Expected Challenges and How to Plan
For many, 2024 has been a challenging year to be a member or leader of a community in Florida. Increasing insurance costs, new safety and structural requirements for older condominium buildings, and a law mandating financial reserves be fully funded have all been hot topics of discussion and action. It’s a financially taxing trifecta that is straining many association budgets, not to mention the wallets and personal budgets of their community members. The Wall Street Journal and other news publications have spotlighted the situation in Florida and noted that several people are delaying retirement and going back into the workforce simply to pay for rapidly escalating association fees and to remain in their homes.
The challenges communities and others in the industry are facing did not happen overnight and cannot be resolved in one monthly meeting, but the start of a new year offers an opportunity to approach these challenges with fresh eyes and a fresh outlook.
Associations should look to the future and approach it strategically, carefully considering long-term planning to ensure the livelihood of their community.
Many communities are looking for money-saving options, given the trifecta of increases already mentioned. Something to keep an eye on is advanced security systems, which will increasingly be using artificial intelligence (AI) to keep communities safe. While AI itself can be a daunting and scary concept, in the world of security, AI is simply interpreting data to help make security-related decisions more quickly, thus averting danger, keeping communities safer, and doing it more efficiently.
Some homeowner associations may be looking at how to maintain or enhance their property values. Established associations need to be competitive with surrounding communities to maintain their property values. This might mean new or upgraded amenities, refreshed landscaping and curb appeal, or modernized security solutions. Associations should keep in mind that curb appeal and state-of-the-art security systems are often the first impressions for visitors and potential buyers.
For those living in an older condominium building, allocating money to a rainy-day account could be the top priority. That’s because any budget adopted on January 1, 2025, or later must fund reserves as established by the structural integrity reserve studies (SIRS). For some associations, building up these reserves is a new, monumental challenge. Previously those reserves could be waived, but a new Florida law mandates the reserves be fully funded going forward.
If an association wants to make elaborate structural or amenity changes, it should check to see the availability of contractors and vendors in their area. Hurricanes, tornadoes, and other storm-related damage have some contractors spread thin. This may be the year to move aesthetic projects into the latter half of the year when materials and contractors may be more readily available.
Given all these challenges, some boards may wonder if they can afford property improvements or even suggest changes to their communities. But this is the perfect time for associations and property managers to view things differently and determine the vision for the next year and beyond. And, if you don’t know the vision for your community yet, take advantage of this planning time to create one that board members and managers can all get behind. As the old saying goes, “If you don’t know where you’re going, any road will take you there.” Find a direction and determine your board’s destination.
How do you plan? Schedule time to go to an off-site location where you won’t be interrupted. Use a whiteboard or oversized Post-it® notes boards where board members can write objectives. This is an opportunity for property managers to lead a discussion and help the association determine its strengths, weaknesses, and opportunities. The long-range plan and vision are crucial for the board, community members, and property managers, and it will ultimately help you when an important issue comes up. You’ll be able to weigh the pop-up problem against the vision and plan previously created.
Planners offer this suggestion to property boards and residents: ask yourself, “Where are we going, and how will we get there?” In other words, get everyone on the same page with a shared vision and direction. Create goals and outline how you can achieve them step-by-step. Creating a one-year, a five-year, and even a ten-year strategic plan helps boards align and stay focused, and board alignment is critical to helping a board stay on target. These plans also provide solid direction for property managers, who can then anticipate the needs of the board and the community.
Without consensus and focus, it is difficult for boards to be proactive and stay on target with their projects. This is where a manager can assist with strategic leadership and encouragement to make sure nothing veers off course.
With a carefully outlined plan, complete with dates and goals on a calendar, a community and its team can better determine what happens when, and who does what. For example, if new security solutions are needed, everyone can mark the date when the community begins asking for consultations and bids. Then, determine the date that all options will be compared; and finally, decide when the board makes its decision. Not only does the manager have the direction he or she needs by doing this, but everyone remains accountable, and the community can more easily measure its successes.
Having a plan in place also helps reassure your community’s members that you are carefully considering the property’s future and their investment in it. Strategic planning can be challenging, but it’s a win-win-win for boards, property managers, and community members.