CAI urges community associations to plan ahead as costs rise

Community Associations Institute outlined six steps community associations can use to manage higher insurance, maintenance and operating costs and protect long-term finances. The guidance comes as more than 78 million Americans live in community associations nationwide.

Why it matters: - Community associations manage shared housing costs for more than one-third of U.S. housing stock. - Rising insurance, labor, construction, utility and repair costs are putting pressure on budgets nationwide. - Stronger planning can help associations avoid funding gaps, protect shared assets and keep assessments aligned with actual needs.

What happened: - Community Associations Institute issued guidance on six priorities for boards trying to strengthen long-term financial stability. - The guidance was released Sept. 4, 2026, from Los Angeles. - Dawn M. Bauman, CAE, CEO of Community Associations Institute, said boards are facing increasingly complex financial decisions as operating and maintenance costs rise. - Bauman said communities that plan ahead, use reserve studies, identify cost savings and risk reductions, and keep homeowners informed are best positioned to meet future needs.

The details: - The Foundation for Community Association Research estimates more than 78.1 million Americans live in 373,000 community associations nationwide. - CAI recommends regular reserve studies to assess the condition and remaining useful life of major shared assets such as roofs, elevators and building systems. - CAI says its Reserve Study Standards provide a framework for planning long-term investments. - Boards should build realistic budgets and monitor contracts, utilities, insurance, maintenance and other major expenses throughout the year. - Association budgets are typically zero-based, with homeowner assessments set to cover necessary expenditures and no excess revenue. - CAI says assessments may need to rise when costs rise, and capping increases does not reduce underlying expenses. - CAI recommends strategic investments in energy-efficient windows, electrical panel upgrades and other sustainability measures that can lower operating costs and improve resilience. - CAI urges boards and managers to support homeowners facing financial hardship through early outreach, flexible payment plans and fair collection policies. - CAI says foreclosure should be a last resort after reasonable chances to resolve delinquent accounts. - Boards should reassess insurance coverage, deductibles and property valuations with qualified insurance professionals as markets shift. - Clear communication about budgets, assessments, reserve studies and upcoming projects can help homeowners understand financial decisions. - CAI says it offers education, research, standards and best practices on reserve studies, budgeting, insurance, risk management, sustainability, maintenance and governance. - More information is available in CAI's online resources.

Between the lines: - The guidance reflects a broader shift from reactive budgeting to planned, long-range financial management. - The emphasis on reserve studies and communication suggests associations may face more pushback if costs are raised without a clear explanation of need. - The warning about capped assessment increases signals that underfunding can create larger problems later, especially in older communities with major repair needs.

What's next: - Boards are likely to keep reworking budgets, reserve plans and insurance reviews as costs and risk exposure change. - Associations that adopt these steps may be better positioned to spread costs over time instead of confronting sudden special assessments or deferred maintenance. - Homeowners can expect more discussion of assessments, reserve funding and major projects as communities prepare for future expenses.