New Inflation Data Helps HOAs Navigate Economic Challenges
The Foundation for Community Association Research released its latest Inflation Financial Planning Snapshot that offers essential data to help more than 355,000 community associations across the United States make informed financial decisions. The resource provides community association boards and managers with insights to address rising inflation, labor shortages, and material cost increases.
“This data is an essential planning tool for community associations working to make informed decisions about maintenance planning, annual budgeting, operational costs, and reserve fund adjustments,” says Dawn M. Bauman, CAE, executive director of the Foundation for Community Association Research. “With rising insurance premiums, regulatory demands, and the increasing need for long-term financial stability, this resource provides actionable insights to help communities plan effectively.”
“Inflation affects every aspect of a community’s financial strategy,” says Marc Tamres, chief executive officer of HomeRun IQ and chair of the Foundation’s research committee. “This data enables community associations to better anticipate cost changes and make informed decisions on when to act — whether that means accelerating a capital project or adjusting a reserve funding plan. We believe it is critical to provide resources that support informed, more sustainable financial management for community associations.”
Key Insights from the Inflation Financial Planning Snapshot:
- Interpreting Inflation Data. Understand the differences between the Producer Price Index and Consumer Price Index with an emphasis on using the PPI as a more accurate predictor of labor and material cost increases.
- Labor Shortages Impact. Recognize the growing effect of labor shortages in the community association industry where wages are rising significantly faster than general inflation.
- Financial Planning Insights. Apply the data to make informed decisions on budgeting, capital projects, and reserve fund management in response to inflationary pressures.
Community association boards and managers are encouraged to work with reserve study professionals, accountants, and management experts to determine whether adjustments to their financial strategies are necessary. The Foundation recommends using blended inflation figures and carefully considering the timing of capital improvements to mitigate the compounding effects of inflation.
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Dawn Bauman, Chief Strategy Officer. As CAI’s lead advocate for federal and state legislative and regulatory affairs, Dawn works with volunteer leaders throughout the country serving on CAI legislative action and government affairs committees to advocate for strong and sensible public policy for America’s community associations.