The Future of Community Association Governance
What does the future hold? Unfortunately, not the jet packs and flying cars we all thought we’d have, but there are important changes in practice and perspective in store for community association governance.
To get at the heart of these upcoming changes and trends, Common Ground, an official publication of Community Associations Institute (CAI), brought 50 experts, members and stakeholders together to paint a picture of the future. The results from this panel have been published in the March/April 2016 edition of this publication. We’ve summarized the high points for you in this article, and we’ve added some insight from FirstService Residential, too.
“Looking ahead is essential to excellent community management,” said Katie Ward, Executive Vice President of Community Management for FirstService Residential in California. “By anticipating trends, we can proactively create best practices in order to deliver exceptional service and solutions to the ever-changing communities we serve.”
Let’s take a look at what to consider in the future for community association governance...
1. There is no one-size-fits-all model of community association governance.This one’s common sense: smaller associations have different requirements than larger ones. Unfortunately, sometimes the parties who matter most don’t see that. Future legislators, developers and associations will need to realize that smaller HOAs are often encumbered with rules and regulations designed for larger ones – and that creates unneeded obstacles. Another trend? Something called “policy governance.” This is an approach that redefines the way the board collaborates with community management companies. In a nutshell, it involves a series of parameters developed by the board, with the understanding that management will operate within them.
2. Training for volunteer board members.Some volunteers are running associations that are equivalent to multi-million-dollar corporations. That means the stakes are pretty high, so proper training for a role on the board is essential. Look to a great property management company to provide this kind of support.
3. We must take a different look at reserve studies.In the current landscape, all stakeholders – including developers, legislators and other essential parties – sometimes underestimate the value of a well-funded reserve prior to turning community control over to associations and owners. The ideal model is to enact state statutes that mandate a completed reserve study (that is adequately funded) be part of the initial documents given to the community by the developer. How do we get legislators to care? By positioning the reserve study as an essential form of consumer protection. This perspective would rally more individuals to the cause.
4. Demographics shift everything.Let’s look at what’s happening to our nationwide demographics: our aged population is growing, Millennials are becoming homeowners, and all communities are growing more diverse. This has a profound impact on associations. An aging population, where most residents are choosing to stay in their homes as they grow older, will require associations to shift their focus onto retirees (effectively aging into retirement communities). Millennials will enact procedures that mean fewer meetings, more use of email and text, and an emphasis on bringing the community together via social media. And a multicultural landscape will require more documents and communications be provided in bilingual format – with meetings held the same way. This makes effective property management more critical than ever, since professionals will be most adept at meeting diverse community needs.
5. Tech rules.Younger residents are going to require more electronic communication, with much of the association’s business happening online. That’s great – processes will be streamlined and engagement should be enhanced – especially when it comes to the emergence of online elections for board members. The best property management company will have a host of technology solutions for both board members and residents alike.
6. Our trade organizations will become more important.As legislative landscapes continue to shift, laws are being passed state by state that profoundly affect associations. Often there’s a disconnect between what gets legislated and what’s practical in our neighborhoods. Trade groups, such as CAI, will become more essential in helping our industry speak with a unified voice to ensure future statutes are grounded in common sense. They will also help to establish important partnerships with realtors and other groups.
Is your board ready for the future of community association governance? Consider what you’ve read here – and do your part to put it into practice – and you will be. For more insight, contact FirstService Residential, North America’s community management leader.