Cohousing-L Mailing List: Re: How do communities deal with members who can't pay their condo fees or assessments?

[Patricia Lautner (lautnerp]

In communities like ours, where we have income diversity as a core common
value, we do run into this kind of situation sometimes.  While we have
never needed to do any assessments fortunately, we do raise our condo fees
usually annually.

We have an internal affordability fund with mechanisms for funding that
fund - a percentage of our annual condo fees is one mechanism.  From the
fund, we will give a no-doc-no-questions-no-interest-no-timeline loan of up
to $1,000 to any household who needs it for any reason.  The only
stipulation is that a household who borrows may not borrow again until
they've paid back.  We set up this fund to help folks who need some cash
for a short period, (for example - if a car repair is needed that prevents
someone from being able to work.)  This in theory would help our must
vulnerable low-income/low-savings members but what's interesting is that
nobody has borrowed from this cash line since its creation.

In addition, we have an internal affordability team that's elected who's
job it is to figure out how to use the money in our affordability fund.
Whether it's to help low-income folks buy into the community or whatever.
It's tricky and complicated so that while we have this money just sitting
there, we haven't figure out how best to use it.  (But we're actively
working on this now.)

Recently we needed to increase our condo fees by 6%.  Some households said
that they couldn't tolerate such a large increase.  We quickly passed a
proposal that would assist those households for 1 year by using the fund to
pay the increase difference between what they could tolerate and the 6%.
For example:  if a household can only tolerate a 4.5% increase, the fund
would cover the 1.5% (a small amount of money really) for one year only.
This isn't a long term solution but it was something.  Again however, the
households who said they just couldn't tolerate the 6% - in the end just
decided to pay up instead of using the fund.  My theory is that when folks
say they can't afford something, it *may *be fear talking more than
reality.  I think or hope that these vulnerable households felt supported
by the fund such that they lost the fear and were able to look at their
finances again.

Regarding the reserves:  We funded our reserves pretty well during
development (we priced the homes so that the fund would be funded.) We pay
into the reserves also through condo fees. I think that our members are in
agreement that putting money away in reserves is a better affordability
strategy than assessments.


Patti
Jamaica Plain Cohousing
Boston



On Wed, Feb 10, 2016 at 12:39 PM, Judith Adler <judith_adler [at] hotmail.com>
wrote:

>
> Hi:
>
> At Cornerstone we are once again thinking of how much money we should keep
> in reserve, and one issue that repeatedly comes up is how we deal with
> members who cannot pay increasing condo fees, either because of job loss or
> low income. We have 4 non-market rate units and those household pay the
> same condo fees according to percent ownership as we all do.
>
> We'd like to hear how other communities handle this.
>
> Thanks,
>
> Judy Adler
>
> Sent from my iPhone
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