What to Do About Inflation’s Effects on Homeowner Association Dues

In a real estate setting, HOA stands for homeowners’ association. HOA fees are the dues paid by each homeowner in communities with condos, townhouses, subdivisions, or a combination thereof, to cover the maintenance of all common property in the area. HOA costs range per community depending on what type of amenities are available, such as pools, parks, fitness centers, golf courses, fishing lakes, etcetera; in some communities, lawn maintenance might be included. The HOA’s purpose is to put contracts in place that will preserve the property value moving forward.

With inflation, in the last twelve months alone, the Texas CPI-U has seen a 9.1 percent increase, the largest rise since 1981. HOA dues are reflective of this rise. Here’s what to expect from your HOA when affected by inflation, and how we can help.

HOA Dues & the CPI-U

Amidst inflation, it can appear as though an HOA’s dues and expenses go up when in reality it’s the weight of currency that is going down.

The CPI, Consumer Price Index, is a measurement of the current cost of living based on over 200 categories of consumer goods. To calculate economic changes, the CPI measures the cost of average lifestyle goods, which are currently increasing. The CPI is tied to inflation-related HOA fee increases because of the cost of maintenance that rises with inflation.

While currency decreases its ability to pay for goods and services, the amount of money needed for community upkeep increases. As a result, the annual HOA dues go up by the same amount as inflation to cover the rising costs of maintenance. To maintain balance, HOAs determine how much the local cost of living is rising, which is a good indication of the local effects of inflation.

What You Can Do & How We Can Help

Amid inflation, it can appear as though an HOA’s dues and expenses go up when in reality it's the weight of currency that is going down. The CPI, or Consumer Price Index, is a measurement of the current cost of living based on over 200 categories of consumer goods. The CPI figures out how the economy is doing by measuring how much average goods cost, and it is currently keeping track of how much those costs are going up.

As a homeowner, you’ve already achieved an important first step by recognizing that questions about inflation and HOA decisions are important questions to ask. To further understand the increase in HOA fees, talk to your trusted realtor. Before you purchase a new home, let our sales representatives help you determine the cost of the HOA fees for the community you’re interested in.

We can also tell you about the payment schedule and the various available payment options. Together, we can discuss what amenities are included, as well as any guidelines the HOA may have in place for both the community and your new home.

Every year, your budget should be analyzed for inflation. Determine how much the cost of living is increasing based on the CPI. If you already pay HOA dues, reference the CPI to confirm it is a reasonable increase and seek out professional insight on if the increase is acceptable.

Pioneer Real Estate Services is a leading property management company located and providing service within the Austin area. With our hands-on management approach and more than a decade of experience, we provide our clientele with the very best in property management.

Contact us for more information about the current inflation, reading the CPI, and navigating any increase in your HOA. Let us assist you by providing the responsive and professional management and leasing services you deserve.