Budget season is never the easiest time of year for HOA boards. Reviewing expenses, planning for the future, and making tough decisions about assessments takes time and effort. On top of that, explaining a budget increase to homeowners can feel discouraging.
Unfortunately, it is common for costs to increase each year. Inflation, higher vendor rates, insurance increases, and reserve funding needs all add pressure to the budget. Ignoring these changes might feel easier in the short term, but it often leads to special assessments or deferred maintenance later.
The good news? There’s a way to communicate these increases without creating frustration and conflict. It all comes down to being proactive, transparent, and approachable. Here’s how your board can make the conversation easier.
Start the Conversation Early
One of the biggest mistakes boards make is waiting until the last minute. If the first time homeowners hear about a budget increase is when the statement arrives, they’ll feel blindsided.
Instead, start talking about the process before the numbers are finalized. In late summer or early fall, let homeowners know the board is reviewing the budget for the upcoming year. Share updates along the way, so nothing feels like a surprise.
Example update:
“The board is currently reviewing next year’s budget and assessing vendor contracts. We’re committed to keeping costs as low as possible while maintaining quality and funding reserves for future projects. We’ll share more details as the review continues.”
This kind of message sets the tone early and builds trust.
Be Clear About Why the Increase is Happening
Homeowners want to know the reason behind the increase. If all they see is “Your dues are increasing,” it is easy for them to assume the board is overspending. Break down the factors driving the increase:
- Vendor costs: Landscaping, pool service, and janitorial contracts often rise due to labor and supply costs.
- Insurance premiums: Arizona HOAs have seen significant increases in recent years because of risk factors and claims.
- Reserve funding: Contributing to reserves is critical to avoid large special assessments later.
- Community improvements: New amenities or necessary repairs come with a price.
When homeowners see these are real, documented expenses, it shifts the conversation from blame to understanding.
Use Real Numbers and Examples
Avoid generic responses like “costs have gone up.” Show what that means in real terms. People respond better to specifics.
- “Our landscaping contract increased by 8%, which adds about $4,000 a year.”
- “Insurance costs rose by 15%, which equals $12 per household each month.”
This approach makes the increase feel logical instead of arbitrary.
Show the Value of Assessments
Most homeowners don’t think about what their dues cover beyond mowing the grass. Remind them of everything included:
- Maintenance and repairs that protect property values
- Amenities like pools, clubhouses, and common areas
- Courtesy patrols or gated access
- Landscaping that keeps the community looking great
- Water or other utilities
Frame assessments as an investment in the community’s appeal and property values.
Communicate in Different Ways
Not everyone reads emails. Use multiple touchpoints so everyone gets the message:
- Budget or town hall meetings where homeowners can ask questions
- Visuals like charts or infographics that show where money goes
- FAQs emailed to the community addressing common concerns
Keep the language simple and avoid jargon. The easier it is to understand, the fewer questions you’ll face later.
Avoid Common Communication Mistakes
Here are a few things boards should avoid when explaining increases:
- Being vague: Saying “costs have gone up” without details creates frustration.
- Overloading with details: Don’t share a 10-page financial report in an email. Instead, summarize and offer the full report for those who want it.
- Sounding defensive: Keep the tone positive and professional, even if some owners push back.
Provide an Opportunity for Feedback
Even if the increase is final, homeowners appreciate having a voice. Invite them to attend an open meeting or submit questions. Offer an email address for follow-up. When people feel heard, they’re less likely to feel frustrated.
Planning Ahead
Budget increases are never popular, but they don’t have to lead to conflict. When boards start the conversation early, explain the reasons, and keep communication clear and open, homeowners are more likely to understand. The goal is not just to collect assessments, it’s to maintain the community, protect property values, and plan for the future.
At Arizona Community First Management, we help HOAs develop and manage their budgets for long-term success. Contact us today to learn how we can assist your community in achieving financial stability!
480-644-9006
www.azcommunityfirst.com
