The primary purpose of an HOA is to take responsibility over common areas. For condominiums and townhouses, that’s generally the exterior of the structure(s) and any additional facilities such as pools, lawns, clubhouses. For single family homes, it’s generally to take care of common areas that are mandated by zoning laws. For example, in Glibert, AZ, zoning is such that x% of the acreage must be retention basins (any rainfall on the property cannot run off to surrounding properties - the city has no storm drains). So the HOA collects assessments to maintain, repair, and replace these things as necessary.
In addition, many people feel that city zoning is not strong enough and apply additional restrictions. This is generally done by the property developer who sets the initial CC&Rs. These commonly include things like not operating businesses out of homes. Such restrictions don’t generally affect, say, folks that operate from home offices but are directed at the guy who wants to run an auto repair shop from his garage. They may also include landscaping requirements, colors, additional structures (sheds, treehouses, etc), storage of RVs or unused vehicles, and so on.
People want these sorts of restrictions for a number of reasons, most typically to maintain their property values. You may or may not agree that such restrictions affect property values, that’s a personal value judgement. But you can easily compare market values of similar homes within and without HOAs. For most people, given two similar properties, they’d generally offer less to buy one in a neighborhood full of junked cars, weeds three feet high, and so on. Of course, everybody has different values. That’s one reason HOA rules and covenants vary so widely. For those who prefer the freedom to leave their junked cars in the front yard, or want their neighbors to have the freedom to operate a hair salon in their living room, HOAs aren’t for them.
