Report: Aspen housing HOAs need rainy-day fund
The Aspen Times
Aspen, CO Colorado
ASPEN – A new report suggests that homeowner associations for Aspen-area workforce-housing complexes are grossly underfunded and have little in the way of emergency relief should they face a major repair crisis, such as the need to replace a roof or tackle some other common capital improvement.
The not-yet-finished report, commissioned by the Housing Frontiers Group, examined 19 complexes totaling 393 units that were set up through the Aspen/Pitkin County Housing Authority. Collectively, there is a “shortfall” of $2.87 million for an average of $7,297 per unit, according to the report, conducted by Aspen Reserve Specialties of Castle Rock.
The shortfalls are as high as $756,630 for 87 units at Hunter Creek, and as low as $9,756 for four units at Top of Mill.
Another 11 complexes representing 291 units will be examined in the coming months, but the results aren’t expected to change – all of the HOAs under APCHA are in the same predicament, said Pete Louras, Housing Frontiers Group board member.
No one can force the HOAs to take measures to build up their capital reserves, which usually is a matter of raising unit owners’ monthly fees, Louras said.
However, if the situation is not addressed, the HOAs could become mired in a situation not unlike what is occurring at part of the Centennial complex, where some homeowners face an expensive repair job related to water intrusion that’s been occurring over several years. The Centennial HOA has asked the city and county for financial assistance and advice to help with the problem, but a solution has yet to be found.
Aspen Councilman-elect Adam Frisch, who also is a Housing Frontiers Group member, said the survey was intended to help HOAs become proactive in planning expensive repair and replacement projects so that the burden can be spread among the homeowners over time.
“We want to help prevent the HOAs from coming up short when something major needs to be done to their housing projects,” Frisch said. “While the reports are not final and not all numbers are in, our current estimate is that the capital reserve need is in the order of an average of $7,000 per unit – a figure easily manageable over time by the HOAs.”
The overall $2.87 million shortfall is expected to climb to nearly $5 million once the other 291 units and complexes are evaluated, an HFG news release states.
Louras said a “brainstorming” meeting is set for 8 p.m. on Tuesday, May 24 in the Rio Grande meeting room next door to the Pitkin County Library to discuss potential solutions that could help the HOAs. Officials with the housing authority, Frontiers Group, the city and county are expected to attend. Representatives from each association will be encouraged to attend, he said.
Louras said he wouldn’t want to speculate on any of the possible options, but added that in theory, they could run the gamut of bank loans to HOAs for the purpose of quickly filling capital-reserve funds to some sort of partial government assistance – not the preferred alternative of most city and county officials.
Basically, the HOAs will be given advice and assistance through the Frontiers Group – set up by the city in 2008 to examine various homeowner-association issues – under the strong likelihood that HOAs will have to work with unit owners to tackle the problems themselves.
Louras said the HOAs could have set up adequate capital-reserve systems with their homeowners over the years, “but they didn’t.” He acknowledged that affordable-housing unit owners are probably “stretched in the first place” and don’t have a lot of extra money for capital-reserve contributions.
The report was commissioned “not to throw stones, but to help the HOAs figure out their situations,” he said. Louras added that he personally wouldn’t feel good about leaving the HOAs to “fend for themselves,” one reason why next week’s meeting is being held.
The housing office doesn’t have the authority to mandate that the HOAs address the problem, he said. Louras said he hopes solutions are found collectively and cooperatively, given that all the HOAs are in the same boat.
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