How Much Should Your HOA Assessment Be? A Framework for Getting It Right

Too low and you defer maintenance, drain reserves, and eventually hit owners with a special assessment. Too high and you face pushback, reduced property values, and angry meetings. Here's how to find the right number.

The formula is simple. The politics aren't.

At its core, HOA assessments exist for one purpose: to cover the cost of maintaining common property. The formula is:

That's it. The assessment is not a tax. It's not a profit center. It's the cost of maintaining the building divided by the number of people who own it. Every dollar of assessment either pays for something today (operating) or saves for something tomorrow (reserves).

Benchmarks by building type

These ranges represent typical monthly assessments per unit in California as of 2025–2026. Your building may fall outside these ranges depending on age, amenities, and location.

If your assessment falls significantly below these ranges and your building is older than 15 years, you're almost certainly underfunding reserves. Buildings don't get cheaper to maintain over time.

How to calculate your assessment from scratch

Step 1: Add up operating costs

Pull last year's actual expenses (not budget — actuals). Adjust for known changes:

• Insurance: Get the actual renewal quote. Insurance has been increasing 8–15% per year in California since 2022.
• Utilities: Apply 4–6% inflation unless you have a locked rate.
• Contracts: Use the actual contract amounts for landscaping, janitorial, elevator, management, etc.
• Maintenance: Use 3-year average of actual repair spending, not last year alone. One year might be artificially low or high.
• Contingency: Add 3–5% for surprises. Something always breaks.

Step 2: Add the reserve contribution

Your reserve study tells you the recommended annual contribution. Use it. If your study recommends $48,000/year and you only budget $30,000, you're choosing to underfund reserves by $18,000 per year. That's not savings — it's a deferred special assessment of $18,000 per year, compounding.

Step 3: Divide by units

If all units are the same size, divide equally. If units vary, divide by ownership share (usually based on square footage or the allocation in your CC&Rs). A 1,200 sq ft unit should pay more than an 800 sq ft unit.

Worked example

A 30-unit condo building in the Bay Area:

$227,100 / 30 units = $7,570 per unit per year = $631 per month

That's the number. If the current assessment is $500/month, the board needs to raise it by $131. Not next year. Now.

When to raise assessments

The short answer: every year. Costs go up every year. Assessments should too.

The boards that get into the most trouble are the ones that hold assessments flat for 5 years because "owners will be upset," then have to raise them 35% all at once — or worse, levy a $10,000 special assessment. Small annual increases of 3–5% are far easier to absorb than one giant shock.

California rules on assessment increases

• Up to 20% increase: The board can approve this with a board vote. No membership approval needed. (Civil Code 5605)
• Over 20% increase: Requires approval of a majority of the membership (unless the board finds it necessary to meet the association's obligations).
• Emergency assessment: In extraordinary circumstances (emergency repairs, court order), the board can levy an assessment exceeding 20% with proper notice.

Special assessments: when they make sense

Special assessments get a bad reputation, but sometimes they're the right tool:

• Legitimate uses: Unexpected major repair (earthquake damage, construction defect settlement), one-time capital project that wasn't in the reserve study, or catching up from severe underfunding.
• Wrong use: Covering a chronic operating deficit. If you need a special assessment every 2–3 years, your regular assessments are too low.

Structuring a special assessment

If you do levy a special assessment, offer a payment plan. California law (Civil Code 5615) requires that any special assessment over $200 per unit be payable in installments over at least 12 months if an owner requests it. Even if your state doesn't require it, spreading payments reduces hardship and improves collection rates.

How to communicate an increase

The number one reason owners fight assessment increases is lack of context. They see a higher bill and nothing else. Here's how to do it right:

1. Explain the math. Show the total budget, the operating costs, and the reserve contribution. Make it obvious the increase isn't arbitrary.
2. Show what happens without the increase. "If we don't raise assessments by $45/month, we'll need a $12,000 special assessment for the roof in 3 years." Real numbers beat vague warnings.
3. Compare to alternatives. Owners are also paying for property insurance, property tax, and mortgage interest. An HOA assessment that covers the roof, siding, parking, and all common areas is almost always cheaper than owning a standalone home and maintaining all of it yourself.
4. Give advance notice. Don't announce a January increase in December. Discuss the budget at the fall meeting. Send preliminary numbers in October. Give people time to adjust.
5. Be honest about past mistakes. If the board held assessments flat too long, say so. Owners respect candor more than spin.

What if owners vote it down?

If the increase is under 20%, it's a board decision — no vote needed. If you need a larger increase and the membership rejects it, the board has limited options:

• Implement the maximum increase without a vote (20%) and plan another increase next year.
• Cut operating costs where possible (renegotiate contracts, reduce amenity hours, switch vendors).
• Reduce reserve contributions — but document this decision in writing, include it in the annual disclosure, and understand the long-term consequences.
• Consult your attorney about whether the board can increase assessments beyond the cap to meet legal obligations (deferred maintenance, safety issues, statutory reserve requirements).

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