Homeowners associations are sometimes villains in the housing world, especially when they ask people for more money when they’re already paying a lot. In Bountiful, a city in Utah, residents of a particular condominium were told their monthly fees could soon rise to more than $800, local outlet KSL reported. That happens to be more than double what some are currently paying.
The notice from the homeowners association blamed rising costs of labor, supplies, and insurance, among others, the outlet reported. The condo’s property insurance apparently rose from $17,000 to $108,000 after its prior policy was canceled following a fire. “I do think it is pretty ridiculous that we all have to pay for that one incident,” one resident who has lived there for close to five years said. She called it horrible timing, too, because she just had to pay a hefty veterinary bill for her cat.
“I don’t have much of my savings left right now,” she told the local reporter. “It’s very rough.”
“It’s a good thing to have. I want to have it,” another resident, Douglas Horne said, referring to insurance. “But $800 a month? That’s more than two-thirds [of] my mortgage payment.” Horne and his wife have a two-bedroom condo they bought about four years ago, and they want to have more children, but they said that seems difficult now, especially if they need additional space and want to move.
“It’s going to be really difficult for us to move when the listing’s going to say that we have an $800 HOA,” said Emily Horne, Douglas’ wife. “If that doubles, there’s no way we’re ever going to be able to ever move out of here.”
“I feel stuck,” Douglas added.
Homeowners were given an alternative: a 17% increase in monthly fees, plus a single payment of $3,000. One resident said his family had saved up almost that much but it wasn’t meant for costlier HOA fees. “We’re having a baby girl in January, and so that was supposed to go toward her [being] born,” the resident said. “Now it probably won’t.”
The average home value in Bountiful is about $550,000, per Zillow; the city, like a lot of places, saw home prices soar during the pandemic housing boom, fueled by historically low mortgage rates and the ability to work and live from anywhere. But not long after, inflation spiked. Prices rose, from labor to the actual materials needed to build a home. Not to mention, mortgage rates shot up as the Federal Reserve aggressively raised interest rates to tame inflation. And then came insurance woes.
There’s an insurance crisis unraveling throughout the country; it’s mostly talked about in the context of California, Florida, and sometimes Texas, where property insurers are fleeing or capping new policies because of the increased severity and frequency of weather-related events and natural disasters. But this condo situation in Utah highlights the expanding crisis. Homeowners insurance rates rose 20% in Utah last year, according to S&P Global. It’s unclear what caused the fire, but the dropped policy—and need for another, costlier one—shows how difficult it has become to either find property insurance or afford it.
Source link
