Cohousing-L Mailing List: Reserves [was Rate of increase in HOA Dues?

[Sharon Villines (sharon]

> On Apr 7, 2025, at 3:12 PM, R Philip Dowds via Cohousing-L <cohousing-l [at] 
> cohousing.org> wrote:

> (1) The “fully funded” reserve plan is no longer the gold standard for 
> managing capital replacement financing.  In a world of unpredictable 
> inflation, morphing technology and code requirements, debatable system life 
> spans, erratic supply chain disruptions, and evolving community preferences 
> and priorities, “fully funding” maintenance for three to five decades in 
> advance is a fruitless activity.
>      I will spare you the details of how we’ve been jiggering out 
> calculations, but here’s the overview:  We look ahead only a decade, with 
> special attention paid to those projects that probably ought to happen with 
> the next three years; then we craft a collection program and savings strategy 
> intended to make sure we have (more than) enough money for the entire ten 
> year.  And afterwards (IMPORTANT!) we update the Plan every three years; that 
> is, roll the ten year planning window forward every three years.

But how do you deal with costs that are 25 years out like replacing the roof? I 
think Cornerstone is the same age as Takoma Village so those big ticket items 
are coming up. Saving for this item in 3-10 years would be very difficult.

For sometime, I think the acheivable standard has been closer to 70-80% of the 
total estimated cost (based on useful life) required to repair and replace 
reserve items. Even then the 70-80% varies with the items included. Some 
reserve specialists advise putting everything in the reserve study. Others use 
a threshold of itmes valued over $1,000, $10,000, etc., depending on the size 
of the annual budget and the ability of residents to cover any emergency 
expenses. Very wealthy communities prefer not to have funds sitting in 
low-interest bearing accounts.

For communities with a resident architect or construction engineer, like yours 
(and you) I think it may be possible to estimate more than communities that 
don’t have that expertise inhouse. And those that have members who are living 
paycheck to paycheck.

Sharon
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Sharon Villines
Takoma Village Cohousing, Washington DC
http://www.takomavillage.org