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Originally Posted by Rodney
Why would the developer do this? I'm not sure. There could be a lot of different reasons. Maybe he wants to get the HOA maintenance contract for himself, which can be a pretty penny. If the development includes some kind of group-owned feature like a golf course, he could make a pretty penny by running it. Maybe the lot sizes are below standard for the area, but smaller lot sizes are allowable for certain types of planned unit developments (like in my mother's, and in my own). That would allow him to cram in more units than otherwise. Maybe he wants to market the community in a certain way to a certain group of people, and the convenants are written in such a way to discourage certain _other_ groups of people -- young families, etc. -- from settling there.
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You are correct that a developer may want to keep ahold of the maintenance contract for himself, assuming that he owns a maintenance contractor. All of these are very valid points as to the "why" for this kind of development. There's one other that I should point out - the owners may want to hand over control of the landscaping and other kinds of maintenance. With a larger project, the fees for this kind of thing go down pretty drastically. The larger the assocation and common areas, the lower the per square foot price for the maintenance which would be covered under your dues. Also there are potential benefits for other kinds of maintenance, like window washing, street sweeping, etc. The streets and roads become private property instead of public, and the assocation can decide to fence itself off. Given that you're in Michigan, there's no reason to believe that they are doing this to avoid future litigation, like they would in say Nevada. Another reason for going this route would be to assure that the developer gets first right of refusal to build any or all of the homes, so they'll keep you from bringing in your own contractor, who may or may not do a better job or build it substantially differently than what they have in mind.