How Inflation Can Impact Your HOA or Condo

As there are economic shifts happening, you may wonder how this may affect your Condo or HOA. Inflation can lead to a variety of changes, and it’s best to be prepared. Here are a few area where you may see inflation impacting your community: 

Increase in dues

HOA dues can increase and decrease depending on various factors, however, inflation is typically the cause behind increased dues. Dues are calculated based on the projection of the upcoming year’s expenses and the budget to cover those expenses. It is then divided among the homeowners in the community. Expenses tend to increase due to inflation, thus also increasing dues. 

Reserve funds

Reserve funds are put in place to insure that there is money to cover any future repairs and are typically included in dues. Communities often hire professionals to conduct a reserve study, which is a calculated amount for future capital spending the community has on the horizon. This helps ensure the community is setting aside each year the appropriate contribution to maintain the fund at a healthy level. When inflation occurs, the reserve study may become outdated or inaccurate, and will require updating. Getting in contact with your reserve specialist is recommended.


It is important to make sure that any vendors who are in contract for future projects have the correct pricing. With inflation, the cost of goods and services rises, and you want to be sure your vendors have quoted you accordingly so there are no surprises. Rule of thumb in more economically stable times may be 2-4% increases for budgeting, but a number of maintenance, utility, and repair line items may be impacted more drastically and 2023 budget planning should reflect that.


Utility rates can be a bit of a moving target for budgeting. Your municipality’s water and sewer increases are often publicized, but electricity and gas often fluctuate. Those have seen a more aggressive increase in 2022 and likely will continue into 2023. If you utilize a broker for energy costs, it would be prescient to check in with them and verify anticipated increases and evaluate whether you want to lock into a rate to better control and predict costs.

Onsite staff

If your community employs staff directly, the reality is that wages have been and are increasing. Staffing continues to be more expensive and complicated than in years past. Evaluating current hourly rates and salaries, whether union or non-union, is crucial to ensure you’re allocating the appropriate dollars on your staffing budget. Expect that retaining good talent may require increases beyond what the community is accustomed to.

Effects on Insurance 

Following the trend of increased supply cost, you can expect that inflation will also continue to contribute to increased insurance premiums for both homeowners and associations. Current assets and common elements may have a higher replacement cost due to inflationary pressures. Getting in touch with your insurance agent will help ensure your coverage is appropriate and identify where your possible increased costs may arise on your premium.

To learn more about how inflation can impact your community, be sure to catch our seminar at The CooperatorEvents 2022 Chicagoland Expo- October 13, 2022

Come see us at Booth 219! 

The CooperatorEvents Expo brings together hundreds of property managers, board members, apartment building owners and condo, co-op & HOA professionals from all over Chicagoland.