I think this is about right. As an owner or prospective buyer I would not be impressed by a hodgepodge of marginal fund raising ideas. I don’t think the amount of work you’ll need to invest will make them good investments, and they send a signal that you’re in trouble.
A better idea is a deep retrospective into how the HOA got into this position in the first place. Why are you having difficulty balancing the budget or adequately funding the reserves? Are you providing services that can be cut or renegotiated? Are you sure you’re spending money wisely? Maybe your monthly and one time assessments are simply too low. You need to decide what you want, and set those rates appropriately.
I’m quite fortunate to own a condo on the east coast that has a very well run HOA and management company. We’ve had zero special assessments and zero monthly dues increases in ten years, and our reserve fund is well stocked and has proven more than sufficient to cover big ticket items.
I can’t say that I was wise enough as a first time buyer to do a deep due diligence into figuring that out, and probably just got lucky. But I will be next time Also, the runner up condo when we were buying was so obviously disfunctional (special assessments all the time, huge monthly rates, seller practically begging us to buy the place by offering to pay seven years of fees!) that we ran away as fast as our legs could carry us.
Short version: get your financial house and reserves in order in a sustainable manner, otherwise it’s a big red flag for buyers, which might be affecting your property prices.
I’d charge for clubhouse usage, if someone wants exclusive use for a party or shower or whatever. Fee due before you can pick up a key. Extra fee if the clubhouse isn’t cleaned and vacuumed before turning the key back over.
Increase the cost of vending in the common areas.
Community-wide yard sale with a charge to participate. Homeowners pay $20 (or whatever is reasonable) and the community pays for advertising, balloons at the entrance, that sort of thing. Could be done in tandem with a community fair. A cookout (charging for the food), a couple bounce houses (charging for that), maybe free face painting.
Or, explain to the homeowners that garbage collection has gone up, snow removal has gone up, etc. And raise the rates. If you publish your budget showing that you’re not embezzling the funds, people should understand.
Yard sale.
Either a big combined sale, fueled by donations, or community-wide individual sales on the same day, where participants pay a small fee to join. The fee could be justified by HOA-provided publicity, maps, etc.
Have you surveyed the surrounding neighborhoods to see what their expenses and assessments are? If other neighborhoods of similar size with similar amenities are spending, say, $1MM per year and you’re spending $2MM per year, then that’s your problem right there. If similar neighborhoods are charging $500 per year per house, and you’re charging $100 per year per house, then that’s your problem right there.
If nothing else, it’s good to see what deals are available and what places to get away from. Making friends with other neighborhoods is almost always a positive.
OP is being pretty cagey about what the actual budget numbers are. Unfortunately a lot of the suggestions, like bake sales, yard sales, and increased vending machine costs (my neighborhood doesn’t even have a vending machine), are generally low ticket items that will contribute maybe $1000/year, while HOA budgets are usually in the six figures for a decently large neighborhood. This is NOT a case where “every little bit helps” because every little bit requires effort from the board and constant fundraising is annoying to the residents.
It may be that some ‘freebies’ need to be charged for (for example, if you lose your pool fob in my neighborhood, it’s $25 for a new one. A non-functioning one will be replaced free) and it may be the case that some rental fees (like for the clubhouse) need to go up to market rates and it may also be the case that revenue generating items (like renting the clubhouse) need to be promoted so people will actually rent it for Timmy’s birthday or whatever.
Don’t you want your HOA to break even? Every bit of money spent on everything that’s already agreed upon, nothing more or less. Then special projects & emergencies are paid for by special assessment which is good because the current occupants pay for the current extra needs?
I was assuming your HOA was a typical such organization creating rules for homeowners owning property in the HOA coverage area, but it you’re paying everybody’s taxes, electricity, gas, sewer, water, trash collection fees etc. it sounds a lot different from conventional HOAs.
Just like for a family budget, you want to build up some reserves. The idea is that when emergency strikes, you write a check against the reserves instead of doing a special assessment. A special assessment is a China-sized red flag that the HOA is mismanaged. (Granted, it could be that there was a perfect storm of emergencies, but usually it means mismanagement).
You know the pool will need repairs every so often, so you budget for it in reserves. The same with the tennis courts, the street lights, the clubhouse, the playground, etc.
Sell merch/swag. Maybe beach balls, sunglasses, blankets, etc. for the pool. Also umbrellas, calendars, first aid kits, flashlights, tech items, candies/chocolates, etc. Shoot me a PM if you want me to hook you up.
Collect bad debts
Email the monthly newsletter instead of mailing it
Have volunteers do some of the groundskeeping work
Charge a small admission fee to cover supplies for HOA-organized activities
“Split the pot” to raise money for a specific project
Water every other day instead of every day, or reduce watering by 25%
It might be worthwhile for the HOA to break out the part of the owners’ fee that is just passed along (the water bill, taxes, insurance and so forth) and the part of the owners’ fees that’s spent directly by the HOA. The HOA obviously has much more control over the second pool and if an increase is needed due to changes in that second pool, people might be more or less understanding.
I’m not the OP, but for my condo the fees include water (which isn’t metered per unit). I’d be surprised if the HOA also covers electricity and gas, but even if it doesn’t they’ll probably have bills for the common areas. Our building had shared hot water infrastructure, which probably accounted for the HOA gas bill. But individual home owners had individually metered gas and electric accounts too.
Exactly. And I’m not sure how you could react to an emergency with no reserves. You can’t ask owners to pony up $10k in 24 hours. At least not successfully.
My HOA (all townhouses) used to own two of the units (out of about 200 total). One was occupied by the on-site maintenance manager; the other was used for tool storage. Then, in what I can only assume was a money-saving move, they stopped providing free housing to the manager, and moved tools to a cheaply built out-of-site shed. They sold both units, bringing in a nice chunk of change, as well as adding two more units worth of monthly dues.
This.
The costs of maintaining a building go up very year, it would be odd if that wasn’t reflected in HOA dues. If you can show a rational relationship between your cost increases and the dues increases, then people shouldn’t go nuts over them. My HOA goes up a few percent every year- but then so do most of the bills they pay.
If you are looking to increase the reserves, put real numbers in front of people, for example “An emergency roof repair will cost _______. Based on our current reserves, we will need to have a special assessment of ______. Or, we can raise dues ~ ____/month/unit.” Some people will grumble, but most, when faced with the very real possibility of having to come up with a very large emergency bill will opt for the smaller monthly option.
We pay for water and garbage for everyone. (no individual water meters.) Taxes (minimal), electricity, gas, and sewer are for those used in the common areas and aren’t too expensive.
We’ve tried to encourage water conservation, and that has helped a little, but the bill is still large.
I’m not being cagey. I just didn’t want to bury everyone with details. Our complex isn’t very large, having ~70 units and an operating budget of ~$185k. We have a pool, a clubhouse, and we own our roads. We don’t currently charge a rental fee on the clubhouse, but we are considering it. Currently, about 1/3 of our income is being directed to reserves, and our reserves are pretty low. (Reserves were neglected by previous boards until the last few years.)
We have no vending machines, and no other source of income than monthly dues and interest.
We have no bad debts. We have no monthly newsletter. Communication with residents is already done via email, except for ballots. We currently have no HOA-organized activities except pot-luck holiday parties. We’ve encouraged water conservation to try to lower our water bill, but that bill (while it has decreased about 10%) is still the largest single budget expense.
Also, the runner up condo when we were buying was so obviously disfunctional (special assessments all the time, huge monthly rates, seller practically begging us to buy the place by offering to pay seven years of fees!) that we ran away as fast as our legs could carry us.