Why are those Silicon Valley HOA dues so high?

Homeowner Association DuesWhy are some HOA dues so high in certain Silicon Valley townhouse or condo communities?

If you are shopping for a Silicon Valley condominium, townhouse, loft or other property that’s part of a home owners association or “HOA”, you may find yourself flabbergasted at some of the dues being charged in San Jose, Los Gatos, Saratoga, and all over Santa Clara Valley. Today we’ll go over what may be happening in them to cause this problem.

HOA dues may cover a number of things, and if it’s a luxury complex with luxury amenities, those dues will be high:

  • common areas, such as driveways, parking, pool, fitness center, rec room, elevators, landscaping, golf course membership, etc.
  • insurance: regular homeowners or blanket insurance but perhaps also earthquake or flood insurance
  • reserve account funds for planned improvements may have run too low and need bolstering (repainting, termite work, reroofing, repaving, pool plastering etc.)
  • covering the defaults from units where the owners are in or about to be in foreclosure

What is the range of pricing for HOA dues in Santa Clara County and Silicon Valley?

Depending on the age of the property and the amenities, the dues may run between $300 and $350 on the low end (newer, no amenities) to close to a thousand on the high end (The Villages retirement community has extraordinarily high dues but they may include membership in the golf course too). I’ve seen some in Menlo Park closer to $2,000 per month!

“Normal” is anywhere from $400 to $500 per month for a typical condo or townhome community.

Dues over $600 per month will deter investment buyers.  Dues over $700 per month will deter almost everyone! (more…)