Healthy, vibrant, sustainable neighborhoods are not created by chance. They do not happen accidentally. They are the result of careful consideration, strategic planning, and forward-thinking collaboration. This costs both time and money.
Meanwhile, the financial obstacles to homeownership are undoubtedly significant, and no one wants to pay yet more in fees and taxes. At the same time, homeowners’ associations are charged with providing specified – and, many argue, excessive – amenities which they are required to maintain in perpetuity.
When is too much simply too much?
What Are We Paying For?
An increasing number of us are living in homes that belong to homeowners’ associations (HOAs). Almost two-thirds of new homes started in 2021, for example, are part of community associations, and some 74.2 million Americans live in HOA neighborhoods. There must be a reason for their surging popularity. And it must be the amenities, right? The ponds. The pools and clubhouses. The private parks and gazebos.
Counter to what many may believe, people aren’t clamoring for these amenities. In fact, according to data from the National Association of Home Builders (NAHB), the majority of homebuyers do not want them. The NAHB discovered that the most desired features are a suburban setting, public park area, walking paths, proximity to retail space, and, for millennials and younger buyers, playgrounds.
But as Deborah Goonan points out in Independent American Communities, “Suburban locations preferred by most homebuyers already tend to have commercial and public land uses that provide those most desired neighborhood preferences [e.g. fitness centers, public parks, etc.].”
The added cost of many amenities is an issue, particularly for younger buyers. In many instances, the builder or developer is required to pay a park impact fee to the municipality in addition to including neighborhood amenities and accounting for their ongoing maintenance. These costs, of course, are ultimately passed onto the homeowners and to the HOA.
Homeowners must pay monthly or annual dues to the HOA on top of their mortgage. Then, the HOA must professionally manage these amenities and sometimes must incur legal fees to enforce community rules and pursue delinquent accounts. These costs add up year-over-year.
Are Requirements for HOA Common Areas and Amenities Excessive?
A community in Central Indiana with around 335 homes averages a cost of $65,000 each year just to mow and maintain common areas. This equates to almost $200 per home and does not include snow removal, playground upkeep, pool/pond maintenance, insurance, etc. These expenses add up – and will continue to increase with rising inflation, fuel, and labor costs.
Requirements for housing developments introduce an additional cost at purchase. Beyond that, the HOA and the homeowners alike must account for future amenities, upkeep and maintenance, and inflation. It costs more to mow, for example, because vendors charge more and because gas is more expensive. The homeownership process is more difficult than ever, and this can feel like just another burden. One that does not lighten over time as HOAs must often raise fees to keep up with requirements.
But is it “excessive”?
Megan Vukusich, Director of Planning & Zoning for the City of Fishers, says, “Our standards are written to be flexible and adaptable. We don’t want it to be just a checkbox that developments must hit but that are actually a benefit to the community. For example, we promote sustainable features that will reduce maintenance costs in the long run.”
Vukusich adds, “[Fishers] wants to promote physical and mental health. We want great design that benefits our residents and ensures our communities continue to be vibrant places to live.”
While the intention is to provide a better quality of life, requirements unfortunately also add to the costs for developing that community. And, indeed, for living in it.
This is an issue that impacts every link of the chain, from developers to homeowners. And it is one that cities like Fishers are taking proactive steps to address.
The Neighborhood Vibrancy Grant
Vukusich says, “We’re a relatively young community; development started in the ‘80s and ‘90s. [Fishers] is at a point now where some of our neighborhoods are starting to age. With that you have more maintenance costs. We’re seeing that not just from the city side but also for HOAs, which are responsible for maintenance of their common areas.”
To help defray costs, Fishers offers a Neighborhood Vibrancy Grant (https://www.fishers.in.us/1076/Matching-Grants). This is a 50% match for neighborhood projects up to $5000. With $100,000 earmarked for communities around the city, Vukusich and her counterparts place a heavy focus on improvements that reduce maintenance costs in the long run.
One community, she notes, converted 14 acres of mowed grass into a native prairie. Once established, “it’s going to be sustainable for that neighborhood and reduce the long-term cost for homeowners. It also has the extra benefit of being environmentally friendly.”
“This program has been in place since 2000. In that regard, we really were forward thinking, anticipating our neighborhoods would age and developing a way to provide extra assistance.” Applications open every year on November 1, and communities have until January 31 to submit their project for consideration. “We’re looking for innovative projects,” Vukusich says, “and priority is given to neighborhoods that are ten years or older.”
“With aging communities, we’re looking to reinvest in smarter ways so they do not have those large maintenance costs. For example, instead of just doing sod, think about a different approach to landscaping that doesn’t require irrigation, mowing, and so on. Being thoughtful about improvements and what maintenance looks like long-term helps keep those costs in line.”
Healthy Communities Don’t Just Happen
We must plan for sustainability, both in terms of amenities and finances. Vukusich says communicating and collaborating with developers from the outset is essential. In a recently approved development of only 60 homes, for instance, Fishers worked with the developer to enable them to meet open space requirements in a cost-effective way.
“They are going to dedicate land to the city for us to maintain and own as a future park area. We work with the developers, knowing that the HOA may not have the financial capability to maintain that area in the long-term. They donated that land at no cost to meet their open space requirements and also so they did not have to pay for maintenance. Residents still have access to that open space but not at their own expense.”
Creative solutions exist when stakeholders come together to develop vibrant neighborhoods that meet residents’ needs now – and in the future. This is how we build strong Indiana roots. Learn more at https://buildindianaroots.com.