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Comment by lopatin | Hacker News Reader

I'm planning to buy an apartment in Chicago (Lincoln Park). All these apartment buildings have HOA fees from $500 to $1k per month, so it seems to be pretty unavoidable here. Does this mean I should just avoid buying in the city all together? Renting for a lifetime doesn't seem great either.

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The article addresses this early on and mentions that it is specifically critiquing detached dwelling ("neighborhood") HOAs.

> condominiums are a different animal entirely in which you share ownership of the home with the HOA, who provides very specific and substantial services. As well, with condos most people recognize that property use is both restricted and totally necessary due to the communal nature of the arrangement.

> What I'm going to focus on from here on are mandatory HOAs in non-condominium neighborhoods

Those fees pay for common property (walls, elevators, roof—everything outside the paint) and amenities. They can be spendy, but they’re unavoidable. You pay them whether you rent or own, the only question is how.

If you buy a house, you don’t pay those fees, but you still pay to replace the roof, paint the house, deal with water intrusion, etc. Such are the joys of being a homeowner.

I don’t know about Chicago specifically, but HOAs in buildings are generally pretty different from hoas in neighborhoods.

They tend to handle all the common space issues like roofs and elevators, so they serve a real purpose other than being the property value police, which is also why they cost more.

Because you’re shoulder to shoulder with more people, rules enforcement is more important as well, although as always YMMV.

As a data point contrary to all the horror stories, I’ve been in a HOA in a small building for years and always appreciated what they got done.

In Lincoln Park as well, pretty much the only way to avoid HOAs are townhomes (which is the route we went, because of my prior condo experience)

The HOAs are so high they also make the economics of rental income very hard, so unless they provide amenities that have resale or rental pricing value you are just paying a monthly compliance fee. How they became so common boggles my mind.

Illinois condo law operates under the principal of no surprises. When you sign the sales contract, the HOA must give you a big dump of their records. You and your real estate attorney get a few days (I forget if it is 2 or 5) to look through it, ask questions, etc. You can cancel the contract and get your earnest money back if you don’t like anything at all. No joke - get a good real estate attorney.

Buildings with a reputation for being well-run sell for a higher price per square foot. Buildings that are really poorly run sell for cash only - banks refuse to write mortgages on them. In between the two extremes is just about everything else.

My advice is to look for a building that has lots of kids and lots of dogs. If the HOA is filled with crazy people that want to control every bit of your life, parents and dog owners will move out long before the single people will.

The building that I'm renting in in Chicago basically just has quiet hours, regulations on certain types of home renovations (the pipes are partially owned by the building not the individual units, any structural or wall changes, etc), and a few rules about use of the property (pets must go through the alleyway entrance not the front lobby and packages must be picked up from the lobby or placed in the stairwell within one day). It also has things like a management contractor for dealing with things like shoveling snow on the side walks (all tenants and property owners in the city are responsible for making sure this is done). And they do other stuff like trash collection and removal among other things.

Largely, just read the rules and make sure you want to live by them. Most are very reasonable at least in the city.

I don't think you're going to find many (any?) apartments for sale (so, condos or co-ops) anywhere that don't have an equivalent to an HOA/condo association/etc. The common ownership of the building, common areas, and so on pretty much demand that kind of structure.

HOA fees and other variable costs are usually rolled into the market price implicitly. Even in Manhattan, you see apartments with exorbitant HOA fees selling at sometimes significantly lower prices than ones without them. In fact, this can often be an exploitable pricing discrepancy if you're willing to run the numbers since all you really care about is the total monthly payment.

1k a month!? Why would anyone pay that? There must be some great facilities I guess (pool? gym?)

Where on Earth do you have to pay $1000/mo for a gym membership? I find condo fees staggeringly hard to justify.

Those fees are for a lot more than gym membership. Take a large building - have you ever looked at the maintenance costs for something like that? If you haven't the good news is that annual budgets and statements for the past x number of years are publicly available for these associations (at least where I live that is true). Before you buy a place, a good realtor will walk you through the association's finances and give you an idea of how well the property is managed.

One issue is that developers will often set an attractive low rate to sell the initial units, and it doesn't get appropriately adjusted as the building ages. Then down the road, when expensive stuff (roof, elevators, etc) need to get fixed or replaced, there isn't enough capital banked and the fees spike dramatically.

At my complex, the majority of the HOA dues are going to elevator and roof repairs (or rather, going to replenish reserves that were depleted due to those repairs)

Some of the money also goes to utilities (water, sewer, trash) which I suspect are cheaper to do communally than individually

1k/mo sounds high, but if you’re paying for elevator upkeep and inspections, landscaping, shared space HVAC, and door and maintenance people it’s easy to rocket past that.

Some fees also include water and trash.

It just depends how nice the services are, and/or how old the building is.

$1K/mo in Chicago is high but not abnormally high. It's basically a sign that they condo didn't have enough cash for repairs in the past.

It's important for the condo to build up a substantial amount of cash in case there is a necessary high capital outlay needed. Sit on a condo board for a while and look at all of the expenses, and then also imagine saving up enough because, at a minimum, you will need a new roof in 20 years, etc...

Also, deferred maintenance will destroy a condo, and the ability for any owners to sell. If the board has to recover from previous years of deferred maintenance while also building a fund for the future, people will simply have to face the reality and pay until the problem is fixed.

No, that is a condo association that is necessary in a building with shared structure that needs to be maintained. Not quite the same as a HOA that doesn’t have any purpose besides forcing people to conform with dumb rules on their own property.

Yeah, if I owned a condo you'd bet I'd want an HOA. It's one thing when everyone owns their own roof and yard, but quite another when it's a single building that multiple owners are sharing.

The article specifically says it's not talking about condo HOAs like the ones you're describing:

> What I'm going to focus on from here on are mandatory HOAs in non-condominium neighborhoods.

You do the best you can. If that's the market in Chicago you are better off buying.

Does Chicago have co-op building? They have different rules.

$500 to $1k per month for an HOA, per apartment??

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