The Community Associations Institute (CAI) estimates that 74 million Americans live in communities managed by homeowners associations, of which condos account for 35% to 40%. That’s a lot of people - many of whom may be in for a nasty shock when they go to pay their monthly common charges, if they haven’t already gotten one.
Bloomberg and Crain’s New York Business are among the outlets reporting on the national trend of surging carrying charges for condos, co-ops, and HOAs. The monthly fees paid by owners of units in multifamily communities and buildings for the upkeep of common elements, utilities, taxes, personnel, and other shared costs have risen significantly this year, in large part due to rising energy costs, but also to repairs, wage increases, and unforeseen expenses related to COVID.
Crain’s cites data from real estate data aggregator Zillow indicating that the national monthly median condo fee increased 19% this year, from about $379 in August 2020 to about $451 in August 2021. As the outlet points out, that increase means that unit owners have had to find an additional $900 in their household budgets this year.
It’s All Interrelated
The services that most associations rely on, such as landscaping, plumbing, and construction in general, have seen shortages in both labor and supplies in recent months, forcing vendors to increase prices. This in turn adds up for associations, whose residents are ultimately responsible for such costs through the monthly common charges. These shortages, in addition to overall inflation, have also increased the costs of energy and utilities nationwide.
The tragic, deadly collapse of the Champlain Towers South condo in Surfside, Florida this June has had financial repercussions for multifamily buildings across the country. It instigated a wave of stricter inspection and repair laws, which has translated to more costs for the associations that must now perform those inspections and repairs. Moreover, the investigation into the cause of the collapse has brought heightened attention to the changing climate’s effects on buildings and infrastructure, bringing into stark relief that structures and systems now age and deteriorate more rapidly due to the harsher environmental factors.