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Thirteen years later, the optimism of a California Court of Appeal seems unwarranted. As the number of residential associations has increased, the consequent litigation has arisen largely in the context of disputes between residential associations and their members over the content of frequently intrusive rules and regulations. Legal scholarship has followed this trend. Reading the endless paeans to liberty of contract, one might fail to recognize the serious externalities that accompany residential associations, affecting nonmembers who were party to no contract. Residential associations and gated communities often restrict nonmembers' freedom of speech, limit nonmembers' freedom of movement, and engage in racial discrimination against nonmembers. In identifying some of the social problems created and exacerbated by residential associations, this Note will suggest an appropriate legal framework within which these burdens may be analyzed. Variously known as homeowners' associations, gated communities, and property owners' associations,2 residential associations are an increasingly

Residential Associations as State Actors: Regulating the Impact of Gated Communities on Nonmembers