CPI

Started by RobertR1 • 3 replies • 1864 views

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RobertR1 (South Carolina)
Posts: 5,164

Posted:

Our management has determined our dues increase this year will be the CPI.
Located in southern urban, closest city about 35,000. They have come up with a figure of 4.7% using from Sept 2005 to Sept 2006.

Is that right? I can't seem to come up with that number using government figures, but I could be wrong.

CharlesW1 (Georgia)
Posts: 826

Posted:

RobertR1,

I am new and unfamiliar with all the language used in an HOA. I do not know what a CPI is.
I just reviewed our HOA budget for the upcoming year. We will need to raise assessments ourselves to cover operating costs alone. It should have been done years ago, but wasn’t so now the current board is not going to be liked by the majority of our community. For us the cost of everything has increased yearly. An HOA can not function on a year to year basis with the same income, and if they can that would be great too.

There are some very knowledgeable people on this discussion forum. I’m sure you will receive the advice you are seeking.
Best of luck

Chuck W.

Charles E. Wafer Jr.

GeraldT1 (<Not Specified>)
Posts: 519

Posted:

RobertR1,

I believe your MC is APPROXIMATELY on target.

Go to http://www.bls.gov/cpi/#data to see about Consumer Price Index (CPI)

Click on Inflation Calculator. $1.00 in 2005 has the same buying power as $1.04 in 2006. That is a 4.06% increase. In other words, in 2006 you are spending $1.04 for what you got for $1.00 in 2005.

GeraldT1
NNJ

RogerB (Colorado)
Posts: 5,067

Posted:

Robert, some associations tie their assessments to an inflation rate (such as the CPI). I can not speak to your specific area but 4.0% is often used. When I do a 20 year reserve plan I create senarios at 4.0% and 3.5% inflation rates.

Apparently your Board prefers a gradual increase each year rather than budgeting for their yearly needs. I don't personally care for that approach since the amount of the assessments changes every year and is not an even number. For example @4.00%: year 1= $627.50 vs $650; year 2= $652.60 vs $650.

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