Cohousing-L Mailing List: Re: Questions about Reserve Amounts

[Sharon Villines (sharon]

To respond to Philip’s question based on Joe’s excellent figures — the costs of 
maintaining, repairing, and replacing the commonly owned elements are not 
particularly related to how many people live in a unit. The cost of the unit 
should include an evaluation of the reserve funds. Healthy reserves, higher 
prices. Low reserves, lower prices and greater risk.

The reasoning behind the condo fee 50/50 split was that some elements are equal 
between units — we all have one parking space, for example. Parking is 
expensive. It is unlikely that a large unit would use the CH more than a small 
unit — the guest rooms are more likely to be used by small units.

But in fact, our large units do not necessarily have more people in them. We 
have a 4br with a full basement with 1 person, and a 3br with a full basement 
with one person. For years we had a 1 bedroom with a single parent and child. 
And a one bedroom with a single parent and 2 children.  Size of unit is not 
necessarily related to the number of people living in the unit. Most of our 2 
bedrooms have 1 person.

Another way to look at the reserves is to divide by the number of units — 
$93,000/43= ~$180 a month per unit. It seems like a lot but it also covers a 
lot. It has been a great comfort not to have to worry about replacing the HVAC 
system or replacing the roof when we were able to add solar panels.

Having a reserve study with a graph of expenses at least 50 years out—ours goes 
100 yrs—makes it much easier to convince residents that we need to have that 
much in reserves.

Sharon

> On Jul 8, 2018, at 11:44 AM, Joseph Wheeler <wheeler76 [at] gmail.com> wrote:
> 
> We contribute almost half of the annual income from condo fees to our
> replacement reserve ($93,000) or maintenance reserve ($22,000). In our 18
> years of operation, we have never had to ask members to pay a special
> assessment.
> 
> With 43 units of varying sizes, our monthly condo fees range from $357-638
> with the average being about $455. Of that average fee, about $223 would go
> to reserve accounts.
> 
> We have commissioned a reserve study every 3-4 years and those studies
> inform our budget process. Our most recent study recommended continuing to
> increase reserve contributions about 5-6% per year to avoid risk of special
> assessments.
> 
> The basic formula for calculating our condo fees is that 1/2 is split
> evenly among all the units and 1/2 is variable based on square footage of
> the unit.
> 
> -Joe Wheeler
> Takoma Village Cohousing
> Washington, DC