Community Communication Corner

By The Numbers - The Rise of the “Over 55” Communities

Every year, I am impressed with the number of “newbies” (first-timers) that enter the world of community living by purchasing their first condominium or property that is part of a homeowners association. More impressive still, is the increasing number of folks over the age of 55 who are joining communities that cater specifically to their needs and desires. Megatrends are at work here and we seeing them trickle down to our own backyards here in CT.

More than 75% of the wealth in this country is controlled by a group of adults we call “Over 55.” The group of consumers that are 65-plus have twice as much per capita income as the average baby boomer. Is it any wonder that there are more “Active Adult” communities springing up around Connecticut than ever before? If you were a real estate developer looking for a fast-growing market segment with the means to purchase your product, you would be well-advised to invest your resources in creating communities that will attract this group of buyers whose numbers are going to continue to increase for the foreseeable future and beyond.

As a country, we have experienced a huge increase in life expectancy since the turn of the 20th century. We have added 30 years to the average life span, taking it from 46 to 76 years. Every 6 seconds, someone in this country turns 50 and one step closer to joining the “active adult” community. 55 million people in the U.S. are already members of the “Over 55” demographic. That number will double by the year 2030. These figures come to us courtesy of the Center for Mature Consumer Studies. I encourage you to visit their website at http://robinson.gsu.edu/marketing/Centers/cmcs_index.htm to learn more.

The success of these communities and the seemingly endless supply of new “Over 55” residents indicate that we will see far more of them in the years ahead. While the concept of “active adult” communities is nothing new, the diversity of amenities offered widely varies. The one thing they have in common is to restrict their communities inhabited by those who share similar and age-appropriate lifestyles. These communities are likely to thrive in the upcoming years as the numbers suggest that, as a whole, this is a financially secure group with the ways and means to live where and how they see fit. That means that as a community, they should have no problem creating healthy reserve funds to keep their common assets in top shape. Sounds like a great place to live!

I am, on occasion, asked about special communication requirements for “Over 55” communities. While that usually evokes a giggle of some little old man using a magnifying glass to read the community newsletter, the reality is that today’s “active adult” is no different than any other community member. They have just reached a certain age milestone. “55” is the new “35” and so is “65” and beyond in many cases! Community newsletters, websites, etc. are just as important in an “Over 55” community as they are in any other community. In some cases, the communications are more important as the audience is educated and takes the time to read the news of the community and to take action when needed.

Our “Over 55” population isn’t showing any sign of slowing down here in CT. I have had the pleasure of meeting and working with many residents of “active adult” communities and they have shown me that they have interests as varied as golf and tennis to scuba diving and parasailing. Some may be retired but very few that I have met plan on slowing down any time soon. I am excited to see new and viable “Over 55” community associations being born in our state. I look forward to welcoming many of these associations to CAI in the very near future.

Article from our upcoming Common Interest Magazine. To subscribe visit: http://www.caict.org/ci_subscriber.htm

Bob Gourley is one of the founders of MyEZCondo, a communications firm that specializes in newsletter production and other communication solutions for condominium associations. He also serves as Board President of Captain's Walk in West Haven, CT. MyEZCondo is a member of CAI-CT. Bob serves on the Publication Committee, Chairs the Membership and Website Commitees and was recently elected as President-elect of the Board of Directors for CAI-CT.

Is Your Association in Compliance with Changes in Fannie Mae Underwriting Criteria?

Changes in Fannie Mae’s underwriting standards for mortgages may very well create a violent storm for community associations. Lenders are now required to more carefully scrutinize condominiums and their management companies, which will ultimately mean more mortgage application denials.

Condominiums are considered to be very high risk in the current housing market since there has been a significant increase in condo owners that default and go into foreclosure. In many cases this has been caused by escalating property insurance premiums and/or major repairs due to long-term deferred maintenance which forced associations to impose special assessments.
Over the course of the past six months, Fannie Mae has gradually implemented requirements such as:

• No more than 15 percent of its association fee payments more may be more than one month delinquent,
• At least 10 percent of the association's total budget must be in reserves for capital expenditures and deferred maintenance,
• Lowering the loan-to-value ratio to no more than 90 percent for a condo resident,
• Associations must be majority owner-occupied or second-home purchasers and at least 51 percent owner-occupied if the mortgage is for an investor,
• At least 5% of the condo’s value must be derived from the borrowers’ own funds,
• Appropriate legal documentation,
• The adequacy of the association’s annual budget, and
• The adequacy of property insurance.

Although most of the major changes have been in place since February, they are just now beginning to affect the condominium market.
“Associations will be under additional scrutiny in terms of their overall budgets, reserves and delinquencies by unit owners. Throughout the Community Association Industry, we are now seeing increased client awareness of these changes at board meetings and daily telephone calls,” said Jordan Arovas at Webster Bank.

According to a Fannie Mae official, ‘requirements for condo projects are intended to ensure that the project is managed appropriately, and has adequate reserves and appropriate governing documents that will result in stability and sustainability for the entire project and its homeowners. ‘

Can you protect your association when developers fail?

We are already hearing stories about developers walking away from projects before all of the units are completed or sold. This is an association’s worst fear, but history shows that associations can emerge from these situations and remain solvent.

I run an association that was in that same situation in the early 90’s. The developer had a history of successful developments, but then the economy soured and banks were no longer lending money, the developer had no choice but had over the keys to this 166 unit complex with only a hand full of units sold.

Here are a few of the issues we experienced:
• A bank stepped in and attempted to run our association
• Units were rented by the new owner (the bank) to cover the costs of the monthly fees which were now their responsibility.
• The bank took over the efforts of selling and financing units – the same units they told the previous investor they could not finance.
• They were eventually forced to sell the complex for pennies on the dollar to an international investor because they could no longer hold the debt.

Each of these issues created their own problems for our unit owners. I am working on a detailed version of this document for our next Common Interest magazine. If you are interested in this topic or concerned about this possibility pick up the next issue of our magazine.

The good news is you can remain solvent and emerge from this type of nightmare as a healthy association. Hopefully we can provide you with a few ways that you can head off the problems we experienced and continue to experience as a result of investors that were more interested in profits than they were in the health of our complex.

Look for the complete article in our September Issue of Common Interest - Reserve Specialists/Finance/Banking.

Michael Zimmer is the President of The Meadows of Southington Condominium Association, Inc. Michael has served on the board of directors for this 166 unit complex in Southington for over 15 years and has held the position of President for the last 12 years. He can be contacted via email at mjzimmer@bigplanet.com. You can also read his postings on our association blog: caict.blogspot.com

A few energy saving tips.

Here are some energy saving tips to help reduce your electric bill this summer that we found on the internet:

Turn your thermostat up. During warm weather, set your thermostat as high as possible, given health and comfort considerations and drink plenty of fluids. Turn thermostats to78 degrees when at home; 85 degrees when away. Use fans to circulate cool air.

Close your drapes or shades. Windows are one of the largest sources of heat gain in your home. Although not as effective as exterior shading, keeping your drapes and shades closed during the day helps keep unwanted heat out of your home.

Ventilate when it's cool outside. Most areas of Connecticut have cooler nights even after the hottest days. Cut your cooling costs by opening windows when it's cooler outside than inside. In the morning, close up the house to trap the coolness inside.

Use ceiling fans wisely. Ceiling fans create enough air movement in a room to make it feel cooler by four degrees or more. They use only about as much energy as a 100-watt light bulb. Since you will feel cooler, make sure that you turn up your thermostat to 80 degrees or higher to save on your energy costs.

Eliminate wasted energy. Turn off lights in unoccupied rooms. Unplug or recycle that spare refrigerator in the garage if you don’t truly need it—this seemingly convenient way to keep extra drinks cold adds 10-25% to your electric bill. Remove the refrigerator door for safety reasons and to prevent mold.

Use appliances efficiently. Do only full loads when using your dishwasher and clothes washer. Run your appliances during off peak hours or after the sun goes down. Be sure to clean your clothes dryer's lint trap after each use. Use the moisture-sensing automatic drying setting on your dryer if you have one. When replacing these appliances, buy Energy Star products. They save up to 30 percent over standard models.

Plug “leaking energy” in electronics. Many new TVs, VCRs, chargers, computer peripherals and other electronics use electricity even when they are switched “off.” Although these “standby losses” are only a few watts each, they add up to over 50 watts in a typical home that is consumed all the time.

If possible, unplug electronic devices and chargers that have a block-shaped transformer on the plug when they are not in use. For computer scanners, printers and other devices that are plugged into a power strip, simply switch off the power strip after shutting down you computer.

Are some venders cashing in on the fuel crisis?

Recently I received a notice of increase from one of my vendors stating that they were increasing their fuel charge from $2.00 per delivery to an adjustable charge based on the average price of a gallon of diesel. My first thought was ok, oil has gone up considerably. My next thought was are they only delivering to me within a 10 mile radius? At the previous $2.00 per delivery this is about ½ of what it costs for a gallon of diesel. Even if they only have 3 of us in the same 10 mile radius we paid for that gallon of fuel used for the delivery plus some profit.

I called the company to cancel my service, to protest their cashing in on the fuel crisis, and they immediately changed there policy to offset for this obvious inequity. I imagine I was not alone in complaining and at the same time they probably had many other customers that just accepted that new charge without question.

The moral of the story is question extra charges added to your bill as this is a way to up sell and still appear to be competitive. Adding special coverage, delivery and handling, fuel adjustments, and other charges are a way to add in extra profit after the sale.

Vendors and professionals - Are you just another face in the crowd?

When you have a management company between you and your clients it is easy to let them make all of the contacts. This may be easier but is it the best course of action?

When money is tight, people start shopping for a better price,. When your competition is knocking on doors do you want to be just another face in the crowd?

If you have not made contact with the people who are actually paying your bills, it is difficult at best for your clients to separate you from the next guy who is probably looking to cut your price and cut you out...

Turn this around and let your clients know who you are, what you do, and how your service is better than your competition.

Here are a few ways to connect with your clients:

• Offer to attend a board meeting once or twice a year.
  
• Send out newsletters to the board of directors even if it is once a quarter.
• Host special events like meet and greets in your office or common location.
  

These days everyone is talking about "branding". You most certainly want to be someone that your associations connect with to help curb "best offer" transitions.

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Will Social Networks put "Social" back in Communities?

I imagine most communities are like the one I live in, which means residents are becoming more and more distant even though they live in close proximity. We have buildings with 18 or more units together and residents do not know and may not have ever seen people who live two stacks over. You may wonder how this is possible when you live in such close proximity to your neighbors.

I spent a while trying to understand why out of 166 families in our community I probably know about 20 by name and another dozen by sight. The rest of I could pass in the street and never know they were my neighbor.

What I came up with was:

• Our schedules have gotten busier,
• most of our entertainment is delivered right to our home,
• many of us have been taught to fear the unknown, so it is no wonder we do not know our neighbors.

We travel to and from our homes less frequently, we are able to be less social and still meet others and enjoy ourselves.

Can the internet and social networks turn this around? It is no secret that social networks like MySpace, Facebook, LinkedIn and others are connecting people from around the world. Why can’t sites like these connect you to the person next door?

Social Networks are taking on new life

The next generation of social networking is emerging and freeing us from the strangle hold and open nature of the top social networks. The new social networks sites actually let us create our own social networks where we can choose to only open the network up to a select few.

What does this have to do with planned communities? If social network sites connect people from around the world, why not to connect the person right next door. With this new generation of online social networks you can create a custom site that is only open to your residents of the community and their families. A private social network eliminates the spam, unwanted contacts from complete strangers, and the fear of predators.

Experts are predicting that most businesses, families, and other groups will have their own social network within the next 5 years. Using these new software sites, this just may become a reality sooner than they believe.

A POLICY OF INCLUSION

It never ceases to amaze me when I overhear association owners and Board members talk about dealing with “renters” or “tenants.” As an outside observer overhearing the tone, tenor and content of some of these conversations and comments, one would think that “renters” or “tenants” were the scourge of the earth or at best, second class citizens. At times, actions taken by associations toward “renters” or “tenants” have bordered on discrimination and other cases actually were discrimination. There have been cases I have observed in which “renters” or “tenants” have acted out in ways to fulfill those negative vibrations to the detriment of the association. In some cases, “renters” or “tenants” have retaliated against certain treatment by the association in very unpleasant actions in which the “renters” or “tenants” prevailed.

What is an association to do? It is clearly the association’s responsibility to manage the relationship, and that should begin with a policy of inclusion. The best place to start is to dump the labels of “renters” or “tenants” or whatever favorite less than positive reference an association may be currently using to identify them and go with “residents” for everyone who resides on the property of the association. If a differentiation of terms is required when communicating with each group, try “for residents who own” and “residents who lease.” As a lead-in for communications with each group, use the specific clarification required, then shift to the use of residents only. Or, use your own variation on the theme.

Individuals who lease within a community association in general are no different than those who own units. A neighbor is a neighbor, good or bad, no matter whether they own or lease their unit. These residents can bring a lot to the table for the association if given the opportunity. People lease for a variety of reasons, not just for financial reasons. If associations reached out to residents who lease, they may be surprised to find there may be a very talented group of individuals living in their community who are interested and willing to volunteer their time for the benefit of the community. Associations who are on the lookout for new Board or Committee members may have untapped resources within their community.

Next step is follow-through. Establish policies that include residents who lease. Amend your Documents as necessary to include these policies, and then communicate the policies.

Some suggested policies are:

• Allow and encourage residents who lease to serve on Committees.
• Allow and encourage residents who lease to serve on the Board, provided the majority of Board members are residents who own.
• Communicate these policies and document provisions to realtors who are involved in leasing units.
• Communicate these policies and document provisions to residents who lease their units.

Some suggested document amendments are:

• Require that leases be in writing.
• Require that leases contain a provision that the lease is subject to the documents of the association.
• Include a copy of the association’s documents as an exhibit to the lease.
• Require that a copy of each lease be on file with the association.

Then communicate all of the above to all residents again and again and again, as well as actively implementing the policies.

The impression that managing a community association does not take effort and work is misguided. It not only takes effort and work, at times, it takes nerves of steel.

A policy of inclusion will do “what can be done.” The rest is up to the residents of the community to put it all together. There are no guarantees but doing something in this case is better than doing nothing.

Al Griffiths, PCAM is the owner of Whitney Management & Maintenance Co. based in Hamden. His firm is the only AAMC certified company in Connecticut. Al frequently speaks at CAI-CT education programs.

Water: Every Drop Counts

Water is a precious natural resource. Despite the large proportion of land versus water on Earth, only 3% of the water is fresh. And, less than one third of 1% is actually available for use. The rest is frozen in glaciers or polar ice caps, or is deep within the Earth beyond our reach. Growing populations and ongoing droughts are dramatically reducing our water resources.
There are a myriad of reasons to make every effort to conserve water. The two most obvious: it will save you money in the long and short run and future generations need us to take responsibility for protecting this life sustaining resource.

Tips for Conserving Water
Bathrooms: In the United States, 27 per cent of our water is used for bathing.

• Never use your toilet as a waste basket.
• Do not let the water run while shaving or brushing teeth. (Saves 4 gallons per minute. That’s 200 gallons/week for a family of four.)
• Take short showers instead of tub baths.
• Use a water-conserving showerhead which can save 350 pounds of CO2 a year.
• If you must use a tub, close the drain before turning on the water and fill the tub only half full. Bathe small children together.
• Never pour water down the drain when there may be another use for it -such as watering a plant or garden.
• Repair leaky faucets. They can leak up to 100 gallons of water per day!

Kitchen and Laundry:

• Keep drinking water in the refrigerator instead of letting the faucet run until the water is cool.
• Wash fruits and vegetables in a basin. Use a vegetable brush.
• Do not use water to defrost frozen foods, thaw in the refrigerator overnight.
• Use a dishpan for washing and rinsing dishes.
• Scrape, rather than rinse, dishes before loading into the dishwasher.
• Add food wastes to your compost pile instead of using the garbage disposal
• Operate the dishwasher only when completely full.
• Use the appropriate water level or load size selection on the washing machine.

Outside:

• Sweep driveways, sidewalks and steps rather than hosing off.
• Wash the car with water from a bucket, or consider using a commercial car wash that recycles water.
• When using a hose, control the flow with an automatic shut-off nozzle.
• Avoid purchasing recreational water toys that require a constant stream of water.
• If you have a swimming pool, consider a new water-saving pool filter.
• Lower pool water level to reduce amount of water splashed out.
• Use a pool cover to reduce evaporation when pool is not being used

Equipment:

• Repair all leaks. A leaky toilet can waste 200 gallons per day. To detect leaks in the toilet, add food coloring to the tank water. If the colored water appears in the bowl, the toilet is leaking. Toilet repair advice is available at www.toiletology.com/index.shtml.
• Install ultra-low flow toilets, or place a plastic container filled with water or gravel in the tank of your conventional toilet. Be sure it does not interfere with operation of the toilet’s flush mechanism.
• Install low-flow aerators and showerheads.
• Consider purchasing a high efficiency washing machine which can save over 50% in water and energy use.

You’re In Control

• Try to do one thing each day to save water. It’s fine if the savings are minimal. Every single drop counts, and every person can make a difference.
• Make sure your children and grandchildren are aware of the need to conserve water.

Take the water awareness test and see how you measure up. Go to: www.getwise.org.