own the land beneath your unit as well, while you might not with a condo.” So, if this extra ownership matters to you, property within a PUD might be a good fit.

They’re larger than other residential PUDs and can include gyms, pools, parks, community events like movie nights, and even stores or schools. This level of involvement and self-containment can be appealing to some potential buyers and a deterrent for others. (MPCs aren’t the only residential PUDs to offer amenities.)

There can also be financial motivations for seeking out a PUD area. In her video, Jones says financing tends to be “a little simpler with a PUD” and that “they are also more easily eligible for FHA and VA loans.” Morley feels similarly, though notes this isn’t a universal truth: “There probably are some lenders that have more favorable lending rules for master-planned communities that have a HOA in place.”

Residential communities within a PUD tend to have a homeowners association (HOA). There are pros and cons to dealing with an HOA, but the biggest con is probably the fees, which you’ll be paying regularly in addition to any of the other regular costs associated with your home.

California-based real estate agents Nicki & Karen note on their blog that these fees could range from $100-700 a month, but there’s no real norm for them.

HOAs do help establish certain perks for residential communities, as well as manage and maintain the area, but they also set the “rules,” which may not be great news for everyone. For instance, rules about what color to paint your house may not be very appealing to a homeowner with a bold, creative decorative style.

This potential for restrictiveness is “absolutely something people should be aware of,” Morley notes. “You are bound by the private restrictions put in place, especially if you’re a renter. You have zero control. You’re just bound by those terms. They can be quite extensive: how many pets you can have, whether you can hang your clothes out to dry on a clothesline.” He adds that you do generally get to vote on these guidelines as a member of the community, but if you’re living alongside a lot of other owners or renters, that single vote might not do much.

Overall, don’t sweat the specific decision of whether or not you should live within a PUD too much. David Morley even says “your average home buyer wouldn’t really encounter the fact that they were looking at a home that’s been approved through a PUD process.”

Because each one can be so different, it’s ultimately best to just look for the home and community that makes the most sense for you, regardless of its formal zoning type. And if you are drawn to a home in a PUD, make sure you have all the information, especially when it comes to your HOA.