Why San Diego Condos Are Getting Hammered: HOA Dues, Deferred Maintenance and SB 326

Condos and townhomes used to be the front porch to homeownership in San Diego. You might have wanted a yard, but a shared wall got you in the door.

Today, attached homes are under real pressure, and a big reason is the monthly fees.

It costs more to run a condo

Part of this is simple: it has gotten more expensive to operate these communities. Insurance and maintenance costs have climbed.

Part of it is catching up. Owners often didn't vote to raise their own dues, so maintenance got deferred. Then the bill arrives.

A roof on a single house might cost $30,000 to $40,000. A roof on a whole complex is a very different project, and everyone has to chip in.

We regularly talk with clients whose HOA fees have doubled in the last couple of years.

The balcony law nobody budgeted for

SB 326 is California's balcony inspection law for condo associations. Many communities are now catching up on inspections and repairs.

From what we're seeing, the costs vary widely:

• Smaller complexes may be lucky and land in the five figures
• Larger complexes can face six- or seven-figure repair jobs
• Some pass with little or no work needed, though that isn't the most common outcome

Those repairs can also matter for financing, because lenders and Fannie Mae and Freddie Mac want to be comfortable with a project before lending on it.

Is the HOA actually too expensive?

Here's a fair way to look at it. Detached homes have gotten more expensive to run as well. Their owners just don't get a line item showing a monthly average of future repairs.

So when you look at a condo's dues and think "damn, that's expensive," it may be close to what a homeowner should be setting aside anyway.

The catch is that lenders count HOA dues against you, which lowers your buying power, while the savings a detached owner should be making don't appear in the calculation. We explain that in Are HOA Fees Really That Expensive?

If you own a condo

• Read your HOA's budget, reserve study and meeting minutes
• Find out where your association stands on SB 326 inspections and repairs
• Ask about planned dues increases or special assessments
• If you're thinking of selling, gather those documents early. Buyers and lenders will ask.

If you're buying a condo

• Get the documents before you remove contingencies
• Compare low dues with low reserves. Low dues can be a warning sign, not a bargain.
• Have your lender check the project early
• Budget for increases, not only today's dues

Many of these catch-up increases may have already happened in the last two to three years, but every community is different. Read the documents for the one you're considering.

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Own or considering a condo? Talk to our team about how the numbers look for your building.

Disclaimer: Educational purposes only. The GreenHouse Group Inc. (CA DRE #01859042 | NMLS #366847). We are real estate and mortgage professionals, not CPAs, tax advisors or attorneys. This content is not individualized real estate, financial, tax, legal or lending advice. Cost ranges reflect our general observations, not quotes or predictions for any community. HOA rules, dues and legal requirements vary, so review the governing documents and consult qualified professionals about your situation.