Quote:
Originally Posted by outlaw
The idea is that once the non-existent build out occurs, the developer will not have incentive to keep the fees as low as possible to not turn off buyers of new homes. This is a common strategy with many developments. The developer in many developments will eat a lot of maintenance and other costs that would normally be the shared responsibility of all owners, with the idea of keeping HOA fees down while new home sales are active.
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Theory is true, but I was wondering about actual numbers. Is the developer subsidizing maintenance?
Amenities fee = $145/mo from over 50,000 homes = 7.25 million/mo = 87 million/year
Costs?--would love to see the budget.
Here are some assumptions, they may be way off so feel free to pounce on this:
35 soon to be 38 executive courses:
The maintenance on a full 9 hole course in NY is about $140,000/year. This course is twice as long as an executive and does not have the economy of scale that 38 courses in proximity have regarding equipment, labor and chemical purchases, but because of climate is only open 7 mo/ year and gets far less play. So let's go real high and assume $120,000 year for each course = $380,000/ mo = 4.6 million/year
About 80 rec centers:
I am part owner in a 30,000 sq ft commercial office, cleaning and maintenance runs about $50,000 year. IF equivalent this would be about 4 million/year for the rec centers
About 80+ pools
My pool costs less than $1000/year, so let's assume $10,000/year for a public pool = $800,000/year
Plantings at RBs and intersections changed out 4x/year
Maybe $5,000/year each on about 100 = $500,000/ year
100 miles of MMP's---who knows, but it is Florida climate and not maintained by state workers, so throw a few million at that (unless getting striped)
Neighborhood watch and gates
Maybe a staff of 200 earning 25K /year max = 5 million/year
Any subsidy of nightly entertainment?
Say 1/2 of $800/night at each square = 4 million/year
So far, the above math only accounts for about 20 million/year of 87+ million. I'm sure I've forgotten some things, like the Sharon, the administrative staff, etc, but there seems to be plenty of room without major developer subsidy, so I'm not sure amenity fees are pre-destined to increase dramatically after the " build out"