“Basically we were all going to be homeless, if we couldn’t get a handle on running this Association.”
“It’s a lot harder and more labor-intensive to run our small communities than anyone ever imagined.”
“I shopped for a condo with the lowest monthly fee. But this place is falling apart and I can’t convince the other owners to do anything about it.”
“$25,000 in special assessments for each owner over the last 10 years. If this keeps up, I will soon outlive my savings.”
1 in 5 Americans or 70 million people live in volunteer-led, non-profit, shared-expense housing.
Half live in single family homes in Home Owner Associations with minimal risk, as there are far fewer shared expenses.
Half live in Condos, Patio Homes and Townhomes where there is greater risk, due to high shared expenses in infrastructure, utilities, roofs, insurance and renovations.
AARP reports 1 in 3 Seniors count Social Security for nearly all of their retirement income.
Average annual Social Security payment is $16,320 per year.
The average senior in the US has less than $25,000 per year in income.
There is little hard financial data available for these hundreds of thousands of privately held, non-profit housing associations.
But Levy, Erlanger & Co LLP, Certified Public Accountants in San Francisco details the sheer size of the underfunded reserves problem. From their 2018 Northern California Community Association Financial Survey, they report 49% underfunding of reserves that should be on hand now.
Extrapolated to all of the state of California, that’s underfunded reserves of $44 billion dollars.
The outside manager is often spread thin, such as one manager at 15 to 25 properties due to historically low pay within the industry. This results in insufficient staffing to manage and lead the property. As problems grow worse, the poor and most vulnerable are left to deal with greater and greater problems.