By Deborah Goonan, Independent American Communities
You’ve probably heard the marketing hype about private communities: that they offer a carefree, maintenance-free lifestyle, amenities, and affordability.
But almost daily I learn of yet another homeowners or condo association property owner that is struggling to pay for the cost of living in Association Governed housing.
Here are 5 real-life examples of just how unaffordable it is to live the American Dream in a common interest development.
Rising maintenance fees
All across the U.S., condominiums and planned communities are aging. That means old plumbing, roofs, elevators, community pools, and private roads are in need of major renovation or replacement. But many associations have failed to set aside savings for these expenses in their reserve accounts. That results in hefty special assessments – often thousands or tens of thousands of dollars – or huge monthly assessment increases. The added costs are pushing some homeowners over the edge, forcing them to consider moving out, or risk losing the equity in their homes to foreclosure by the association.
The ‘Brutal Reality’ Of Owning A Condo In Hawaii
They’re often the only homes people can afford, but maintenance fees can suddenly explode. Should the state do more for owners?
“…Nellie Miller, 74,…lives on the 16th floor of Pearl Ridge Gardens and Tower.
She bought her condo nearly 20 years ago, and paid it off in 2001. When she purchased the one-bedroom unit, her maintenance fees were under $100 per month. Now they are more than $600.
In total, her monthly fees and utility costs are nearing $700 per month, almost half of her monthly $1,400 Social Security income. Already, it’s been harder to afford food and medicine.
“If they keep on raising the fees, they’re going to raise me out of here,” she said. “I had no idea that this fee would be going up like this. If I had known of that, I would have never moved here.”
Read more here: http://www.civilbeat.com/2016/05/the-brutal-reality-of-owning-a-condo-in-hawaii/
The cost of providing water
Water resources are becoming more scarce, especially in drought-ravaged western states such as California. In other parts of the country, aging water utility systems require millions of dollars in repairs and upgrades to ensure a safe and abundant water supply. That means water and sewage treatment rates are on the rise in all 50 states. Association Governed communities are especially hard hit if they have to irrigate common areas and open spaces. They could also consider replacing established landscapes with less-thirsty vegetation, but that, too, comes at considerable cost.
In addition to paying higher water bills at home, watch for assessment increases to cover the HOA’s utility bill as well.
Longmont HOAs watch rising water rates closely (CA)
City Councilman Jeff Moore, who is also president of the Meadowview 7 & 9 Single Family HOA, said a possible increase in water rates would mean tough choices for his fellow homeowners.
There are 132 homes in the Meadowview HOA and three acres of open space, Moore said.
“In our HOA, the first year’s impact (of increased water rates) would be $3,500 and then the second year it would be another $4,300,” Moore said. The water bill for landscaping “would go from $18,000 to $25,000 in the first two years.”
Read more here. http://www.timescall.com/longmont-local-news/ci_29880935/longmont-hoas-watch-rising-water-rates-closely
HOA unfunded mandates
Sometimes your HOA gets a bit overzealous on enforcing architectural and landscape standards in the community. For instance, Sahuarita HOA in Arizona has decided to crack down on homeowners to repaint their homes – even though it appears most don’t really need it. All of a sudden, thousands of homeowners are expected to budget a major renovation that must be completed within 6 months to a year. This is just one example of HOA overreach, but it’s not that uncommon and perfectly legal. State laws leave these matters up to the discretion of the HOA board. If homeowners don’t agree, their only recourse is to attempt to replace the board.
More than 2,000 homeowners in Sahuarita asked to repaint homes
About 2,600 homeowners received the letter that says their homes do not meet the minimum community-wide standards for exterior paint.
Associa Arizona, the HOA’s management company, said in a statement that it inspected each house in March and April.
The company said this is a follow-up to a compliance effort made in May 2013 in which 1,800 letters were sent to homeowners, resulting in more than 1,350 violations being corrected.
Read more here. http://www.tucsonnewsnow.com/story/31975521/more-than-2000-homeowners-in-sahuarita-being-asked-to-repaint-homes
Upgrading inadequate storm water control
A Norman Lake community in North Carolina is dealing with a poorly constructed storm water drainage system. The cost to repair it is beyond their reach. The city has enacted a storm utility fee (a tax) to provide some assistance in the form of cost sharing, but it does not cover the entire cost of reconstruction. So homeowners are getting hit with higher tax bills and higher HOA assessments.
Storm water control is a hot button issue all across the U.S., because it is closely related to flood control and environmental protection of water sheds. As retention ponds, canals, dams and other storm water components wear out, repair costs are likely to skyrocket. Most Association Governed developments are responsible for maintaining storm water control within their communities.
Following the money trail: Norman residents want to know how the stormwater dollars will be spent
Arbor Lakes has erosion and stormwater runoff problems, some of which are too costly for the HOA. Moxley said the developers built the lake with cost savings in mind and resulting erosion has turned the lake into a costly problem.
…
Moxley said a few years ago, after Mayor Cindy Rosenthal was first elected, she led the city in holding the developers responsible for making some repairs. Despite that, it hasn’t been enough.
“My main thing I’ve been trying to tell the city guys is that the system could easily be fixed with a little more oversight,” Moxley said.
While regulations for developers have continued to evolve to prevent future issues, that’s water under the bridge for Arbor Lakes — the HOA has inherited the responsibility for dealing with problems that might have been prevented.
Private Country Club bailouts
Golf courses are struggling all over the country. Private club owners are going out of business, leaving behind abandoned fairways and putting greens, as well as fully-equipped club houses. Some HOAs are taking a vote of members, to determine whether or not to purchase a failing golf course. A reported majority of owners in Turkey Creek HOA decided to take on the expense of maintaining their own golf club.
And it’s going to be quite an investment, with no guarantee of a positive return on that investment. Many other homeowners in golf communities are facing the same issues. If you’re an avid golfer, you might be willing to come up with the extra money. If you don’t golf, your neighbors just might force you to subsidize the cost of their game. Get ready to pay up or sell and move out.
Turkey Creek homeowners buy golf club, seek manager
After several failed efforts to reopen the club, homeowners voted in October to buy the club and assess themselves 1.2 mills, or $1.20 per $1,000 of taxable property value, to pay back a $2 million loan over 15 years. The $2 million includes $1.35 million to buy the club from Wallace Cain and $650,000 in renovations.
Read more here. http://www.gainesville.com/article/20160104/articles/160109907
You must be logged in to post a comment.