 |
| Old Thames Bridge - Removed and Replaced |
BLMH is now in what I would call "middle age." That's the third of four distinct time periods I've identified for a HOA. Each of these have specific infrastructure conditions, require differing amounts of money to maintain the property and may have differing reserve requirements. As the HOA ages so too does the population. Here are the periods I've identified in a HOA:
- Post Construction (possible higher initial fees)
- Sweet Spot (lower fees, if reserves are ignored)
- Middle Age (higher fees)
- Old Age (unknown fees)
Our HOA is approaching 40 years of age. Some past decisions have caught up with us. Current owners pay substantially higher fees than did those of 15 years ago, before the roofing project was begun and at a time reserve contributions were significantly lower than they are today. After dealing with post construction problems boards and owners decided to take advantage of the sweet spot, a time when infrastructure was new and identified construction difficulties had passed. They decided to pass the hat to the future. But all good things must end, those low fees were unsustainable and our reserve requirements are now much, much higher. I'm sure some would love to return to the "good old days." They can; simply move to another HOA which is in the "sweet spot."
At this time our HOA is faced with some difficult short term and longer term decisions, some typical of "Middle Age" and some of our own making. Not only is the infrastructure aging, we apparently also have an aging residency. Some of the residents are inclined to make demands of how and when money is to be spent to make their retirement comfortable, and extend their ability to live in their HOA.
Human aging is an uneven process. As we approach "old age" we may enjoy relatively good health. However, as the aging process proceeds there will be ups and downs. We may experience periods in which we find ourselves on plateaus where well being seems more or less constant for a year or a few. These plateaus can be deceptive and fleeting, like a mirage. The aging process is an accelerating one and if we live long enough we will find ourselves in physical jeopardy. The role of cognitive decline should not be ignored and it should be dealt with. There are real "well being" issue here.
Being both supportive and realistic will be difficult and uncomfortable for relatives of the aged. How long can we live? In the U.S. the average life expectancy for a male is 83. Many will exceed this age; many will not. A recent article at Morningstar provided these statistics: "a married couple, if they are 65 at the moment, has a 90% chance of one of them making it to 80, a 70% chance of making it to 85, and a 50% chance of making it to 90." In other words, at the age of 65, half of the married couples will be dead by the age of 90. Some will be dead by 80. Assuming otherwise is not prudent and could be irresponsible.
This post will look into the process of aging for the HOA and the population. It will ask questions about the consequences for a HOA when an aging population decides their condo will be their senior center.
Looking 20-30-40 years into the future
The fundamental infrastructure issues attributable to the aging of the HOA will be addressed by future boards, or should I say these issues can be addressed. There is no guarantee of what future planning will occur and how these issues will be addressed. Boards are elected by owners, from within the body of owners. Boards can be both the worst and the best of the owners.
For dealing with long term issues, a preferred method may be "to wait until decisions are unavoidable." It's useful to remember that as we live our personal lives, so too for the owners and boards of HOAs. Difficult decisions may be avoided.
Long term issues for a HOA are indistinct. What will the costs be to replace or bring infrastructure up to requirements in 30-40 years? We haven't identified all of the future issues. Nor have boards come to a conclusion of how to deal with some of these really long term financial issues. It is a fact that boards have difficulty dealing with today's financial issues.
It's not about age
Discussing these things with owners is sometimes similar to discussing retirement planning with a 20- or 30- something. Discuss the financial requirements of retirement and the "youngsters" may agree that they should be saving 10-15% of their income each and every year. Then ask them if they are doing so or will deposit 10% of their next paycheck into their retirement accounts. Most, if honest, will say "no." So we agree that retirement saving is a good idea, has merit and should be done. However, there are other needs for that money today, be it discretionary spending or necessary spending. So too for owners in a HOA. Not many want to build reserves for a project 10, 20 or 30 years hence. Some have no interest but for the next year.
 |
| New Thames Bridge and Walks |
As the population ages
As our population ages some may make demands and expect improvements to address some of their personal issues. Making our HOA suitable for the demands made by a few aging residents will be challenging and potentially very expensive, should HOA boards decide to provide these things using owner fees.
This process has begun, and the demands are escalating. A recent improvement was improved garage interior lighting. Another was adding 84 knox boxes, and yet another is replacement of steps on the walks of this HOA when the opportunity is presented; the new bridge at Thames is an example. These things do have a benefit for all residents and can be justified on that basis, and certainly some upgrades are warranted while performing normal maintenance. However, not all of the ideas floated in recent years have merit or are affordable by this HOA. By affordable, I mean "possible within the current fee structure." Not all of these ideas have a benefit for all owners. Yet, demands and ideas are coming with increasing rapidity.
Those reserves may be burning a hole in the pockets of a few, who are more interested in immediate benefits and maintaining their personal lifestyle. I have repeatedly stated that every dollar collected for reserves has already been spent; it has been allocated to completing the roofing project, completing the driveway project, replacing streets, repairing streams, dealing with failures in entrances, replacing garage floors categorized as in "poor" condition and so on (most are 39 years old). I'd like to remind owners that while 8 owners got a new roof in 2005, we have more than 70 owners, or nearly 21 percent, who ten years after this project began have an old roof [actually 13 years, I rechecked the first roofing date]. Some of these older roofs have experienced leaks and serious ice dam problems since 2013.
To those living in buildings with a new roof, I suggest "please consider how fortunate you are!" The building in which I reside has a roof which is 22 years old and is not yet scheduled for replacement. That roof was designed and intended to survive for 18-20 years. Do you get my point?
Burning a hole in one's pocket
When we see a large HOA bank balance, some of us may think it is excessive. Some may think "I could do a lot for myself with that money." Others may have the opinion that we'll collect more money in the future, and we will. But future problems and projects will absorb those future funds; there is a specific reason for every one of those dollars in the reserve accounts.
It does take decades to accumulate the savings for large projects. The first of the "new" roofs will be 20 years old in 10 years; it won't be long and it will be necessary to replace that roof. If it takes 20 years to save for a new roof, then our HOA should, at 10 years, have a significant portion for the next roofing project in savings. That project could begin in 2025. How much should we currently have in savings for that next project? Perhaps $350,000. In other words, that amount should be deducted from the reserve balance if one wants to think about "excess funds." But owners don't and won't do that.
I also know that no matter how much or how little money this HOA has, it will be spent. If we have the perspective that we have an excess of funds, owners and boards will find a way to spend those funds in ways not intended when they were collected. Owners may be inclined to spend the funds to deal with personal issues; such as their fireplaces. The recently completed knox box project is a HOA example. It was an optional project; not required by code, not within the reserve study and not included in the Operations & Maintenance budget.
This makes really long term reserve saving a real problem. Attempting to save for any large project 30 or 40 years distant is an invitation for a future board and owners to spend that money for another purpose 10 years hence. In other words, I think there is a realistic limit to the distance in the future that an HOA can accrue funds. Beyond 20 years is well beyond the appreciation of some owners and some boards. How many actually plan that way in their personal lives? How many have any empathy for the owners who might live in their HOA 20, 30, 40 years distant? How many plan on selling in 5 or 10 years? Let's be honest, shall we. Is anyone really concerned about the finances of this HOA in 25 years? Think of it this way. How old will you be in 25 years and where do you think you will be living? Does this influence your decisions about your HOA?
I know I am being cynical, but it is a reality that some are planning on pushing costs into a future in which they are no longer living at BLMH. It was done in the past, and I conclude it is a reality today. It is the desire of some to spend the reserves today and to allow others to pay the fees required for future repairs and replacements. That's how our roofing project was underfunded. However, comprehending human nature and being willing to state what it is that motivates people is not the same as living that way. I may be cynical, but I don't live my life that way; in other words, I don't live my life from a place where I am convinced that people are insincere, are wholly motivated by self interest and a lack of integrity. However, I also am aware that greed is rampant in our very materialistic society in which some individuals are of the belief that they are entitled to a comfortable life and should never be held accountable for their actions.
Avoiding pitfalls and setting traps, or "land mines"
Perhaps owners would like a repeat of the current roofing project, wherein we began really saving after the project began? Meanwhile we continue to replace other roofs; the project will require another 2 or 3 years. We are also in the midst of an expensive and premature street replacement. As I have stated, most of my time on this board has been spent cleaning up the messes created by others and that includes earlier boards. I've also done my darndest to avoid leaving "land mines" to trip future owners and future boards. What's a "land mine" at a HOA? Its a problem which will raise its ugly head some day in the not too distant future and will trip the board. It will require funds, sometimes significant amounts of money. Future collections will deal with the "other" or future problems, including new roofs beginning after 2025, and so on. I assure the reader there is no excess savings. I also assure the reader that some of our owners have designs for that reserve fund savings.
This sentiment was expressed by a resident a few years ago. On the surface, it seems like a wonderful idea; live in a park like atmosphere during the summer months and hunker down for the winter. Peapod.com can make deliveries when it is inconvenient to go grocery shopping. There are about 200 restaurants nearby in Wheaton and Glen Ellyn. There is a nearby free indoor walking track. There are numerous nearby hospitals, outpatient care facilities and so on. It's retirement living on the cheap. If winters truly become unbearable one can always "snow bird."
Well-Being and Quality of Life Issues; Being Well
There are quality of life issues to address for all of us. I am of the opinion that the residents of BLMH live here in recognition of "quality of life" desires. We all want to live in a safe community. We want good, nearby shopping including groceries. We want to live within a larger community that is responsible. We want and enjoy the park across the street, and the ambiance and landscaping of this property. However, for retirees these issues may become more acute.
In this materialistic society, some promote quality of life as the things we have; our automobile, vacations, restauranting, cable TV channels, toys, smartphones, clubbing and so on. I prefer to view "quality of life" from the perspective of "well-being." I furthermore prefer a holistic view. It is the challenge of maintaining our well-being that might be a motivation for the elderly. After all, at some time in life we may realize that having more will never make us happier. At some time in life we may no longer be able to do those things that we thought were intrinsic to our identity. With these realizations what then becomes most important to us?
Satisfaction is an important part of well-being, or of being well. This transcends our physical health and even our materialistic wealth. It is, of course, our independent right to declare what constitutes personal well being. For most of us, this might include happiness, health and success. As we age, "health" becomes a relative term. My doctor says "when you stop, you drop." That is an incentive to keep working beyond the age of 70. How many think that working at 70 is a part of the retirement lifestyle and is a wonderful part of one's well-being? Remember, retiring at 50 was promoted not too long ago and there remain "retire early" websites to this day. Someone is reading and believing that stuff. Beliefs do inspire action for some of us. It inspires day dreams. However, most of us don't or work until 70. Once we do retire the medical system is more than willing to spend every last of our dollars keeping us alive, be that as a vegetable or whatever.
While some residents may not want to live in a HOA for the rest of their natural lives, some may have no financial alternative and some have stated that they "would like to live here as long as possible." At the conclusion of this post I have included an excerpt from the Social Security Administration actuarial tables to provide some idea of what that might mean. Basically, at the age of 70 it is probable I will live to 84. Should I live that long, at the age of 84 it is probable I will live to 90, and so on. It is probable that anyone who attains the age of 80 will live to be 90 and beyond. Living in a manor style condominium building beyond 85 will be challenging. These buildings were not designed for retirement living. Living here in really old age will have consequences and will require serious planning. It may not be possible without a lot of family and other support. Should I decide to live here in really old age, who will be responsible for my well being? Who will be responsible for a lack of planning and preparation on my part? Will my children be willing to do what is necessary to support my retirement lifestyle? If not, then who will?
A Final Gift to the HOA
These sentiments, "live here as long as possible" and "live here until I die" will require some planning by the owner who has this desire to avoid leaving a final "gift" for the neighbors. For example, what will really happen if I live at BLMH until the day I die? If I want to live here "as long as possible" what exactly does that mean? At what point will I decide it is no longer possible for me to live here? Do resident owners with such a perspective have a plan on what the signposts might be that indicate this is no longer possible? Do they have a plan of specifically what to do when those sign posts appear? Do they have a transition plan for dealing with really old age?
One step required to accommodate my personal needs so I may stay here "as long as possible" may be to press the HOA to take measures to assure that I can. Fore example, I have vision problems and I did have cataract surgery nearly a decade ago. I have some physical restrictions. In other words, I am well aware of the physical issues of aging. However, I have chosen to find way to get beyond my limitations, to stay very active and to be useful to society. So useful that I am paid well to provide my business related services. My personal implementation of an "active lifestyle" goes far beyond time at the local YMCA or health club. Yes, I do have some serious issues to deal with. I assume these issues are typical for any male my age.
For statistical and public administrative purposes old age is frequently defined as 60 or 65 years of age or older. I'm in the "older" category. So I do have personal insights into the physical issues and challenges facing those in "old age." I have been involved with relatives who are of really old age, 85 years of age and older. Anyone who thinks I am oblivious to the problems of aging is stupid. Certainly, by the age of 85 we should have implemented a "final stage of life" plan. That plan may include the HOA, which is not really prepared to support my plan.
Obviously, final stage of life planning goes beyond the requirements of a HOA. But it is a necessity for the residents. Nevertheless, some have no plan. Others may have unrealistic expectations. "I'll live forever."
If I have no plan, or one which is inadequate, what then? The outcome of a decision on my part to live in my HOA until the day I die may have some unpleasant financial consequences for that HOA. How can that be? Up until 2008 it was possible to mortgage my unit to the hilt. Second mortgages were common. Prior to 2008 "Using my home as a piggy bank" and "mortgaging my home to the hilt" were much promoted financial wealth schemes. Many drank the Kool-Aid. At the peak of the real estate boom some BLMH units were sold for about $180,000 and it would have been easy to obtain a second mortgage or refinance $150,000. Those loans are slowly being paid off, but if one did this at the age of 65-75 it will be impossible to recover the total amounts owed for these loans in one's lifespan.
With the real estate crash a lot of real estate which was financed up to the top of the market remains "underwater" to this day. There is a lot of real estate out there with a second mortgage, or a significant mortgage. That mortgage may equal to the full value of the property.
While it is impossible to know who at BLMH actually has a mortgage at 65 or older, here is a statistic from a recent report by Harvard University’s Joint Center for Housing Studies. As of 2010, “40 percent of households 65 and up were still paying a mortgage.” This is a significant increase from a decade earlier. The report stated that in 1992 only about 18 percent over 65 had to make mortgage payments.
Taking a personal perspective, if I had remortgaged in 2007, it is likely I could today owe up to $140,000 on my unit. In fact, in 2007 it was easy to get a no fee equity loan of $100,000 on our units; simply sign on the dotted line. I am writing from personal experience. What happens if I die with a $100,000 to $140,000 mortgage on my unit? Do I have insurance to pay it off? Have I made plans?
On my death, unless other plans have been made this HOA will no longer receive monthly fees from me. Simultaneously the bank will no longer receive a monthly mortgage payment. Ditto for utilities, and any other debts including credit cards.
After several months the HOA will begin proceedings to collect those back fees. But unless I have made specific financial plans there will be no one to collect from. This will move through the court system and as it does, the fees of other owners will be used to pay the legal costs. Eventually the bank which holds the mortgage will begin foreclosure proceedings. The legal costs to the HOA will accrue, the fees owed will accrue and within two years these may reach $10,000 or more.
Eventually the bank will successfully foreclose, the unit will be sold and a portion of what I "owe" may be paid to the HOA. However, if I owed more to the bank than the unit sold for, then the HOA may collect nothing. Or, the amount collected by the HOA may be insufficient to cover all of the legal fees and HOA fees that I owed.
If (when) that occurs the HOA will record this as a "bad debt" and a loss of income. That loss will be distributed to the other owners and will be paid from their fees. Why? Because the entire budget of this HOA is based upon 336 fee paying owners. When one doesn't do this, the bills are then paid by the remaining 335. If two don't, then the bills are paid by the remaining 334 and so on. Of course, most of this will be invisible to the owners because as this is a legal issue it will be discussed behind the closed doors of executive session in HOA meetings. Whatever is discussed during open session will only be observed by the handful of owners who attend HOA meetings. There probably won't be an article in the Newsletter. If it were not for the fact that this HOA now records "bad debt" on its financial statements most owners would be completely unawares. Prior to the time I came to the board this HOA never tracked bad debt. It did, from time to time publish information on delinquent amounts. But not regularly; nor was this always openly discussed by the boards with owners present, as it now is. In other words, owners are now more aware of the problems.
If I choose to live at BLMH until the day I die, my parting gift to my neighbors may be a bill via the HOA which will raise their fees slightly. $10,000 distributed among 335 is $29.85 to each of my neighbors. That's the equivalent of about a 1% fee increase. For a HOA which splits hairs to avoid fee increases, or attempts to keep annual fee increases at 3%, such a situation will be significant. Multiply that by the number of the aged and it could be scary. After all, a couple of years ago one of our owners stated publicly that "this is primarily a retirement community." If this were true, it could get interesting over the next couple of decades.
If I have an intention to live here until I die, and unless I am willing to make specific plans to take care of my financial obligation at this HOA in the event of my death, then what I have described will happen. Multiply this by others of like mind. How is a HOA board to even plan for such a possibility? Yet, this very thing is happening at HOAs. Our HOA is not exempt from this.
Of course, anyone may die at any time. Life is short. Some of us die young, some of us encounter financial misfortune. When this occurs there may be a foreclosure. In 2008 there were more than 3 million foreclosure filings in the US. Some occurred in Wheaton and some in our HOA. Some have occurred each and every year since. Which is why we now incur a "bad debt" loss each year.
So what should we do? The only thing an individual can do is plan for the eventuality of their death. Of course, some may simply be irresponsible and their primary concern may be "taking care of number one." In other words, there may be sociopaths among us. Some certainly take pleasure from screwing their neighbors. For those HOA owners who have integrity, such planning may require sufficient assets or life insurance to cover all outstanding debt obligations, including any mortgage. Of course a legal will will also be required and the means to see that the will is followed properly.
Looking Ahead
About 75% of this HOA property is at an age of 39 years. This means that in 30 years most of the infrastructure will be 69 years of age. That's old age for a HOA. Any resident who is 70 today will be 100 in 30 years. The likelihood of living to the age of one hundred is very, very small. So most of our current elderly will no longer be with us.
Some aspects of our 39 year old HOA are being maintained as we go. Others are not. At present this HOA is playing "catch up" and the logistics of doing so has been extraordinarily difficult. Early failure of streets combined with a maintenance backlog will create additional difficulties for at least five years ahead. Over the span of the next 30 to 40 years most of the walks, most of the streams, entrance walks, mail boxes, lighting, water and sewer systems, garage floors, street lighting, etc. will require replacement. Trees will continue to die out. There will be another roofing project and another street project. Masonry projects and entrance foyer upgrades will also be necessary. We have about 100 remaining brick window sills that will require replacement sooner than later.
Boards and owners will need to consider what's realistic. I have said that "BLMH should never have been built in its current form." What do I mean by that? We have a HOA of 336 which is directed by 6 or 7 volunteers. Most of our owners pay their fees, keep the rules and prefer to be uninvolved. The heavy lifting is to be done by the few that will volunteer and they do become targets of unhappy owners from time to time; more frequently than not. If even 10 percent of our owners become angry, they will outnumber the board by nearly 6 to 1. It is very easy for unhappy owners to overwhelm the board, and they have done so. The State of Illinois is living on life support and will continue to strangle municipalities because all finances are now being used to support current state budgets and the debt; State money directed to the municipalities will soon vanish. That's millions of dollars for the City of Wheaton each year that must come from somewhere else.
The City of Wheaton and the Village of Glen Ellyn via the "Community" College of DuPage use two large ponds to collect the runoff of stormwater. Wheaton actually pipes it from further north, and the college has recently expanded parking to replace water retention areas and buffers to adjacent communities. It has built an extensive network of storm sewers to carry rainwater from new parking lots which replaced retention areas to the Hoddinott pond and then into Wheaton's pond 4. Wheaton's pond 3 and pond 4 are wholly or partially on the HOA property. There has been silence by Glen Ellyn on this issue, reticence on the part of the City of Wheaton and absolute denial on the part of the college when the issue of maintaining these ponds and dealing with storm water is the subject.
The college actually has a legal restraint in the amount of water it can push to Wheaton's lake 4. However, no one can tell the college what to do; they are above and beyond all of us, and will do whatever they wish and have! In other words, there seems to be an expectation by Wheaton, Glen Ellyn and the "community" College of DuPage that a condominium association of 336 units will take on the rainwater burden. That should never happen because of the easement of the city on these ponds.
However, I have suggested from time to time that we apply for a casino license if we are expected to maintain or be involved in the maintenance of Wheaton's storm water retention system. Some board members now agree.
Furthermore, the city only provides fire and police protection for the HOA, and water and sewer ifrastructure ends at the boundary of the property. The HOA is responsible for all else. Yet, owners pay significant property taxes. This arrangement was a sweet deal for the city, which reaps a far higher tax collection per acre of dry land at BLMH because of the density of the units. Private Urban Developments such as BLMH should never have been built. But greedy politicians saw an opportunity.
Obviously, this arrangement will be reviewed in the future. The city, which is being financially choked by the State of Illinois (which is broke) will face further pressure to reduce costs and increase taxes. This will be the excuse to avoid making the hard choices. Some council members are more focused on the downtown area. I say, look to Glen Ellyn to see how well such a plan has worked. If we want restaurants and tchochke shops, then that will be the future, I guess. Or perhaps Wheaton will go for a "cultural center" as promoted by at least one council member. We saw how that turned out over at the "community" College of DuPage.
Boards of the next 30 years will be called upon to shift to focusing on these serious financial, resident and infrastructure decisions. Or, they can simply delay and attempt to avoid the inevitable. If boards take the easy routes or make poor decisions, it is inevitable that significant fee increases may be required to deal with the demands of the aging residents and the issues of aging infrastructure. The necessary planning will not be simply about being a reaction to owner demands and raising fees to deal with problems. It will be about planning, preparation and setting realistic boundaries. Our knox box project was expensive. It was a board decision to provide this benefit to residents. However, at the time our fees did not include this, but the board had the authority and the HOA did have the financial ability to do the project. However, this did strain the annual operations & maintenance budget, and because this HOA has been inclined to push some of the O&M costs into the following year, this has created a situation in which annual O&M budgets are exceeded.
Aging Residents
What should a HOA do to accommodate these residents? As we age we lose cognitive ability and physical abilities. This may include vision impairment and physical impairment. So how long can the elderly live in a HOA? That is in part dependent upon the nature of the impairments. Some have stated they would like to live here "as long as possible." Yet, they have not defined what that means. From personal experience, I think some have no definitive plans to leave or a means to stay. What do I mean by this? A plan usually includes specific action points. Consider them to be "trigger events." If a plan does not include these, then there is no plan. What does exist is desire. I "want" a certain outcome. Most of us would prefer to die peacefully in our sleep. That's a desire. In fact, the aging process is a zig-zag course. It includes upsetting events and discomfort. For the elderly to make it through this process with some quality of life requires planning and some courage. It also requires family support. "Out of sight is out of mind" goes the expression. It can be convenient to put the elderly into condominiums for the occasional visit. I call this "retirement on the cheap" and believe me it really is.
Owners in HOAs should be aware that some residents would prefer to live in their condominium "as long as possible." As we age, that possibility may require unusual aids or demands. Perfect walks, ice free living, no stairs or steps of any kind, higher lighting levels, etc. The problem becomes acute when these residents expect the HOA to accommodate their special demands. Here at BLMH I have heard and read statements about aging and some have declared BLMH to be "primarily a retirement community."
This is false. However, there will be pressure applied on boards to accommodate the demands or perceived needs of the elderly. These demands will be by the elderly or by family members. Let's be honest and forthright. What would each of us do to avoid moving from somewhere we prefer to live? What would we do to avoid the very expensive alternative of senior care? What will we do to maintain our quality of life and who should pay for this? What happens when we cannot afford to take the steps for our own care?
In fact, BLMH is not chartered as a retirement community. Our entire property was not built with the needs of the elderly in mind or as a specific purpose. We have stairs, steps into and out of the buildings and garages, there are limited walks, we don't have handrails throughout the property, there are no elevators, special lighting, etc. Driveways and walks are not contiguous smooth surfaces and it is necessary to step down from patios onto the extensive lawns. The lawns are not level. There are not handrails throughout the property. We have no community or senior center. Our decorative patios and walks bordering water have a simple rope barrier. One might ask that if dealing with uneven walking surfaces is an issue for residents, or barriers, then would it be prudent to require substantial handrail barriers on all first floor patios to prevent one from falling off of their patio and onto the common elements? If that is so, then who should pay for this? After all, such protective barriers were never necessary for the first 39 years of this HOA. Nor may such special amenities by required by all residents.
Other owners need to consider the financial impact of any demands for modifications for the elderly or any other special group. Some will demand perfect walks, driveways, railings, etc. They'll demand ice free entries and impeccable driveways and garages. To be blunt, it is impossible for a HOA such as ours to "special group proof" the property. Of course, if each owner paid fees of about $1,000 a month, we could do a lot to meet these demands. But owners don't pay such fees and they won't. Even dealing with a $2,500 fireplace removal has supposedly created financial stress for some of our residents. So how is this HOA to accommodate these demands?
The bad news is this. Under current fee structures HOAs don't have budgets to accommodate conversion to elder care facilities. Owners can, of course, convert their units to something that accommodates those who are vision impaired, need walkers and other mobility assistance. Ramps can be installed in the units. Handrails can be put on patios. It may be possible to put powered stair lifts in, if fire codes permit. Wider entryways and special bath fixtures can be installed. Perhaps these things should be. But boards can't force people to do these things. Yet, owners can "demand" that boards do some of this for them. To what extent are HOAs financially bound to assist special requirements? Some boards may be inclined to attempt to do so and some owners are inclined to do what they can to force HOAs to accommodate their requirements. Most understand and make modest modifications at their personal expense and with HOA approval.
I'm of the opinion that it is not possible to convert manor style buildings and garages to elder care facilities at reasonable expense and within current fees, nor is the HOA required to do so. When owners choose to make modifications they must adhere to HOA rules and fire codes must be adhered to which means corridors, stairways and halls cannot be blocked. There are other restrictions. Those stairways, entryways and garages are shared facilities, not part of one's private home.
Nevertheless, some owners, residents and relatives will persist in their pressuring of boards. To some extent they may be successful. All that is required is a willing and compliant board. We've had those before. Some kept fees unnaturally low. Others operated capriciously. Our board is aging and may have shared concerns. We have a large reserve balance.
It is unclear if living in manor style homes is really a safe environment for the elderly. When someone is injured in a slip or fall, the attorneys and family members will queue up and extract as much as possible from the HOA. Can't happen? Several years ago an individual allegedly slipped on a driveway. The settlement was $50,000. The legal costs and insurance premiums as a consequence of these problems will be one more expense for the HOA. These things will, of course, be embedded in HOA fees. And yet, some owners have the unmitigated gall to ask "Why are my fees so high?" Why indeed!
Health, Hunger, Hygiene
These can become issues for the elderly. As household budgets are tightened and strained, some things might not be affordable.
The burden will fall on the family and extended family to provide those things that are required for our elderly residents. That will not be convenient. So why not pass some of the responsibility on to the HOA?
Of course, the costs of a unit at BLMH are a fraction of the cost in an elder care facility. Fees in elder care facilities begin at about $4,000 monthly and $6,000 monthly is not unusual. HOAs may appear to be an attractive financial alternative. There are issues and problems with this approach, HOAs don't have medical staff, or any full time staffing for that matter, They don't have cafeterias, or meals to your door, either. Ours has no central meeting area, or library, or elevators. It doesn't have a "senior center." It does have narrow halls and requires stepping up into all entrances, patios and even the garage. Access to the second level units is via stairs. Of course the residents and the families of the elderly know that, but some prefer to ignore it. Our HOA has one real attraction. Our HOA and others may be a really cheap way to put the elderly away, and that will be attractive to those who are faced with the quandary "what to do with grandma or granddad?"
Boards will increasingly be put under pressure from family members to provide for their elderly residents who live in the HOA. Buzz words such as "safety" and "well-being" are tossed around when mom, dad, grandma or grand dad are thought to be at risk. But who is really responsible to see that the three "H's" are available to the elderly family member?
Some will say this is not an in issue. It will be if one simply reads the articles about financial preparedness of the boomers and the elderly for retirement. There is a lack of savings and retirement investments, a lack of long term care insurance, and so on. In my opinion the situation is inevitable. The outcome is not, but unless owner involvement changes the outcome will be determined by boards increasingly comprised of the elderly. Making the difficult decisions may become more so. So who is going to make these decisions?
What to Do?
There are many advantages and disadvantages to HOA living. Because a HOA is a larger community which operates under state statute and has a board and reserves and other financial plans, it becomes a necessity to have long term plans. This is both a personal advantage and disadvantage. Living in a HOA makes planning a necessity. It also provides residents a forum in which they may express their personal issues in some interesting ways. Some of use may simply drift from day to day. Some of us may be rigorous in our planning. Each of us has concerns. We may wonder about the financial well being of our neighbors. Living in a HOA provides some insight which is generally not available in the typical neighborhood. Each HOA does know the financial standing of each owner. That may be indicative of the financial well being of the members, or not. Nevertheless it is useful information. Our HOA has statistics on delinquencies and does discuss the generalities during HOA meetings.
In a HOA members can contact management with their concerns and some do. In recent years some HOA members have expressed concerns about their finances, about the issues of aging and so on. That's something most of us never know about our neighbors when we live in private homes.
There are articles in the popular press about the aging of America, the boomers and seniors. Some of the candidates for the Wheaton City Council have expressed an interest in the seniors in the area. Our HOA, which is a "city within the city" has the same demographics as most of Wheaton. In some respects, I think the HOA board and management has a "finger on the pulse" of the community.
It will be interesting to see how the next 5 years treat BLMH. It will be interesting to see how this community deals with the many issues it faces.
From Social Security Administration 2010 actuarial tables:
| Exact Age | Probability of dying in one year | Male Life Expectancy | Male Anticipated Death At Age | Female Life Expectancy | Female Anticipated Death At Age |
| 50 | 0.00516 | 29.45 | 79.45 | 33.07 | 83.07 |
| 51 | 0.0056 | 28.6 | 79.6 | 32.18 | 83.18 |
| 52 | 0.00608 | 27.76 | 79.76 | 31.29 | 83.29 |
| 53 | 0.00661 | 26.93 | 79.93 | 30.4 | 83.4 |
| 54 | 0.00717 | 26.1 | 80.1 | 29.52 | 83.52 |
| 55 | 0.00781 | 25.29 | 80.29 | 28.65 | 83.65 |
| 56 | 0.00846 | 24.48 | 80.48 | 27.77 | 83.77 |
| 57 | 0.0091 | 23.69 | 80.69 | 26.91 | 83.91 |
| 58 | 0.00968 | 22.9 | 80.9 | 26.04 | 84.04 |
| 59 | 0.01025 | 22.12 | 81.12 | 25.19 | 84.19 |
| 60 | 0.01087 | 21.34 | 81.34 | 24.34 | 84.34 |
| 61 | 0.01159 | 20.57 | 81.57 | 23.49 | 84.49 |
| 62 | 0.01244 | 19.81 | 81.81 | 22.65 | 84.65 |
| 63 | 0.01345 | 19.05 | 82.05 | 21.83 | 84.83 |
| 64 | 0.01461 | 18.3 | 82.3 | 21.01 | 85.01 |
| 65 | 0.01593 | 17.57 | 82.57 | 20.2 | 85.2 |
| 66 | 0.01737 | 16.84 | 82.84 | 19.4 | 85.4 |
| 67 | 0.0189 | 16.13 | 83.13 | 18.62 | 85.62 |
| 68 | 0.02048 | 15.43 | 83.43 | 17.84 | 85.84 |
| 69 | 0.02219 | 14.75 | 83.75 | 17.08 | 86.08 |
| 70 | 0.02414 | 14.07 | 84.07 | 16.33 | 86.33 |
| 71 | 0.02636 | 13.4 | 84.4 | 15.59 | 86.59 |
| 72 | 0.02881 | 12.75 | 84.75 | 14.87 | 86.87 |
| 73 | 0.03148 | 12.12 | 85.12 | 14.16 | 87.16 |
| 74 | 0.03444 | 11.49 | 85.49 | 13.46 | 87.46 |
| 75 | 0.03786 | 10.89 | 85.89 | 12.77 | 87.77 |
| 76 | 0.04173 | 10.3 | 86.3 | 12.11 | 88.11 |
| 77 | 0.04593 | 9.72 | 86.72 | 11.46 | 88.46 |
| 78 | 0.05047 | 9.17 | 87.17 | 10.83 | 88.83 |
| 79 | 0.05547 | 8.63 | 87.63 | 10.21 | 89.21 |
| 80 | 0.06118 | 8.1 | 88.1 | 9.61 | 89.61 |
| 81 | 0.0677 | 7.6 | 88.6 | 9.03 | 90.03 |
| 82 | 0.07492 | 7.11 | 89.11 | 8.47 | 90.47 |
| 83 | 0.08289 | 6.65 | 89.65 | 7.93 | 90.93 |
| 84 | 0.09173 | 6.21 | 90.21 | 7.41 | 91.41 |
| 85 | 0.10158 | 5.78 | 90.78 | 6.91 | 91.91 |
| 86 | 0.11257 | 5.38 | 91.38 | 6.44 | 92.44 |
| 87 | 0.1248 | 5 | 92 | 5.99 | 92.99 |
| 88 | 0.13831 | 4.64 | 92.64 | 5.56 | 93.56 |
| 89 | 0.15311 | 4.3 | 93.3 | 5.17 | 94.17 |
| 90 | 0.1692 | 3.99 | 93.99 | 4.8 | 94.8 |
| 91 | 0.18654 | 3.7 | 94.7 | 4.45 | 95.45 |
| 92 | 0.20512 | 3.44 | 95.44 | 4.13 | 96.13 |
| 93 | 0.22487 | 3.2 | 96.2 | 3.84 | 96.84 |
| 94 | 0.24574 | 2.98 | 96.98 | 3.58 | 97.58 |
| 95 | 0.26645 | 2.79 | 98 | 3 | 98 |
| 96 | 0.28663 | 2.62 | 99 | 3 | 99 |
| 97 | 0.30587 | 2.47 | 99 | 3 | 100 |
| 98 | 0.32378 | 2.34 | 100 | 3 | 101 |
| 99 | 0.33997 | 2.22 | 101 | 3 | 102 |
| 100 | 0.35697 | 2.1 | 102.1 | 2.45 | 102.45 |
| 101 | 0.37482 | 1.99 | 102.99 | 2.31 | 103.31 |
| 102 | 0.39356 | 1.88 | 103.88 | 2.17 | 104.17 |
| 103 | 0.41324 | 1.78 | 104.78 | 2.03 | 105.03 |
| 104 | 0.4339 | 1.68 | 105.68 | 1.91 | 105.91 |
| 105 | 0.4556 | 1.59 | 106.59 | 1.79 | 106.79 |
| 106 | 0.47838 | 1.5 | 107.5 | 1.67 | 107.67 |
| 107 | 0.50229 | 1.41 | 108.41 | 1.56 | 108.56 |
| 108 | 0.52741 | 1.32 | 109.32 | 1.45 | 109.45 |
| 109 | 0.55378 | 1.24 | 110.24 | 1.35 | 110.35 |
| 110 | 0.58147 | 1.17 | 111.17 | 1.26 | 111.26 |
| 111 | 0.61054 | 1.09 | 112.09 | 1.17 | 112.17 |
| 112 | 0.64107 | 1.02 | 113.02 | 1.08 | 113.08 |
| 113 | 0.67312 | 0.95 | 113.95 | 1 | 114 |
| 114 | 0.70678 | 0.89 | 114.89 | 0.92 | 114.92 |
| 115 | 0.74212 | 0.83 | 115.83 | 0.84 | 115.84 |
| 116 | 0.77922 | 0.77 | 116.77 | 0.77 | 116.77 |
| 117 | 0.81818 | 0.71 | 117.71 | 0.71 | 117.71 |
| 118 | 0.85909 | 0.66 | 118.66 | 0.66 | 118.66 |
| 119 | 0.90205 | 0.6 | 119.6 | 0.6 | 119.6 |
| BRIARCLIFFELAKES.BLOGSPOT.COM | |||||
No comments:
Post a Comment
Please leave a comment!
Note: Only a member of this blog may post a comment.