Tuesday, June 12, 2012

Condo Fees Are Fed to the Dogs

Currently I live in a suburban town in southeastern Massachusetts with a condo association with a ridiculously low condo fee. There. I said it. I am sure that like any organization, there are people in my association who are happy and some who are unhappy.

A year ago, I was elected to the board of trustees of my condo association. That was certainly the case then; people were unhappy at the way the property looked and how much service they were getting for the money spent. However, now it is very clear to me that the amount of money that is being spent is not enough to cover the basics on the property. What is the result? People end up spending large amounts of their time and frankly, wasting large sums of money on the property.

Condo fees in townhouse style condos typically go toward building maintenance, plowing, and landscaping. In our complex there is no pool, no clubhouse, no exercise room or other shared space. The net result is that the fees can remain relatively low. However, there are people who are not keen on paying money in order to keep up a nice condo. This is a problem for owners who want an overall nicer complex.

This, like many things is something that falls under the Tragedy of the Commons category. Common areas like driveways, exteriors, and common landscapes are items that those who choose to pay less, pay late, etc still enjoy while everyone else pays more. Of course there are options for handling late payment, but it is difficult and in smaller associations, it is difficult because your neighbors are not strangers; they are literally next door. In some sense, it brings real, deliberate meaning to the phrase: all politics is local.

This, like many things in life is an example of how an ounce of prevention is worth a pound of cure. I don't expect that things will become easier to handle over time; and the larger the problem, the more intense it becomes. In short, I hope that things get better in the economy, because there are many folks out there who are struggling to pay their bills in the short term, and in the long term, it is not likely to get better.

In terms of strategy, at a local level, I don't see any solutions other than the following, which are much like those being done by governments and organizations small and large throughout the world:
1. Raise Taxes (fees in my case)
2. Manage projects tactically -- in my case it means doing things quickly to prevent problems from becoming larger.
3. Consider alternatives; in my case, there are some jobs that are being done by volunteer efforts to reduce the overall cost.

At the same time though, I am interested if there are any other strategies that have been considered for budget crunches and also what your fees are if you live in a condo/where it is located.

No comments: