I am curious how being "individualists" had them end up with something like Homeowners Associations. I am an individualist myself to a relatively high degree and I do not understand how something like that can be tolerated at all.
HOAs seems to be more about using bureaucracy to control others and force them to do what the person with power wants. There is a classic quote “There must be in-groups whom the law protects but does not bind, alongside out-groups whom the law binds but does not protect.
I think the dark side of individualism is that it can create the mindset that other's success comes at your expense, which pitches people and groups against each other, and makes differences a threat and not a strength. It also also discourages people from acknowledging their own limitations, because if someone is smarter or better than you then they will be more successful, and that means you lose.