For the second year in a row, CINC Systems has surveyed community managers, management company executives, and board members throughout the country to determine the State of the Community Association Management (CAM) Industry. The feedback and responses indicated several common concerns for the future of the CAM industry and highlighted a variety of interesting concepts, both familiar and new.
As the world has seen dozens of times throughout the 2020s, much can change in a single year. Egg prices skyrocketed and subsequently plummeted over the course of 4 – 8 months thanks to a particularly virulent strain of avian flu. The housing market exploded seemingly overnight, doubling or sometimes tripling the value of homes throughout the country. Reactive condo maintenance legislation passed with lightning speed in the wake of the Champlain Towers South condo collapse in 2021.
All of this to say, change is all around us, and the CAM industry is seeing that first-hand. After publishing the results of the 2023 State of the Industry survey, there are some universal truths that still remain, and just as many changes that management companies and community associations should stay aware of for the future.
What Was and (Likely) Always Will Be
There are a few standard concerns and trends the CAM industry will probably always face. We saw these issues in the feedback from both the 2022 and 2023 SOTI results and firmly believe these trends will continue into the foreseeable future.
- Underfunded Reserves & Deferred Maintenance – Despite some states requiring reserve studies and funding percentages for reserve funds, most communities can barely sustain the minimum expectations. In fact, it’s predicted that 1 in 5 communities will go cash flow negative in the next five years. Funding for the future requires strong buy-in from the community, and most boards struggle against problematic homeowner apathy. Though several states are also passing new legislation requiring maintenance for certain communities, it’s likely we will see the majority of HOAs and condo associations struggle to financially support these expectations long-term.
- No Emergency Preparedness – Many community associations admit to having either an outdated plan of action for emergencies or no plan at all–more than that, even fewer have any plans to update or create those plans. As much as this is on their radar, it isn’t a high priority, and it will be important for CAM managers to impress upon their boards the real value an emergency preparedness plan can bring.
- Cost-Conscious Boards – one of the biggest concerns for management companies in both 2022 and 2023 was the fact that boards tend to laser-focus on expenses. It’s important and financially responsible, but everything comes with a cost, and when most boards seek out the cheapest solution rather than the most cost-effective and best option, there is always fallout. Management companies will need to continue to justify their costs.
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Where Change is Happening or About to Happen
- Managing Manager Burnout – The shortage of CAM managers and the increasing levels of manager burnout are definitely still here, make no mistake. Every day more and more managers are leaving the industry entirely, and there is still little to no new talent filling that gap. But new solutions are cropping up. Virtual employees are taking on day-to-day tedious tasks that tend to drown managers. Answering phone calls, responding to generic emails, and general homeowner communications are all simple tasks a VE can handle, allowing managers to rebalance their workload and mitigate burnout.
- Reevaluating Retention – In both 2022 and 2023, management company growth was a high-ranking goal. But few management companies factored client retention into those goals. In 2023, it will be important to reconsider growth. Retention IS growth, and dedicating time and effort to client retention will be a new avenue of effort for many management companies.
- Embracing Self-Service Technology – In the past, community associations have been actively against adapting to new technology. But as the generational demographic of the workforce and homeowners skews further and further into the millennial bracket, that technology avoidance begins to disappear. This means that today and in the coming years, we expect to see a significant shift in communities demanding self-service tools and functionality. That said, they may not even realize that’s what they’re looking for–self-service is a catch-all aide for so many pain points, such as lack of transparency, disempowered homeowners, and even manager burnout.
Pushing For Change
Change is a very good thing, and there are several areas in the CAM industry that can and will see a massive change in the coming year. But taking steps to create the change you want to see in the industry will be just as critical to industry growth and success.
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