Nearly one-quarter of all Americans live in an HOA community. People who seek out these communities do so for peace of mind, knowing their HOA home values will stay high.
Enjoying all the amenities associated with living in an HOA neighborhood comes at a price. HOA fees and assessments go up over time.
If you live in an HOA community and wonder why your assessments are increasing, stick around as we explain.
What Are HOA Assessments?
HOA assessments are dues homeowners pay to cover operational expenses, maintenance, repairs, and other expenses in the community.
HOA Dues
HOA dues are part of the HOA assessments. These are the regular monthly or annual fees homeowners pay to meet the community's annual budget.
Some communities have amenities like pools, community centers, playgrounds, tennis courts, and pickleball courts. HOA dues go towards these amenities.
Fees may include internet and lawn services, as well as cable television. HOA boards also keep part of the dues in reserves for unexpected expenses.
Special Assessments
Every so often, big projects come up in areas of the community that need attention or repairs. To pay for things like pool resurfacing or new balcony railings in a condo building, homeowners may receive a special assessment.
These types of urgent needs do not fall under the annual budget and require a special assessment.
Why Are Your HOA Assessments Increasing?
An association manager working with the HOA board is trying to keep from increasing assessments. Remember, board members are homeowners living in the community and are reluctant to raise HOA fees. Sometimes, it's unavoidable.
Inflation
HOA budgets increase each year on average due to inflation. Covenants, conditions, and restrictions (CC & Rs) sometimes limit the amount an association can increase assessments.
Over the past couple of years, inflation has been the highest in 40 years, so the limit imposed by CC & Rs is helpful to homeowners.
In general, the HOA can raise assessments as often as needed to cover the annual budget.
Increased Service Costs
HOA communities employ vendors to maintain common areas and amenities. As the price of gas and other things rises, the cost of services increases.
Pool maintenance, lawn maintenance, and landscaping all cost more in 2024, causing an increase in HOA assessments. An increase in insurance costs is also a contributor.
Enhancing the Appeal and Value of the Community
The HOA board has to look ahead and have the foresight to plan for future community improvements. Homeowners expect certain standards. Putting extra money in reserves helps to prepare for future projects.
Preserving HOA Home Value: It's a Balance
Now that you know why HOA assessments are increasing and the relationship to your HOA home value, you can see how homeowners association boards have to strike the right balance.
Do you know who can help your HOA with dues and assessments? The association management team at PMI Birmingham Region is here for you. We are a full-service community association management company.
Learn more about our services through our website or call 205.583.2500 to schedule a consultation.
