HOAs can go from the bare minimum "we pay someone to mow the center divider" (some will actually exist and have no fees) to the "we pay for the entire country club this house is part of, including limo service and more".
Condo HOAs usually cover the maintenance of the shared building parts (HVAC, roof, plumbing outside the units, etc). One danger sign is a condo with a HOA that is too low - it likely means maintenance is being put off or done incorrectly or you're going to get hit with a special assessment soon.
Yes, but I ended up buying a 1br in SF for a comparable price. The HOA fee was $650/mo. The building had 24/7 front desk staff, twice-monthly unit cleaning service, a small gym, a hot tub, and a full-time building engineer. All the while dealing with a lawsuit against the builder for leaks. And our reserve was quite funded. Where was the money going in Chicago?
If they were suing the builder, it was probably still a relatively new building.
Older buildings start getting hit with the "every 20/50 years" maintenance, and also get hit with lawsuits against the building/HOA itself. Those can start to add up over time.
And the size of the building can also affect it; a smaller building with the same amenities would have higher HOA fees.
I personally wouldn't touch them with a fifty state pole, but some people like it.
My first apartment in SF was a condo. The landlady offered to sell it to me, but I lost interest when I realized $1600 of the $1900 I paid in rent went to the HOA.
These cost levels are either employing a lot of service (valet, doorman, etc) or are under-accrued for the big CapEx bills they have coming due (careful!)
Not sure how you figure? Minimum wage in Illinois comes to $2600/month for 40 hours/week. You're giving them a room in a place where the prevailing rent is clearly over $2000/month, which is hard to price at less than $1000/month (a "two roommates" situation)... so your proposed value package is well over twice the HOA fee.
Single employee is 11$/hour in Chicago unless they are a domestic worker.
$15.40 for employers with 21 or more employees (including all domestic workers, regardless of the number employed) $14.50 for employers with 4-20 employees
I think we might be saying the same thing? My reading of the grandparent was that the individual responsibility for the HOA / maintenance fee was outrageous because it "literally" represented approximate CoL for a whole additional human, which just isn't accurate. But the entire point of these collective fees is to pool them and use them for amenities which are not available to individuals. Of course collecting money and spending it represents the ability to pay for labor; that's the dominant cost of most expenses! I'm not too familiar with the Chicago housing market, but in the New York market these fees go to pay full-time salaries for supers, doormen, elevator men, maintenance folk, etc., many of whom also get housing in the building at a reduced or included rate.
One would have to check that particular example, but in general, there are buildings in SF and NYC where the HOA fee covers amenities that are, frankly, hotel-like. Staffed gym with climbing wall, 24/7 valet parking, food can be sent up from the ground-floor cafe at no delivery cost, etc.
Everyone forgets about insurance, which often comprises a major portion of expenses especially as buildings gets older and the hoa management gets less eager to price shop.
I'm not sure of that for a variety of reasons. Labor is more expensive in higher cost areas. Elevators in a skyscraper are built to a much more stringent code than elevators in a three story building. Building codes in general may be higher. Quality of materials and fit and finish may be higher with higher maintenance costs. There may be more regulatory hurdles to making any new construction or renovations. HOAs may include real estate/other taxes and mortgage interest payments in some cases. Tons of little things can add up.
Absolutely. HOAs bring out the worst in people. If you're reading this and you don't own a house/condo yet, think twice before you buy into an HOA community. HOAs can quickly devolve to point where entire meetings are spent discussing whether or not someone should be allowed to put chickenwire on the bottom of their back fence (true story).
And, unlike you're principle payment (which at least is an asset), HOA payments are something you will never see any return of value on, especially since they reduce the desirability of the property in question. If you doubt this, Just ask anyone who's had an HOA, whether or not they'd rather buy a property with an HOA or one without.
At the same time, you should consider possible shenanigans that your neighbors may get up to. While there is always a lot of petty stuff going on in our HOA, I also see a lot of chatter from people on nextdoor who don't live in an HOA and their neighbors can be quite annoying. Loud roosters waking you up at 4am and the like.
Many of the "hoa-style" complaints can be dealt with by careful inspection of the local laws before buying. You can find communities that ban roosters (the one I'm in does, and charges $25 a year "hen fee" for up to three hens lol).
Living with other people is annoying, but you can work to mitigate the biggest issues, and sometimes the right answer might be a HOA. Investigate the HOA before buying and talk to your potential neighbors. Many people will gladly go out to dinner/drinks if you ask and bitch about any problems there may be.
And there will always be problems; the key is determining if they'll be annoying enough for you to bypass it.
One friend years ago pointed out that he could buy a much nicer house if he spent the HOA payment on mortgage instead; and so went that way.
not all the rules are in the HOA booklet. For example, ours doesn't say anything about banning vegetables in the front yard, not a single rule. And yet, if we even so much as grow fava beans, the HOA will say we can't do that due to the catch all rule: "No unplanned modifications". It's all up to the HOA directors mood and discretion. And while you may currently have a reasonable HOA board, that can quickly change with just one election.
Wow - "no unplanned modifications" is a really big loophole, I wonder if that refers to some "master plan" somewhere in a cupboard behind the leopard.
And yeah, the elections can change everything - and sometimes nobody cares and you can run for the HOA board and effectively take control muahahahahah.
Er, I wouldn't know anyone who would do that. Ever.
It can also be changed more permanently with changes to the covenants. Many covenants require a super majority vote of the members so even a future bad board member can be restrained to an extent.
I have a home in an area without an HOA and I have had a 100% resolution rate by just talking and explaining. Being decent and pragmatic goes a long way.
For shared building situations, like a condo in a downtown highrise, I think they're unavoidable: there's inherently shared resources that require maintenance and co-ordination, even if there's a mininum of services. Add in things like a pool, shared gym, doorman, or large recurring maintenance (roof), and you absolutely need a governing body to collect costs for that and handle the work, which is, in essence, an HOA.
You're confusing apartment living vs. living in your own private house with an H.O.A
You can't live with 200 other families in a shared building without some sort of structure. What's allowed and what isn't, Can dogs swim in the shared pool? Can you ask the doorman to go find a parking spot around the block?
The HOA in question is a shared building. Which is more like a corporation, with 20-30 employees.
In my mother's apartment building there a guy who uses his kayak in the swimming pool to practice his rolls etc. You can imagine the angst when parents bring little Johnny down for his swim. Or when tenants have a rowdy party around the pool. She is grateful that COVID rules effectively shut the pool down for a couple of years. So yeah I can totally imagine someone wanting to let their dog swim in the pool
Oh god you don't even know. A pool in a shared living building/setup is a recipe for every sort of possible disaster known to man, and some known only to an advanced AI trained on horror movies.
"Another reason to avoid HOAs at all costs, over the lifetime of the property the cost is astronomical."
Hate to break it to you, but the maintenance costs for a house over the lifetime of the property are astronomical. True, if you are a do-it-yourselfer and want to do all the maintenance work yourself you can save money. But the comparable cost to pay someone for things like yard work, internal repairs and upkeep is, in my experience, much higher in a house than a condo because you don't get the benefit of scale and good, defined supplier relationships. E.g. in a condo building you're paying a landscaping company to do the yard work, but that work is split amongst 50 or whatever condo owners.
Too many people think of an HOA fee as throwing away money, but I think it's a net savings in a small and well-run HOA (and these do exist!). The money all goes to the upkeep of the building or complex with minimal overhead, so none of the fee feels wasted: it'd cost more to do it alone. A local management company charges a fee but they're local employees and it's better than trying to manage the books myself. Larger HOAs -- like where full-time maintenance staff is necessary -- can have very high fees, but, paying people fairly on an ongoing basis requires ongoing money, no matter how you slice it.
Part of the challenge is determining the quality of the HOA before buying, and that quality can change over time. And you may have minimal influence over it.
They also save a ton of time spent on sourcing maintenance, getting competitive bids, and managing the process. Not something most can appreciate until they own an older home. They also reduce the odds of one batshit crazy neighbor destroying quality of life and property values for the rest.
I know places in Austin where (and this was years ago), HOA fees were $1100 for a condo in the $1.2 million range.
And, to be clear, I'm not saying 941 is "cheap" on an absolute basis, just that it is for a condo that is already that expensive.