China’s massive transformation in urban governance, which is characterized by breaking the link between workplace and residence and consolidating state territorial agencies at the grassroots level, has profound implications for urban residents. While community building is employed as a deliberate (top‐down) approach to restore a governable urban society, the establishment, development and problems of bottom‐up civic territorial organizations — homeowners associations — are garnering increased attention from academia. Based on field research conducted in Guangzhou, Shenzhen and Meizhou in Guangdong Province from 2009 to 2011, we show that civic engagement, a necessary condition for the development of homeowners associations, is inadequate across urban communities. To understand why, we identified and analyzed three elements — lack of awareness of partitioned property ownership, the hidden costs of civic engagement and deficiency in social capital — as factors that impede civic engagement across urban communities. These elements also provide yardsticks for scholars to evaluate why, whether and how homeowners (dis‐)engage from neighborhood affairs.