PLAN NOW. OR PAY ALL AT ONCE.
California homeowners deserve responsible infrastructure planning, not policies that guarantee financial crises.
The Problem
Every community association in California is responsible for maintaining the infrastructure its members share: roofs, plumbing, elevators, roads, pools, and more. These costs are real, they are rising, and they are unavoidable.
Under current law, association boards can increase assessments up to 20% annually without a membership vote to keep pace with these costs. Most associations increase by far less. But when insurance premiums spike, construction costs rise, or a major component reaches end of life, that flexibility is the difference between a planned budget adjustment and a financial emergency.
SB 1007 would replace this authority with an inflation-only cap. The actual costs associations face, including roofing, plumbing, paving, skilled labor, and insurance, consistently outpace general inflation in California. Tying assessment authority to inflation is a mandate to fall behind, even under the best management.
The Consequence
When associations cannot keep pace with costs, reserves are depleted. When reserves are depleted, maintenance is deferred. When maintenance is deferred, components fail. And when components fail with no reserves, the bill arrives all at once as a special assessment of tens of thousands of dollars per homeowner.
These sudden financial obligations disproportionately harm seniors, first-generation homeowners, and families on fixed incomes. The very homeowners assessment caps claim to protect are the ones most devastated when underfunded reserves force a large, unplanned expense.
Assessment caps do not reduce costs. They defer them until they arrive in the worst possible form.
The Ripple Effect
The consequences of underfunded reserves extend beyond maintenance. Beginning in 2026, Freddie Mac and Fannie Mae will not underwrite mortgages for properties in associations with reserve funding below 10% of projected needs, a threshold that may rise to 15% in 2027. Beyond the maintenance crisis, underfunded reserves can freeze a community’s real estate market entirely. Homeowners who need to sell cannot find buyers who can secure financing.
Reserve funding is not an added cost. It is the true cost of ownership. Every component in a community has a lifespan. Roofs, elevators, plumbing, and roads will all need repair or replacement on a known timeline. Funding reserves to meet those needs is how communities avoid surprising homeowners with costs that should have been planned for over the long term. Policies that restrict an association’s ability to build reserves do not lower the cost of ownership. They hide it, until it arrives all at once.
The Solution
AB 2050 would require associations to maintain reserve funding levels that prevent projected balances from falling below zero over 30 years. It builds on California’s existing reserve study framework by adding the piece that has been missing: a requirement to actually fund the plan. The 2032 operative date gives associations six years to adjust, providing a responsible phase-in rather than a sudden mandate.
SB 1007’s inflation-only cap would undermine this goal by stripping associations of the tools they need to build and maintain adequate reserves.
The Bottom Line
Homeowners associations are not businesses collecting profit. They are their members. Under state law, associations can only assess what is necessary to cover anticipated costs. There is no margin in a HOA budget.
The question is not whether homeowners pay for maintenance. They will. The only question is whether they pay gradually and predictably, or suddenly and devastatingly.
Contact your legislator. Protect HOA reserve funding. Oppose SB 1007. Support AB 2050.
