Ouch! The Pinch of HOA fees

Homeowners Association (HOA) management often brings tangible benefit that enhances community living. But rising fees that outpace inflation warrant close attention.
 

As the buyer's agent for a townhome in the Shadow Green community of Franklin, TN, which closed in September, I can attest to the neighborhood's well-managed appearance.

Shadow Green's HOA fees cover essential services like landscaping and maintenance. Residents also enjoy amenities such as a pool and a covered outdoor kitchen with barbecue facilities. These features not only elevate the living experience but can also boost property values. Condo and townhome HOA fees often include a master insurance policy that covers common areas and the exterior of buildings, providing an additional layer of protection for homeowners beyond their individual insurance policies. While you can't opt out, the perks of living in a community like Shadow Green can make those mandatory fees feel like a worthwhile investment.

However, the rising costs of HOA fees are a reality that can't be ignored. Shadow Green's monthly fee stands at $360, while my investment condo in California is set to rise to $456 in 2025 after a 6% increase. This follows a 60-month special assessment of $50 per month to replace outdated copper piping.

As highlighted in a timely Wall Street Journal article this month, "The Fees Burdening Home Owners After They Buy" (click link), the increasing costs are often driven by higher insurance premiums and other expenses that frequently exceed inflation rates. This trend can be daunting, especially for older properties where maintenance needs are more frequent and costly.

Despite these challenges, I believe that the value of HOA management, particularly in aging communities, remains significant. Effective operation ensures necessary repairs and maintenance are conducted, preserving the community's appeal and integrity, which ultimately benefits homeowners in the long run.