This paper explores the political, financial and environmental sustainability of private communities. Using a theoretical approach that views the private residential community as a club economy, we analyze the planning and managing practices of 219 gated residential communities in the Los Angeles area. This investigation demonstrates that private urban governance is a locally sustainable solution that might help stabilize the financing of urban growth, redevelop aging neighborhoods, maintain social diversity, conserve non-renewable urban resources, and encourage reinvestment in urban infrastructure. However, these gains are not made without social costs and spillovers. Breaking down municipal management into smaller units might deliver a more economically sustainable urban system on the whole, but only at the expense of marginalizing those excluded from the club economy. In addition, private urban governance is still dependent on state subsidy. This new urban dynamic will become more important as private associations attempt to increase the public subsidy of their activities and municipal governments look for ways to reduce their liabilities through private sector providers.postprin
