Four Issues Impacting Condo, Co-op, and PUD AssociationsSeptember 02, 2016
| IREM Staff
The fortunes of association management are often affected by what is happening in the single-family housing industry. While single-family housing construction grew modestly in 2015, it is barely halfway back to its pre-recession levels.
Some of the issues impacting the management of condominium, co-ops, and planned unit development (PUD) associations include:
- Growth in renters – the decline in home ownership, and the level of foreclosures continues to raise the number of renters occupying condominiums, co-ops, and PUDs. Investors are buying up units specifically to rent instead of occupying. It can be troublesome to enforce association rules, or even know who the renters are.
- Collection enforcement – association boards are becoming more aggressive in collecting association fees. Associations are more likely to go after delinquent owners, including bank-owned units. Monthly assessments and replacement reserves saw significant increases in 2015.
- Energy expenses – associations are taking a harder look at energy consumption, especially in older communities. The need to save money have encouraged associations to look at projects that have long-term impacts, like solar power and energy-saving roofing materials.
- Unit-owner distrust – unit owners are seeking more access to information on accounting details, budgets, and work orders. Unit owners are increasingly interested in making sure their money is being spent wisely.
The need for transparency, and the need to show unit-owners that their investment is well managed makes IREM’s Income/Expense Analysis®: Condominiums, Cooperatives, and PUDS even more critical for analyzing an individual property performance.
The following charts highlight some of the national trends related to these developments.
The IREM 2016 Income/Expense Analysis Reports are available in softcover book, interactive PDF/Excel, Online Labs and Metro Reports.