Inflation is currently at its highest level in 40 years. And it does not appear to be going down anytime soon. Last year, the inflation rate hit 7% and by February of this year it increased to 7.9%. Consumers have seen prices of everything from gas to groceries increase.
As you can see from the chart below, we have been very fortunate with inflation rates hovering around 2% for the last 10 years, as represented by the green line. While in the last 30 years, we have rarely exceeded 4%, as represented by the red line. Now, we are faced with 8%, which again, we have not seen in over 40 years.
Inflation has already affected many community associations with many raising their dues between 3-5% for the 2022 budget year. But that increase was not enough especially with the continued impact of insurance, labor, and material increases. Most community associations need to be prepared to raise dues 10-15% in 2023 to combat inflation.
Homeowners are usually not happy when dues go up. However, as expenses for communities increase, so does the need for an increase in the dues. Now is the time to prepare your residents for an increase in dues in 2023 so they are not blindsided.
Here are some of the items in most community associations that are increasing in cost:
For most community associations, the budget for 2023 will reflect higher anticipated expenses, which means dues will need to increase. Now is the time to prepare your residents for this increase. This year is unlike any other year. You CAN NOT rely on “standard” budget raises and expect to be able to pay your bills in 2023. You should NOT wait until the end of the year, hoping this will change. You need to start planning NOW and letting your owners know NOW.
Throughout the remainder of 2022, we will have a blog post each month discussing this inflation storm and offer tips for your association to ride it out.