Despite their sometimes-unfavorable reputation, homeowners associations are more popular than ever. It’s estimated that roughly 62% of newly constructed homes are built in HOA communities. Moreover, homes in governed neighborhoods are selling faster, and for more money. That’s because these properties are often in better shape than homes that are not regulated by an association. 

Rules and fees contribute to more valuable homes 

HOAs are resident-run, private organizations that govern buildings, complexes or neighborhoods. HOAs have rules that every member must follow, and it’s up to the HOA board to enforce them and ensure the association is operating well. The rules are designed to:

• Help keep the neighborhood’s appearance consistent
• Maintain property values
• Create an enjoyable living environment for homeowners

HOAs also provide upkeep of common areas, and sometimes, the property surrounding the homes. Owners may have access to shared pools, tennis courts, clubhouses, playgrounds and more. But this doesn’t come for free. In exchange for these services and amenities, owners are obligated to pay HOA fees or dues. Fees may be charged monthly, quarterly or annually.

Those who want to be a part of an HOA usually make their choice based on convenience, safety, and cleanliness. Most agree that the rules have a positive impact on their property, and the community as a whole. They appreciate that something will be done if a neighbor leaves garbage all over their lawn or lets their deck deteriorate. They also enjoy the sense of community that can be found in any happy association.

According to the 2020 Homeowner Satisfaction Survey, 89% of residents rate their overall community association experience as very good, good, or neutral. That same survey found that 62% of residents believe their HOA fees are just the right amount, or not enough. But, if you’re not prepared to pay for the additional HOA fees, you might not be so eager to become an HOA member.

Can you avoid HOA fees?

Unfortunately, you’ll be required to pay fees if you buy a home that belongs to an HOA. If you want to avoid them, then don’t purchase a home that is governed by an association. If your HOA is voluntary, you could avoid fees; this type of setup is uncommon though as it puts a lot of pressure on the volunteers who are trying to maintain the neighborhood.

The only significant exception is if you purchased a home before the neighborhood transitioned into a homeowners association. In that case, you could deny membership and avoid paying fees.  

If you join an HOA and do not pay the fees, the board can use certain powers to collect the money. Depending on the state you live in–and the HOA’s governing documents–those powers might include restricting access to shared facilities, issuing additional late fees, placing a lien against the property, and in very extreme cases, foreclosing on the home.

Average HOA fees in the United States

HOA fees vary quite a bit. Costs will change depending on your geographical location, as well as the type of community you live in. If you belong to a luxury condominium complex, you could expect to pay over $1,000 in fees each month. A community with one or two simple amenities will be much less expensive. But most monthly fees sit in the low to mid-hundreds.

Many associations also include utility bills in their monthly fees (gas, landscaping, and water). For some, this simplifies the task of monthly home maintenance, and makes bill payment less tedious. Instead of having to remember six or seven due dates, you only need to remember two or three.

Using the Census Bureau’s American Community Survey data, Zillow estimated that the median HOA fee in the United States was about $290 per month. But another tricky thing with HOA fees is that they are not static. Like other regular expenses, they usually increase after a year or two, depending on the needs of the association.

Even though everyone would prefer to pay as little as possible, low HOA fees aren’t necessarily good either. Fees are needed for maintenance, paying staff, and the reserve fund, and without adequate revenue, the association will find itself in financial trouble. That could force the board to take out a loan, or levy a special assessment. 

Average HOA fees in different metro areas

In order to give you a better idea of how much Americans spend on HOA fees every month, the American Housing Survey (AHS), published on the United States Census Bureau, has released information collected from real people. The AHS asked Americans about their monthly housing costs, including their mortgage, insurance and utilities.

The data below is from 2019. The fees are median monthly amounts, and are in U.S. dollars. Keep in mind that these are educated estimates, and fees may have increased since the survey was conducted. 

Albuquerque – $150

Atlanta-Sandy Springs-Roswell – $280

Boston-Cambridge-Newton – $310

Chicago-Naperville-Elgin – $280

Dallas-Fort Worth-Arlington – $260

Detroit-Warren-Dearborn – $230

Las Vegas-Henderson-Paradise – $180

Los Angeles-Long Beach-Anaheim – $340

Miami-Fort Lauderdale-Pompano Beach – $300

New York-Newark-Jersey City – $410

San Francisco-Oakland-Hayward – $400

Washington-Arlington-Alexandria – $350

Before you become an HOA member

If, after reading this, you are still looking to move into a homeowners association, don’t forget this advice once you’ve found your dream home: when you reach a purchase agreement with the seller, but before you finalize the deal, you’ll want to review the association’s documents – including financial disclosures and board meeting minutes. Reviewing this information will give you a better idea about the HOA’s finances, including:

• How much it has in the reserve fund. A healthy reserve fund means the association is in a good place to cover major planned repairs, as well as unplanned repairs, without increasing monthly fees by too much or levying a special assessment
• If special assessments have recently been collected from homeowners
• Whether the HOA is facing any legal troubles
• How frequently the association has raised fees in recent years

If you see any major red flags, you may need to reconsider whether you can afford to move into this community. Your final decision shouldn’t be based on finances alone. In addition to checking on the HOA’s financial details, read over the CC&Rs. This contains all of the rules you would have to comply with if you moved into the community. Specifically, check on items that pertain to pets, vehicles, rental restrictions, landscaping, exterior home appearances and architectural changes.  

Conclusion  

If you’re thinking about moving into an HOA, make sure to budget HOA fees or dues into your recurring expenses. While paying more money isn’t exactly a selling feature, the services you get in exchange for that money are often worth the investment. Instead of spending your weekends mowing the lawn or shoveling snow, you can use that time to relax, perhaps by the community pool. Plus, if someone decides to put Thanksgiving decorations up in the middle of May, you can submit a formal request to the association and they will make sure the issue is addressed in a timely manner. Of course, HOAs aren’t for everyone. Some people don’t want to be governed by all of those rules – and that’s okay too!