By: Karen Martinez, CEO ASPM-San Diego
Close to a year since the COVID-19 pandemic upended our lives, we now have some insight into its financial impacts on community associations. Higher operating expenses and unanticipated costs due to the ongoing global crisis pose challenges to association budget projections, reserves planning, and maintenance requirements.
Many associations have incurred costs associated with cleaning and disinfecting frequently touched surfaces and seen increases in routine expenses such as waste removal, maintenance, and utilities as residents spend more time at home. Components in common areas and amenities also could see their lifespan shortened from increased use—resulting in repairs or replacements much sooner than a reserve study’s initial forecast.
Boards should anticipate increases in fees for professional services too. General costs of doing business rose globally in 2020 due to wage increases, annual inflation, increase in employer premiums, cost of living, and implementation of new technologies and equipment to manage remote workforces and provide continued services.
While companies can’t expect to pass all of these costs to their clients, some percentage must be recovered to remain operational. This is particularly relevant when comparing newer properties with aging community associations that require more resources and professional services.
Being aware of COVID-19’s ongoing effects on community associations and on the service professionals that support them will help boards and management more realistically forecast future expenses and minimize financial impacts.
The pandemic also has revealed a unique opportunity for boards to benefit their communities. It’s a good time to assess the condition of the association’s infrastructure and create a proactive maintenance plan to improve property values. If a large number of residents remain working at home and spend the majority of their time inside the community, boards can prioritize quality of life enhancements with aesthetic improvements to common areas, which also will increase curb appeal.
Community association management companies have always provided support and services to boards from an off-site location. Those with cloud-based technologies, newer property management software, and protocols for staff working remotely have all the tools in place to fully meet the needs of the association and its residents during and after the COVID-19 pandemic.
Virtual meetings and elections have become the norm to facilitate communication between boards, management, and residents. New technologies and close monitoring of employee productivity produce more transparent reporting from the management company for the communities they serve. Expanded access to personal accounts and association records give residents more autonomy and control to make assessment payments, request documents, and more.
While we can’t foresee to what extent COVID-19 will leave its indelible mark on our professional and personal lives, this new normal is teaching us to anticipate, prepare for, and leverage any outcome.
How is your community managing costs stemming from the COVID-19 pandemic? Comment below.