Re: HOA Fees
From: Philip Dowds (
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.

Philip Dowds
Cornerstone Village Cohousing
Cambridge, MA

mobile: 617.460.4549
email:   rpdowds [at]

> On Dec 8, 2018, at 9:59 AM, Fred-List manager <fholson [at]> 
> wrote:
> Alan O'Hashi <adoecos [at]>
> is the author of the message below.  It was posted by
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> 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
> Colorado 303-910-5782
> Wyoming 307-274-1910
> Nebraska 402-327-1652
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  • Re: HOA fees, (continued)

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