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In your search for a new home, you may have encountered homeowners associations, better known as HOAs. These governing structures for planned communities help to maintain them — almost like property management in a rented home — in exchange for a monthly fee.

About 29% of Americans lived under some kind of community association like an HOA in 2021, according to the Community Association Institute.¹ Homes in communities with shared features like a pool, a fitness center, or active landscape management probably fall within the jurisdiction of an HOA. You may have heard horror stories about overzealous HOA board members or ridiculous fees, but HOAs exist because they do, generally, provide important services in exchange for your monthly fee.

What do HOA fees cover?

An HOA fee is a monthly due levied by the homeowners association that’s used to help maintain all properties, amenities, and common areas within the association. Similarly, condo owners may pay a condo owners association (COA) fee and co-ops come with their own set of fees, too.

Not all HOA fees cover the same thing, given that HOAs in different parts of the country have different amenities and required services. Before you buy in an HOA, it’s vital that you fully understand exactly what your HOA fee covers and entitles you to. Request a copy of the HOA's rules and regulations, known as the Covenants, Conditions and Restrictions (CC&Rs) for review before making any decisions.

Generally speaking, however, HOA fees usually cover:

• Municipal services like trash removal, electricity and utilities, snow removal, wastewater management, and security
• Maintenance and repairs for common areas and shared structures, including landscaping, pest control, and parking lot and neighborhood road maintenance
• Operating costs for amenities like pools, fitness centers, valet services, lounges, or higher-end security
• Homeowners association insurance for injuries sustained or damage caused to public areas
• Management fees like hiring a property management company to oversee the day-to-day operations of the community
• HOA rule enforcement to ensure homes look visually appealing and remain in good condition to maintain property values in the entire community
• Reserve funds to cover unexpected or irregular expenses, like fixing a burst pipe in the fitness center or replacing the roof of the clubhouse

If your monthly dues don’t account for a reserve fund, you might have to pay a “special assessment” in the event of an HOA emergency, so make sure you understand the terms of the CC&Rs.

Average HOA fees

According to the U.S. Census Bureau American Housing Survey, the average HOA fee nationwide is $170. But evidenced in the previous section, HOA fees may cover a wide range of amenities and services, and as such, monthly dues vary widely. The American Housing Survey found that most HOA members paid less than $50 a month in dues, but some pay more than $1,000 a month.

In high cost-of-living cities like New York City or San Francisco, everything is more expensive. Higher power costs, higher taxes, higher maintenance costs, and the simple fact that residents tend to earn high salaries all drive HOA fees higher. Smaller towns, on the other hand, will likely have much lower HOA fees because of the lower costs of services and lower wages of residents. All told, HOA fees are another cost of homeownership to budget for.

One study found that Honolulu, New York City, and San Francisco have the highest HOA fees while Harrisburg; Knoxville, TN; and Lancaster, PA have some of the lowest.

HOA fees by state

• California: $363
• Florida: $390
• Texas: $255
• New York: $571
• Illinois: $263
• Pennsylvania: $304
• Ohio: $239
• North Carolina: $327
• Georgia: $300
• Virginia: $332

You’re more likely to find HOAs in the West and South — where HOAs govern an astounding 75% of homes — compared to the Midwest and Northeast, where only 50% and 33% of homes come with HOAs, respectively.²

It's important to note that these averages are based on data from 2018 and may have changed since then.³ Additionally, HOA fees can vary greatly within a state based on the specific community and amenities offered.

Related: 13 unenforceable HOA rules to know

What affects HOA fees?

There are several factors that can affect the cost of HOA fees, including:

• Amenities: Communities that offer more amenities, such as pools, gyms, and tennis courts, may have higher HOA fees to cover the cost of maintaining and improving those amenities.
• Location: The cost of living can vary greatly depending on the location, and HOA fees may be higher in areas with a higher cost of living.
• Age of the community: Older communities may require more maintenance and repairs, which can lead to higher HOA fees.
• Size of the community: Larger communities may require more maintenance and management, which can lead to higher HOA fees.
• Reserve fund: HOAs typically have a reserve fund to cover unexpected expenses or repairs. The size of the reserve fund can impact the cost of HOA fees.

Whatever your HOA fees are, remember to factor them into your home buying budget. $100 a month might not sound like much, but that comes out to $1,200 a year on top of your regular mortgage payment. It could make a difference to your budget and to your lender, so make sure you’re pre-approved for an amount that includes the HOA fee.

Are HOA fees tax-deductible?

If the property is your primary residence, HOA fees are not tax deductible. If you purchased the property as a rental property, however, you may deduct HOA fees as a rental expense. If you live part-time in the home but rent it out for another part of the year, you may deduct the HOA fees for the time frame that you rented the property out.

→ Learn more about tax deductions for homeowners

How can I minimize HOA fees?

Failing to pay your HOA fees for an extended period of time may result in eviction or the community placing a lien against your home, so you do not want to become delinquent on these fees. There are a few things you can do to manage and potentially lower burdensome HOA fees.

Find communities with fewer amenities

Before purchasing a home in a community with an HOA, do your research. Look into the HOA fees and what they cover. Some HOAs provide more services than others, and the fees can vary greatly. Additionally, consider the history of the HOA, as a poorly managed HOA can lead to higher fees. Communities with fewer amenities, such as a pool or gym, may have lower HOA fees. While amenities can be attractive, they also come at a cost.

Budget for them

At risk of sounding snarky, don’t buy a home with HOA fees that you can’t afford. It’s crucial to incorporate HOA fees into your buying budget and ensuring that you may comfortably pay them every month. They aren’t an “extra” expense, they’re a core part of your mortgage that have a direct impact on keeping your home. Take these costs seriously from the outset of your home search.

Related: How much you should saved to buy a house?

Negotiate with the board

Be upfront with the HOA board or management company that you’re struggling to pay your HOA dues. They may put you on a payment plan or find another way to accommodate you. They don’t want to lose your dues entirely or have to find a new resident, so they’ll work with you. Ideally, they’re also human, and understand that financial struggles can strike anyone at inopportune times.

Stay informed or join the board

Keep up to date with the HOA's budget If you notice any unnecessary expenses or mismanagement, speak up at a meeting or contact the board directly. You can even join the board yourself to gain insight into where the money really goes. Get a look at the books and figure out where the HOA might be overpaying for certain services and where it can afford to cut back and lower HOA costs for everyone.

As the United States’ growth outstrips its housing supply, HOAs will only become more common. It’s important to understand how they work and what your monthly dues cover. Most of all, make sure to factor HOA fees into your home buying budget so you know what you can afford.

Article Sources:

1. Foundation for Community Association Research (FCAR): “Community Association Fact Book 2021.” Accessed March 23 2023.

2. iProperty Management: “HOA statistics,” October 9, 2022. Accessed March 23, 2023.

3. Community Associations Institute: “2020 Homeowner Satisfaction Survey.” Accessed March 23, 2023.��