Understanding Rising HOA Fees: Why Costs Are Increasing and How to Plan Ahead

If you've noticed your HOA fees climbing year after year, you're not alone. Across New England and nationwide, homeowners in condominiums, townhome communities, and garden-style developments are facing the same reality: the cost of association living is rising steadily. Whether your community has 10 units or 300, these increases are affecting everyone.

As a property manager who works closely with HOA boards and homeowners, I understand how frustrating and concerning these increases can be. No one wants to see their monthly fees go up, especially when household budgets are already stretched thin. But understanding why these increases happen—and how to plan for them proactively—can help your community stay financially healthy while minimizing sticker shock down the road.

The Reality: HOA Costs Are Rising Everywhere

It doesn't matter if your community features standalone single-family homes, attached townhomes, or multi-story garden-style buildings—rising costs are impacting all types of associations. The trend has been particularly pronounced over the past few years, and unfortunately, it shows no signs of slowing down.

The truth is, your HOA isn't immune to the same economic pressures affecting every other aspect of your life. Let's explore why.

Key Factors Driving HOA Fee Increases

1. Inflation and the Rising Cost of Living

Inflation is the elephant in the room. Over the past few years, the cost of nearly everything has increased dramatically—groceries, gas, housing, and yes, the services and materials your HOA relies on. When inflation drives up costs across the board, your association feels it in every line item of the budget.

From landscaping services to snow removal, insurance premiums to utility bills, vendors are charging more because their costs have increased too. Your HOA can't escape this reality.

2. Skyrocketing Insurance Premiums

Insurance costs have become one of the fastest-growing expenses for HOAs nationwide. Property and liability insurance premiums have surged due to increased claims, natural disasters, and a tightening insurance market. Some communities have seen their premiums double or even triple in just a few years.

This isn't something your board can negotiate away—it's a market-wide trend affecting all associations.

3. Aging Infrastructure and Deferred Maintenance

As communities age, so do their roofs, siding, pavement, mechanical systems, and common area amenities. What was new and maintenance-free 10 or 20 years ago now requires regular repairs and eventual replacement.

If your association has been underfunding reserves or deferring maintenance to keep fees low, those costs don't disappear—they compound. Eventually, the bill comes due, often in the form of steep fee increases or special assessments.

4. Labor Shortages and Wage Increases

The labor market has been tight, and skilled tradespeople are in high demand. Plumbers, electricians, landscapers, and maintenance workers are commanding higher wages, which means higher costs for the services your HOA depends on.

Additionally, many vendors are struggling to find reliable staff, which can lead to longer wait times and higher service fees.

5. Utility Cost Increases

If your association pays for common area utilities—electricity for hallway lighting, water for landscaping irrigation, gas for heating clubhouses—you've likely seen those bills climb. Energy costs have been volatile, and water and sewer rates continue to rise in many municipalities.

6. Regulatory and Compliance Changes

New building codes, safety regulations, environmental requirements, and accessibility standards can all add to your association's operating costs. While these regulations are designed to protect residents and the environment, compliance often requires additional spending.

7. Increased Demand for Amenities and Services

Homeowner expectations have evolved. Many communities now offer amenities like fitness centers, pools, playgrounds, and community events that require ongoing maintenance, staffing, and insurance. While these features enhance quality of life, they also add to the budget.

Why New Associations Must Plan Ahead

If your association is newly formed or still in its early years, you have a unique opportunity—and responsibility—to set your community up for long-term financial health. Here's the hard truth: no one wants to increase fees, but gradually increasing them from the start is far better than facing dramatic hikes or special assessments later.

The Danger of Keeping Fees Artificially Low

It's tempting for new boards to keep fees as low as possible to attract buyers and keep homeowners happy. But this approach often backfires. When fees are set too low, the association:

• Underfunds reserves, leaving no cushion for major repairs or replacements

• Defers necessary maintenance, which leads to bigger, costlier problems down the road

• Falls behind inflation, making future increases more painful and abrupt

• Risks special assessments, which can be financially devastating for homeowners

  
  

The Smart Approach: Gradual, Predictable Increases

A better strategy is to build in small, predictable fee increases from the beginning—typically 3–5% annually. This approach:

• Keeps pace with inflation and rising costs

• Builds healthy reserves for future capital projects

• Avoids sticker shock by spreading increases over time

• Demonstrates fiscal responsibility to current and prospective buyers

• Protects property values by ensuring the community is well-maintained

Homeowners may grumble about a $10 or $20 monthly increase, but they'll be far more upset by a sudden $100 jump or a $5,000 special assessment because the association ran out of money.

What Your Board Can Do

1. Conduct a Reserve Study

A professional reserve study identifies your community's major components (roofs, pavement, siding, etc.), estimates their remaining useful life, and calculates how much you should be setting aside each year. This is the foundation of responsible financial planning.

2. Budget Conservatively and Transparently

Build budgets that reflect realistic cost projections, not wishful thinking. Share detailed financial reports with homeowners so they understand where their money is going.

3. Prioritize Preventive Maintenance

Regular inspections and proactive maintenance can extend the life of your community's assets and prevent costly emergency repairs.

4. Communicate Early and Often

When fee increases are necessary, explain why in clear, straightforward language. Homeowners are more likely to accept increases when they understand the reasoning and see that the board is being responsible with their money.

5. Work with an Experienced Property Manager

A knowledgeable property manager can help your board navigate budgeting, vendor negotiations, reserve planning, and compliance—all while keeping costs under control and homeowners informed.

The Bottom Line

Rising HOA fees are an unavoidable reality in today's economic climate. Inflation, insurance costs, aging infrastructure, labor shortages, and regulatory changes are all contributing to higher expenses across the board.

But with proactive planning, transparent communication, and a commitment to long-term financial health, your association can weather these challenges without resorting to drastic fee hikes or special assessments.

For new associations especially, the time to act is now. Gradual, predictable increases today will save your community—and your homeowners—from financial pain tomorrow.

Your community deserves thoughtful, transparent management that prioritizes both quality of life and fiscal responsibility. If you have questions about budgeting, reserve planning, or navigating rising costs, we're here to help.

Dahlia Property Solutions provides personalized HOA and property management services throughout Massachusetts and Rhode Island. We believe in transparency, proactive planning, and putting your community first. Contact us today to learn how we can support your association's financial health and long-term success.