The Smallwood development as envisioned by developer A.N. Smallwood was originally a "restricted" community, i.e., homes were available only to individuals who were eligible for membership in the Mountain Lakes Country Club, which was restricted to "caucasians of the Christian faith", according to literature and sales brochures. This began to change in the 1940s, but many deeds contained restrictive covenants into the 1950s. In the past few decades, the community has become very diverse, comprising local year-round residents as well as summer-home owners who hail primarily from the New York metropolitan area and south Florida.