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So I have a habit at looking at websites like Realtor and Zillow and looking at different properties.
Most high-rises I see are $800+/month for HOA fees, that is without the mortgage of course. This is for a variety of cities mind you, not just Phoenix where I live. That HOA fee also goes higher when you look at higher units. For an example, if you look at a penthouse unit, a HOA fee can be $2k/month.
If I were looking to buy a property right now, while I think ideally I'd look at a condo due to my lifestyle, I'd never consider such a high HOA. I can't fathom spending that much extra just on maintenance and a mortgage and of course all the other things I need in my life like saving for retirement, food, etc.
Townhouses tend to be a bit better, around the $300/month range that I have seen. SFH HOAs tend to go $200/month or less, though I have seen some communities with golf courses that go up to $600+ a month, but I take it that is golf course maintenance.
I do believe the high HOAs for high-rise living is what is holding back urban development in the US. This just isn't realistic for the average American to be paying for. I think plenty of Americans would be more open-minded to condo/townhouse living if the HOA fees were more in line with reality.
Why are HOA fees so high across the board? And is there anything that can be done to cut them down to encourage the middle-class into higher density areas?
A few thoughts. Other things included in the fees are not just the current amenity issues but also saving for their future repair and updates. If enough is collected all along, there is not the shock of a large special assessment, which sometimes brings a person or two who just doesn't pay for whatever reason. If your HOA collected when the money was needed and some did not pay, the board would have to go around and get others to chip in for that person or get a loan and have that person pay it back.
Some amenities have a lot of little things that can go wrong. After a while, can be something going wrong annually.
The building may also have a staff. There may be HOA street lights. Elevators. Some HOAs are really upgrading to be as attractive as the others with a great community center with good workout rooms, nice pool, movie room, social area, etc.
I do believe the high HOAs for high-rise living is what is holding back urban development in the US.
Nope... it just seems that way.
Far more likely it would be the REASON why those HOA's exist... or need to:
The lack of municipal controls (zoning and codes etc) that can be universally applied.
A few thoughts. Other things included in the fees are not just the current amenity issues but also saving for their future repair and updates. If enough is collected all along, there is not the shock of a large special assessment, which sometimes brings a person or two who just doesn't pay for whatever reason. If your HOA collected when the money was needed and some did not pay, the board would have to go around and get others to chip in for that person or get a loan and have that person pay it back.
Some amenities have a lot of little things that can go wrong. After a while, can be something going wrong annually.
The building may also have a staff. There may be HOA street lights. Elevators. Some HOAs are really upgrading to be as attractive as the others with a great community center with good workout rooms, nice pool, movie room, social area, etc.
Other items can be certain utilities like water, gas, cable, telephone, garbage (ours even has electricity included). Don't forget insurance, normally that is a big number on high rises. When something goes wrong, as Cully said you must have a staff to fix it, repair items must be replaced, the place must be kept clean, that is not free.
All the owner is responsible for is the inside of their unit, everything else must be supported by HOA Fees.
So I have a habit at looking at websites like Realtor and Zillow and looking at different properties.
Most high-rises I see are $800+/month for HOA fees, that is without the mortgage of course. This is for a variety of cities mind you, not just Phoenix where I live. That HOA fee also goes higher when you look at higher units. For an example, if you look at a penthouse unit, a HOA fee can be $2k/month.
If I were looking to buy a property right now, while I think ideally I'd look at a condo due to my lifestyle, I'd never consider such a high HOA. I can't fathom spending that much extra just on maintenance and a mortgage and of course all the other things I need in my life like saving for retirement, food, etc.
Townhouses tend to be a bit better, around the $300/month range that I have seen. SFH HOAs tend to go $200/month or less, though I have seen some communities with golf courses that go up to $600+ a month, but I take it that is golf course maintenance.
I do believe the high HOAs for high-rise living is what is holding back urban development in the US. This just isn't realistic for the average American to be paying for. I think plenty of Americans would be more open-minded to condo/townhouse living if the HOA fees were more in line with reality.
Why are HOA fees so high across the board? And is there anything that can be done to cut them down to encourage the middle-class into higher density areas?
1. In my experience, you overstate the costs. Townhouses are in the 100-150 range in my experience. SFH HOAs can be 50 or less per month. I saw a golf course community at 200-250 or so. Of course all of this is local.
2. City high-rise living is expensive because of land and other costs (certainly elevators, more expensive parking, maybe doormen, etc.) It certainly doesn't appeal to everyone and never will. It does tend to appeal more to the luxury market, which of course costs more because the buyers want more.
3. I'm not sure how you are imagining one can make costs come down. Things cost what they cost. There is no conspiracy to keep HOA fees high. You can pay less for less and if that's what buyers want I expect someone will address that market.
4. I do agree that high fixed costs are something to be very concerned about. This, in fact, was one attraction for me to own a townhouse in an HOA community. Exterior maintenance is covered. After many years owning an SFH with continuing and to a degree unpredictable maintenance, I find my costs are down not up.
So I have a habit at looking at websites like Realtor and Zillow and looking at different properties.
Most high-rises I see are $800+/month for HOA fees, that is without the mortgage of course. This is for a variety of cities mind you, not just Phoenix where I live. That HOA fee also goes higher when you look at higher units. For an example, if you look at a penthouse unit, a HOA fee can be $2k/month.
If I were looking to buy a property right now, while I think ideally I'd look at a condo due to my lifestyle, I'd never consider such a high HOA. I can't fathom spending that much extra just on maintenance and a mortgage and of course all the other things I need in my life like saving for retirement, food, etc.
Townhouses tend to be a bit better, around the $300/month range that I have seen. SFH HOAs tend to go $200/month or less, though I have seen some communities with golf courses that go up to $600+ a month, but I take it that is golf course maintenance.
I do believe the high HOAs for high-rise living is what is holding back urban development in the US. This just isn't realistic for the average American to be paying for. I think plenty of Americans would be more open-minded to condo/townhouse living if the HOA fees were more in line with reality.
Why are HOA fees so high across the board? And is there anything that can be done to cut them down to encourage the middle-class into higher density areas?
1. Many, many folks do not want an HOA at all.
2. The very organization of an HOA is problematic. In most states the HOA is not obligated to do anything but the homeowner is obligated to pay. What kind of "service" is that?
3. Although "HOA" is often used to describe a condominium corporation - condominiums are a statutory form of ownership in every state and there are laws specific to condominiums that may or may not apply to HOAs. Those laws give condominium corporations tremendous power over the owners and the property that belongs to the owners. All of your high-rise "urban housing" is going to be condominium and that is a very poor investment and poor quality of life for most people. It's not just about the "fees" it is also about the lack of private space and the intrusion of a non-governmental entity into every aspect of your ownership and use/enjoyment of the property.
4. Why would anyone want to pursue urban living if it means being relegated to condo housing?
5. All too often urbanophiles are wholly fixated on appearances without any concern for utility or things you can't see (such as the legal entanglement and legal liabilities of involuntary membership organizations like HOA and condo corporations). There is good cause to avoid condominium housing.
Other items can be certain utilities like water, gas, cable, telephone, garbage (ours even has electricity included). Don't forget insurance, normally that is a big number on high rises. When something goes wrong, as Cully said you must have a staff to fix it, repair items must be replaced, the place must be kept clean, that is not free.
All the owner is responsible for is the inside of their unit, everything else must be supported by HOA Fees.
Exactly. It's meaningless to say "the HOA fees are too high!" without knowing exactly what is included in those fees.
Why are HOA fees so high across the board? And is there anything that can be done to cut them down to encourage the middle-class into higher density areas?
HOA fees cover a variety of things and have contingency budgets as required by law. HOA dues can cover property taxes, siding, roofs, fences, sidewalks, landscaping, snow removal, street maintenance including repaving, parking lot maintenance, maintenance of walkways, common area maintenance, street lights, pools, rec centers, mailings to the property owners, management fees, insurance, bank fees, legal fees, etc.
They are also required to have so much set aside in savings for issues that may come up - new roof emergency, lawsuits, etc. Far better to have funds set aside than give everyone a $5000 assessment and the owners all have to pay an additional $5K one month.
How do you cut down HOA fees? Don't move to a property with an HOA or look for one with low fees. Keep in mind that fees increase pretty much every year. If you want amenities and maintenance, then you have to pay for them.
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