HOA dues levels
From: Raines Cohen (rc2-coho-Lraines.com)
Date: Wed, 13 Nov 2002 07:36:05 -0700 (MST)
On 11/12/02 8:54 PM, Terri Hupfer at Pleasant Hill (CA) coho wrote (off 
the list):

>Here in Pleasant Hill we are into our first year of deciding whehter or 
>not to raise HOA assessments. I noticed a few days back when you posted 
>the notice of your unit for sale, you included the HOA assesment. Would 
>you mind giving me the range for your units?

Terri -

1. It's not my unit for sale, it's my neighbors'. I just have a small 
studio loft, they've got a big 2BR.

2. Dues here at Swan's Market Cohousing (Oakland, CA) range from $300-350 
per unit per month; most costs are per unit, with a small component per 
square foot. However, that includes gas, heat, water, and hot water, and 
everything beyond the paint on the inside walls of our units (including a 
roof shared with the commercial tenants in the rest of our building owned 
by a nonprofit developer), in addition to CH utilities, insurance, and 
operations, and we're still spending on capital improvements like 
building out our guestroom. And we have only 20 units over which to split 
the basic "fixed cost"; Pleasant Hill coho is a much bigger community, 
albeit with additional expenses like lawn and pool maintenance (it looks 
unlikely that our hot tub plans will make it into this year's budget).

[ Berkeley coho apparently has slightly lower dues, but only 14 units, 
with a different budget structure / allocation]

What are initial dues like there at PH coho? I imagine that the initial 
level was set by your developer's condo consultant, who might even be the 
same as ours.

We ended up reducing HOA dues slightly the first year after move-in, and 
not changing much since then; they may go up some this year because 
insurance costs have skyrocketed since 9/11/01, and we're just now seeing 
the full effect of that. However, updating our reserve study, now that 
it's been a few years and we've been fully funding at the initial levels, 
may result in some savings.

The real questions you might want to evaluate:

- How's your HOA doing relative to budget for this year? If you carry 
over a surplus, that can reduce the amount of income you need from dues. 
We did this our second year, "coasting" on savings from the first year.

- What %age of your members' housing costs are going to HOA dues vs. 
mortgage principal/interest?

- What %age of your members' income is going to housing costs?

- What is the consensus on how much the HOA wants to do this year? What 
dues levels would it take to acheive the top priorities / group goals?

- Are there particular members that would be adversely impacted by dues 
increases or who would especially benefit from a reduction?

- Is there anything that could or should be funded by means other than 
dues - there are all kinds of methods, from voluntary assessments to user 
fees (don't forget to factor in the high tax rate for 'unrelated business 
income') to reserve loans to member loans to outside financing. And also 
make sure every project/team not only has a budget but also realistic 
quotes and has evaluated "do-it-yourself" alternatives... and that the 
group has clear priorities for how much it really wants to and CAN do 
each year.

- What effect will rates have on resale values? Too high and it means 
that fewer buyers can afford a given purchase price; too low and you 
can't fully fund reserves and banks get twitchy about financing.

You're still pretty new living in community there --less than a year, so 
I wouldn't tinker too much yet, unless you've already discovered 
operational costs much higher or lower than expected or found significant 
errors in your reserve study.

One membership we have beyond TCN is the Executive Council of Homeowner's 
Associations, or ECHO <http://www.echo-ca.org/> - it's a professional 
organization for HOAs in California (yes, it's an association of 
associations!). ECHO publishes a magazine and offers publications, 
seminars and conferences, some of which are relevant to coho groups 
(although many are for much larger condo associations without all the 
great consensus and similar tools that we have). We found some advice 
there on new laws regulating HOAs and best practices regarding budgeting, 
dues, notice, etc.

Raines


Raines Cohen <my initials,2,dash,coho,dash,L at my first name .com>

  Member, Swan's Market Coho [Oakland, CA] <http://www.swansway.com/>
As of today with a City Car Share pod with a station wagon parked right 
outside our window! <http://www.citycarshare.org/>

  Facilitator, East Bay Cohousing [on hiatus] <http://www.ebcoho.org/>
Where the website really will get updated soon -- we promise.

  Boardmember, The Cohousing Network <http://www.cohousing.org/>
Advising members to keep an eye on their mailboxes for a letter from 
Executive Director Roy O'Shaughnessy.


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