Well HOA fees go to things like maintenance of roads, maintenance of community-owned spaces (landscaping, parks, etc). When HOA fees are high covering all these things the city's taxes would normally cover, the cities have less money all around. Fractured spaces glued together.

It's basically siphoning money that would be going to public infrastructure to make private infrastructure. There's also statistical evidence that people running the boards of these HOAs don't actually select the most value-oriented bidders, they reward their family and friends.

Edit sorry, old bookmark nevermind the link.