July 6, 2023 – This post revisits an article originally published in the Washington Post by Professor Evan McKenzie on July 2, 2021. Professor McKenzie is the author of two books on common-interest developments (CIDs), and one of the country’s most vocal critics of privatized residential developments. In the aftermath of the June 24, 2021…
The percent funded metric is arguably the most misunderstood concept in the lexicon of HOA financial planning. More correctly stated, we are referring to the “percentage of the fully funded reserve fund balance,” which may also be referred to as 100% funded. The Community Associations Institute (CAI) 2023-Reserve Study Standards (RSS-2023) defines the term Fully Funded…
As of the end of 2020 the number of common interested developments (CIDs) in the United States was estimated to be 355K. 35%-40% are condominiums. 58%-63% planned developments, 2%-4% real estate cooperatives. (CAI-2020-2021 Statistical Review) Forty Years of Growth In 2000 the number was estimated to be 222,500. By the end of 2010 the number…
Bring up the subject of homeowner associations (HOAs) and the conversation is almost certain to lead to a discussion of special assessments. Special Assessment – What is a special assessment, anyway, and why is the subject ever-present when conversations turn to HOAs and condominiums? The term “special assessment” refers to non-scheduled assessments that the…
In previous posts we have talked about a tipping point for the U.S. housing market and subsequently, many of the homeowner associations in the country. Back in 2009, when CIDA’s founders introduced the tipping point thesis to the industry dialogue we were referring to the year 2020, at which time the majority of the homeowner…
Budgeting for a homeowner association (HOA) typically involves two elements: 1) Annual operating expenses; 2) Intermittent or non-annual replacement reserve spending. Annual operating spending in turn, typically includes spending on recurring maintenance that is expected to occur at least once of the course of the typical year. “Operational” maintenance spending is a separate category of…