Four Factors Shaping Association Living in the Coming Decades

Posted on Thursday August 04, 2016 |

The Silver State is no stranger to change. And that goes for Nevada homeowners’ associations, too.
The key to navigating changes within HOAs is to anticipate them. That’s why the trade organization, Community Associations Institute (or CAI), brought together a panel of experts to discuss what’s ahead for common-interest communities in Nevada and across the nation. Their findings were featured in the group’s publication, Common Ground, and we’ve put together a summary of what they discovered, along with some key insights of our own.
 
“In the coming two decades, Nevada HOAs will experience a transformative time,” said Steven Parker, president of FirstService Residential in Nevada. “In anticipation of these changes, we’re working closely with the boards and communities we serve to develop specific strategies to address them. This proactive approach will ensure we continue to maintain a high quality of life for community residents.”
 
Let’s take a look at the major factors that will influence associations in the next 20 years.
 
1. A need for legislation education
The bills that get passed by the Nevada state legislature will continue to have a real impact on how our residents live and how our boards govern. Board members must dedicate themselves to staying educated on what measures are being proposed and how they might affect common-interest communities.

Recent Nevada legislation shows just how important this is. For example, Assembly Bill 192 (AB 192) makes changes regarding when developers (called the “declarant” in the bill) turn control over to boards. For those associations with 1,000 or more units, developer control now ends 60 days after owners have assumed control of 90 percent of the units. Also, the bill mandates that 25 percent of board members in these communities must consist of owners, or at least one board member must be an owner. This balance must take effect within 60 days of the time the developer has sold 15 percent of the units to private owners.

Another law, Assembly Bill 125 (AB 125), creates changes in how associations can submit construction defect claims. Those claims must now be made within six years of the completion of the construction project. Other aspects of the bill include limits on claims to common areas and new requirements for insurance.

As a way of navigating these sometimes complicated waters, it will become more and more important for associations to partner with a good community association management company. These organizations maintain an active involvement in the legislative sessions, so they’re a key source of both information and influence.
 
 
2. Meeting multigenerational needs
As the demographics of our population change, associations will need to be nimble enough to appeal to their diverse needs. Millennials—individuals born between 1980 and 2000—will become the group most commonly living in communities with associations. This is a generation unlike any other. They’re digital natives, so there will be a growing need to provide technological solutions for activities such as voting. Associations will need to become more adept at using social media to communicate with this audience, in addition to providing standard communication channels like newsletters. Communities will also need to update their amenities to remain relevant, for example, providing Wi-Fi at the pool.
 
As other populations age, amenities and programming will also need to be adjusted to accommodate this more mature set. Diversity is becoming more important, too, so community association management strategies will need to include communications that resonate with different cultures and are delivered in multilingual formats.
 
Buyers across all generations are also becoming more discerning in what they look for in a community. This means that associations should be aware of what their competition is offering and stay at the forefront of new and relevant offerings. Staying relevant means having a comprehensive understanding of how policy, technology, and generation-specific needs intersect. For example, sustainability will continue to be a focus not only for residents, but as a critical cost-control measure for associations.
Because of this complexity, it’s more important than ever for associations to partner with forward-thinking community association management companies.
 
3. A greater understanding of roles
Associations are there for the benefit of residents. Yet all too often, owners misunderstand the role of the association as that of rule enforcers. Moving forward, it’s critical that the people who live in common-interest communities understand the value that the association brings. This will require a better understanding of what an association does and what residents can do to make it stronger.
 
Boards must redouble efforts to connect with residents and invite them into the decision-making process through volunteerism and engagement. Along the way, they must also demonstrate the kind of financial stewardship, community-building, and lifestyle programming that makes association living so rewarding.
 
The good news is that associations are starting from a good place. The Foundation for Community Association Research recently conducted a survey of association residents in the U.S., and the findings were encouraging:
 

  • 64 percent call their relationship with their association “positive”
  • 90 percent say board members are operating with the best interest of the community
  • 83 percent get along with their closest neighbor
  • 92 percent are on friendly terms with their board members
  • 70 percent believe the association’s rules improve their property values
 
From this data, it’s clear that the best way to communicate the value of association living is to provide a quality lifestyle. To continue, boards must plan appropriately for the future, while maintaining a positive community atmosphere in the present.
 
4. Engaging all stakeholders
Put simply, we’re all stronger when we work together. That means making a concerted effort to help developers understand the critical role they play in laying the foundation for a successful association from the start. It also means educating real estate agents on the value of association living so they can communicate those benefits to their clients. And it means creating a culture in which board members want to be involved with industry trade groups like CAI so they can benefit from their policy and legislation knowledge and influence.

With the help of a good community association management company, you can take full advantage of the opportunities that lie ahead and continue to create value for your residents. For more information, contact FirstService Residential, Nevada’s leading community management company.

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