My understanding is that a lot of HOAs are formed prior to occupation (during the development phase).

This is a deal done between the developer and city to lower costs. Suburbs are expensive per/capita to administer and maintain, so I think the hope is the HOA takes some of those costs.

Regardless, any HOA (to my knowledge?) Must be voted is regularly (in my city condo syndicates need to revote the board every year, I assume the same applies for "flat condos"/HOAs). All financials also need to be public, there's no room for shinanigans (I've been trying to dump my board seat for years, keep getting voted in under protest).

All that to say, HOAs may be a requirement of the local government, but the is nothing stopping the members from voting in a new board and dropping the HOA down to bare legal minimums.