The only guess I can give you is based upon the notion that bungalows have the distinction of being all on one level - of not having an upper floor. In the UK, at least, therefore, they are used primarily by people with mobility problems. Ergo, a bungalow colony may refer to a colony set up for older people. Equally, bungalows may have the connotation of cheap housing. (Then being code for 'low class'). Or, because you need to spread the house out more if you have only one floor to play with - they may be referring to expensive housing!

Isn't idiom wonderful? (Logic is rarely any help in decipherment.) I am reasonably certain that, if the context were the UK, a bungalow colony would be one packed with OAPs. (Look that one up!)

cheer

the sunshine warrior