|Re: HOA Fees||<– Date –> <– Thread –>|
|From: Philip Dowds (rphilipdowdsme.com)|
|Date: Sat, 8 Dec 2018 08:10:08 -0800 (PST)|
I’d like to elaborate a bit on the connection between community reserve funds and household investment strategies. First, a reserve savings account is not an end in itself, it is a means to an end, which is: A dependably maintained property. It is just one of many possible funding strategies for major capital replacement projects; other funding strategies (sometimes arrived at by default, not intent) are special assessments and bank loans. Communities might reasonably emphasize one strategy over another, or rely on a blend of strategies. Different households may have different preferences. But what’s driving the expense bus is not the funding strategy, it’s the major capital projects anticipated and agreed as necessary within a specific time horizon, like 5 or 10 or 25 years. And, it’s definitely true that different owner households have different relations to their home equity. For some, it’s the major (and possibly only) component of their net worth; for others, home equity is only a small component of their net worth and retirement plans. But I can’t discern any reliable patterns between the home equity / net worth ratio, and willingness to invest in a well-maintained commons. Why not? Because your home is not an investment abstraction like a municipal bond. Your home is your life. Or, expressed with greater precision: Your home is a major component (perhaps THE major component) of a quality of life you’re willing and able to pay for. When you "fix up" your property, it’s not merely because (or even primarily because) you’re making a judicious investment; it’s also because you are producing and consuming a quality of life that satisfies you. Maybe it’s as simple as, You don’t want to live in a shabby community. A personal vehicle provides an interesting illustration. Unlike a house, it’s a depreciating asset, not an investment. But despite that, I will clean out, wash and vacuum my car at intervals. Not because I expect to sell it at a profit, but because I don’t want to drive around in funky car. Clearly, some of my friends and neighbors have very different views on this. Some condo owners don’t mind if the commons gets funky, so long as upkeep of the commons doesn’t “cost too much”. It is this divergence in lifestyle value systems, not investment opportunities, that explains best why some people are happy to pay into a reserve fund, and others are not. Can cohousing communities do a better job of sorting out (or forestalling) lifestyle values conflict than can the ordinary, average condo association? We like to think so. Thanks, Philip Dowds Cornerstone Village Cohousing Cambridge, MA mobile: 617.460.4549 email: rpdowds [at] comcast.net > On Dec 8, 2018, at 9:59 AM, Fred-List manager <fholson [at] cohousing.org> > wrote: > > Alan O'Hashi <adoecos [at] yahoo.com> > is the author of the message below. It was posted by > Fred, the Cohousing-L list manager <fholson [at] cohousing.org> > after deleting quoted digest. > > Digest subscribers, please delete most of quoted digest and > restore subject line when replying. NOTE: Digest subscribers can > make replying easier by using "auto folders" particularly Gmail and > Outlook users. See http://justcomm.org/jc-faq.htm#Q6.5 > > -------------------- FORWARDED MESSAGE FOLLOWS -------------------- > Susan - I agree with the others, there are lots of variables that > determine the HOA dues and any comparison of dollar amounts will be > misleading. I thing the biggest issue that communities push back > against is to what extent the reserve account is funded. > > I don't have a problem with reserves and look at them as the > equivalent of a Health Savings Account (HSA) except to keep everyone's > homes healthy. It is a way to set money aside to pay for improvements > to the community and ultimately to the value of the house. It's not an > expense, it's an investment. I think the skirmishes around HOA dues is > more of a cultural one. > > Where the community culture comes into play is what we experience at > my place. There are market-rate homes in excess of 2000 sq ft which > appreciate as the economy determines - in Boulder, that's huge. In the > mix are 800 sq ft permanently affordable homes that appreciate in very > small increments, over time. > > As you might expect, those folks who have a big chunk of their assets > tied up in a house, have more of an incentive to protect their asset > and keep the community nice and fund the reserves at a higher > percentage because they, relatively, have a lot to lose if the roof > blows off and there isn't enough to pay for the replacement. > > As one of the smaller homes owners with limited appreciation, I have > less incentive to jack up the reserve fund too high. So the community > values discussion should be around, what are members willing to give > up for the good of the entire community. > > The current dues structure favors the large home owners. For example, > one of the 2000 sq ft households which is 2.5 times larger pays only > $150 more per month than an 800 sq ft household. As a result of the > formula, the small units subsidize the large units. It's similar to > the regressive income tax argument that there will be a "trickle down" > which doesn't happen. > > Thx > Alan O. > > ******************************************* > Alan O'Hashi - ECOS > EnviroCultural Organization Systems > http://www.alanohashi.com/ecos > Colorado 303-910-5782 > Wyoming 307-274-1910 > Nebraska 402-327-1652 > _________________________________________________________________ > Cohousing-L mailing list -- Unsubscribe, archives and other info at: > http://l.cohousing.org/info > > >
- Re: HOA fees, (continued)
- Re: HOA Fees Elizabeth Magill, December 8 2018
- Re: HOA Fees Philip Dowds, December 8 2018
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