Home Values Increase Faster in HOAs
Recent research conducted in Northern Virginia by a professor and student
at George Mason University indicates that community associations can add
a 5-6 percent increase in property values over similar homes in nearby non-
association communities. Writing in Regulation magazine, the authors say
that the increase in home value attributed to community associations is
“especially remarkable when one considers that (HOA) residents pay twice
for many local services—once in taxes and then again in HOA fees.” The
authors also pose valid questions, such as: Do community associations
increase home values because they offer better-quality services than local
government or because they offer services that local governments cannot
offer (like more restrictive zoning) or do not offer (like greater security)? Learn
more.
Why a Fee Increase?
It isn’t news most homeowners want to hear: that assessments might be
increased. But sometimes a fee increase is the best way to keep the
association in good financial health -- and, sometimes, increases are
unavoidable. Here are some of the reactions homeowners typically have
when they hear that their fees are about to increase, followed by the related
rationales for an increase.
“I can’t afford the increase.” When you live in an association, you need to be
willing to share the costs, as described in the governing documents to which
you agreed in escrow. Keep in mind that if the association does not maintain
its property, real-estate values can decline.
“I probably won’t be living here in 15 years when the streets need repaving.
Why should I have to pay now?” Senior citizens, as well as young people
living in condos they consider to be starter homes, often pose this question.
The problem with this “short-timer” logic is that these people are themselves
benefiting from the use of the streets, pool, and other common assets paid
for by members who lived there before. Members should pay for the
incremental use of these items each year they live there.
“Why don’t we just have a special assessment for a specific project?” It can
be difficult to collect money when you suddenly have a large expense. It’s
better to collect it gradually, so the funds are there when you need them.
Also, a special assessment unfairly penalizes homeowners who happen to
live in the association at the time.
Recent research conducted in Northern Virginia by a professor and student
at George Mason University indicates that community associations can add
a 5-6 percent increase in property values over similar homes in nearby non-
association communities. Writing in Regulation magazine, the authors say
that the increase in home value attributed to community associations is
“especially remarkable when one considers that (HOA) residents pay twice
for many local services—once in taxes and then again in HOA fees.” The
authors also pose valid questions, such as: Do community associations
increase home values because they offer better-quality services than local
government or because they offer services that local governments cannot
offer (like more restrictive zoning) or do not offer (like greater security)? Learn
more.
Why a Fee Increase?
It isn’t news most homeowners want to hear: that assessments might be
increased. But sometimes a fee increase is the best way to keep the
association in good financial health -- and, sometimes, increases are
unavoidable. Here are some of the reactions homeowners typically have
when they hear that their fees are about to increase, followed by the related
rationales for an increase.
“I can’t afford the increase.” When you live in an association, you need to be
willing to share the costs, as described in the governing documents to which
you agreed in escrow. Keep in mind that if the association does not maintain
its property, real-estate values can decline.
“I probably won’t be living here in 15 years when the streets need repaving.
Why should I have to pay now?” Senior citizens, as well as young people
living in condos they consider to be starter homes, often pose this question.
The problem with this “short-timer” logic is that these people are themselves
benefiting from the use of the streets, pool, and other common assets paid
for by members who lived there before. Members should pay for the
incremental use of these items each year they live there.
“Why don’t we just have a special assessment for a specific project?” It can
be difficult to collect money when you suddenly have a large expense. It’s
better to collect it gradually, so the funds are there when you need them.
Also, a special assessment unfairly penalizes homeowners who happen to
live in the association at the time.
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