HOAs Across The US: The Good, The Bad... And Is It Worth It?

Article Courtesy of  The Financial

Published June 27, 2021


While living in an HOA has its perks, there have also been rising cases of dissatisfaction with the level of control HOAs assume. More recently, the Colorado House passed a bill removing HOAs' rights to regulate political signs and flags.

Yet, when looking for a new home, you cannot deny the appeal and popularity of HOAs. In a 2019 study, it was found that almost 60 percent of newly constructed single-family homes and 80 percent of houses in subdivisions belonged to a Homeowners Association (HOA). Their rise in prominence and popularity has been sustained for decades now - as have the reports of disapproval. With the conversation getting louder and federal authorities moving to implement ground rules against HOA abuse/monopolies, many homeowners are left questioning their choice of an HOA home - and whether the perks are worth the downfalls.

Pro: HOAs Protect Home Prices

A big bonus for choosing an HOA is that it can increase the price of your home if you're thinking of selling in the future. In a study by George Mason University, it was shown that an HOA can boost property values by 5 to 6 percent when compared to the price of a house that does not belong to one. This is attributed to the HOA’s ability to create and maintain desirable neighborhoods - i.e. curb appeal.


The reduced burden of homeownership that it brings also comes with a pretty hefty price tag. In a Freedom Debt Relief report, 30 percent of homeowners were stressed about homeownership. Taking over the responsibility of maintaining the exterior of homes can relieve that pressure - something homeowners value.

Con: With The Added Benefits Comes Less Freedom As A Homeowner

The level of control that your HOA's Board of Directors has will vary according to your state and individual HOA. In some cases, you may find that strikes the perfect balance between taking control of the maintenance and allowing you to retain control of your home. However, there have also been reports of HOA abuse and overbearing HOA violations.

While most HOA fees start at $25, a Central Florida couple recently has been engaged in a two year-long battle with their HOA, which has threatened to foreclose their home due to unpaid annual dues - even though they had paid a month before legal action was taken. The couple ended up receiving a settlement, but the case is just one of many where HOAs have been criticized for abusing their power. On the other hand, HOA management in Charlotte NC has seen the state consistently ranked amongst those with the best value HOA in the country, coming after California and Texas. Included in their fees are budgeting and bookkeeping, communication with owners, and emergency repairs and maintenance. Therefore, finding a good HOA is essential to defining your experience with the HOA lifestyle.

Con: Getting Into A Bad HOA Can Actually Cost You More Than Annual Fees

A downside of living in an HOA is that it comes with additional costs, namely annual HOA dues. HOA fees have been on the rise since 2005, according to reports from Trulia. Back in 2005, the average HOA fee was $250. By 2015, that had increased to $331. Fast forward to today, and homeowners are paying as much as $570 in states like New York. They are also not static, and will keep rising with HOA regulations and inflation.

Living in an HOA can also come with hidden costs that contribute more than an additional 10 percent to your home-buying bill. The terms and conditions laid out in your CC&R may also spell additional expenses for you. Many HOAs' CC&R stipulate regulations on-street parking, consistency of exterior appearance, and bans on rental of your home. This can not only limit your ability to gain an income from your home, but might mean separate parking fees and a higher exterior maintenance budget to adhere to HOA regulations.

So is an HOA worth it? Most current residents say yes, but advise new homeowners to be prepared for all that comes with it. Whether it is worth it for you will depend on what you value most in your homeownership dream.