Legislative Update
See 2023 WA State bills CAI is currently tracking.
By Bennett Taylor, Esq. of Peryea Silver Taylor I
f you are familiar with Maslow’s Hierarchy of Needs, then you are aware that a persons’ physiological needs are at the base of the pyramid. In other words,
the pyramid base is made up of the most essential human needs, for example shelter or ‘housing.’ In recent years, across most states, the cost to purchase a home of any sort has risen dramatically. As a consequence, for at least the past ten years, this has created an affordable housing issue that has impacted nearly every community in the United States.
According to the Office of Financial Management for Washington1
, over the last 20 years (2001 to 2021), the
median home price in Washington went from $179,900 to $560,400, a staggering 150.3% increase. A substantial number of Washingtonians looking to enter the housing market now face prohibitively high home prices and rents. While there is no easy one-size-fits all solution to address this problem, one possible idea is to make community associations (condominium and homeowner associations) more attractive as a ‘starter home’ option.
Washington’s median home price went from $179,900 to $560,400, a staggering 150.3% increase.
One critical feature of condominium and homeowner associations is that they are non-profit corporations run by volunteer owners. These same volunteer owners commonly want the community to run as smoothly and harmoniously as possible. The uninitiated may say, “I have heard terrible things about condos and HOAs. Dues are too high, the bylaws are confusing,
1
https://ofm.wa.gov/washington-data- research/statewide-data/washington-trends/ economic-trends/median-home-price
busy-body boards micromanage owners and expensive special assessments come out of nowhere.” While on some level these may be legitimate concerns, these general conceptions are the exception and not the rule.
Between the statutes governing community associations and advice of legal counsel and other professional partners, owners are typically provided the tools to operate effectively and efficiently. In other words, community associations are not always the house of horrors portrayed on internet message boards and in the media. If a community association does fit the negative stereotypes mentioned, this is oftentimes the product of short-sighted thinking by those boards and owners. It is this kind of behavior that actually makes housing more unaffordable as explained below.
A common issue that contributes to escalating housing costs is deferred maintenance.
A common issue that contributes to escalating housing costs is deferred maintenance. Deferring maintenance projects for a condominium almost always makes the legally mandated repairs and maintenance more expensive for owners in the long run. Sometimes this delayed maintenance even results in the dreaded ‘special assessment.’ Essentially, in trying to avoid paying a little bit more in the short term to address the issue, owners wind up paying substantially more over time. This reduces affordable housing in that the current owner or a potential buyer must pay that special assessment.
Much More Affordable
An obvious reason that a condominium unit could be a good entry point for a first-time homebuyer is that such units are generally less expensive than a single-family home. For example, in the city of Seattle as of December 2022, the median sale price of a single-family home was $785,000. The median condominium unit sale price was $471,500. Purchasing a condominium unit at a significantly lower price than a single-family home provides the new owner with the ability to more quickly build equity.
In conclusion, community associations are not quite the boogeyman they have been made out to be. Perhaps more importantly, well-run associations can assist in making housing more affordable in Washington.
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