The Future of the HOA: Top 7 Changes for Modernizing HOAs

The demographics of homeowners are changing, which means homeowners associations are rushing to adapt their HOA software and policies to the demands of a younger HOA community with more technologically advanced expectations. 

While Americans over the age of 45 are much more likely to own a home than rent, the number of Millennials and Gen Z homeowners is increasing at a rate that outpaces their parents and grandparents. 

In 2020, millennials accounted for three of every five first-time homebuyers, according to a homeownership survey from the home insurance company Zebra. 

According to the U.S. Census Bureau, younger Americans are driving the housing market.

The trend toward younger homeowners has continued since, with the number of purchasers under 35 increasing by 4.5% between 2016 and 2022. Homebuyers between 36 and 45 also rose by 3.6%, while older generations mostly held steady in homeownership rates. 

The most significant demand from Millennials and younger generations of homeowners is a focus on financial security, improved quality of life, kid-friendly green spaces, and convenience to work and school (That’s right, Gen Z is buying houses now.). 

On the other hand, the biggest regret for first-time homeowners is a lack of financial transparency, with 56% of millennial homeowners reporting regrets about their purchase—the majority citing hidden costs as the main sticking point. 

A good HOA can address almost all of those concerns and, in many cases, mitigate them with improved governance and upgrades to HOA accounting software. 

Here are some common concerns and ways your board can address them with HOA software. 

1. Software and Tech 

Young people live in a technology-enabled world. For at least one-third of older Millennials lives, they’ve been able to answer any question, access any form of entertainment or information, and order nearly any product to their door in a matter of hours or days, all with the click of a button. 

Most are already using technology in smart homes and energy efficiency tracking devices (Alexa, are you listening?).

These technological expectations apply to almost all generations, but the younger generations don’t know another way to communicate or conduct business. 

Why would they expect anything less from their dues payments, questions about regulations, incident reporting, document management, voting, and neighborhood communications and planning?

But an increased reliance on technology doesn’t have to be a burden. Good HOA accounting software includes the tools most HOAs need to automate collections, improve financial transparency, and streamline planning and communications. 

And streamlining everything through HOA software often increases HOA participation, especially when it comes with mobile tools for neighbors to engage easily.

2. Data Analytics 

For the most part, Millennials and Gen Z expect more transparency from the businesses and organizations they work with. Plus, those generations already report feeling duped by poorly communicated housing expenses. They want to know why they’re paying HOA fees, where the money is going, and if that’s the most efficient use of the funds.

Finding an HOA accounting software solution that can report data, monitor trends, and increase visibility into your neighborhood’s financial status, you’ll be prepared to answer those questions promptly and accurately.

With well-organized data at your fingertips, you can monitor trends in your community, like usage patterns, maintenance needs, and budget allocation. Analytics also allow you to plan for the future by staying ahead of housing trends, projecting expenses, and monitoring cash flow. 

3. Sustainability

Sustainability is a crucial consideration for most homeowners, even if generations are divided on environmental and climate issues.

Residential solar panel installations continue to increase year over year, and homeowners are turning to mobile technology and AI-powered devices to reduce energy consumption.

Older and retired homeowners value the cost of living highly, seeking ways to reduce monthly expenses. Utility usage plays heavily into this value. 

These values also extend to shared spaces, with residents expecting their HOA to uphold similar environmental and cost-saving values. 

4. Community Communications

Whether your neighborhood prefers newsletters, social media, community websites, disjointed group texts, or a combination, clear, community-wide communication is key to a thriving and engaged neighborhood. Most good HOA software solutions come with built-in communications portals, often with easy-to-use mobile apps. 

According to the leading Customer Relationship Management Software, Salesforce, 65% of customers prefer self-service channels to solve simple problems. An HOA software platform with robust document management allows your HOA to keep all valuable information in one place, reducing the number of frequent questions you and your team have to field.   

The best HOA software platforms go beyond simple communications channels to include the following capabilities: 

• Mass communication
  • Automated emails
  • SMS text alerts 
  • Automated phone calls 
• Snail mail
  • Invoices
  • Violations notifications 
  • Official letters and documents
• Community messaging
  • Message boards
  • Forums
  • Self-service document management
  • Surveys

5. Legal Practices 

Compliance is the number one concern for most HOA boards, especially those in self-managed associations. With neighborhood demographics increasingly skewing toward younger generations, associations must engage in legal and financial practices that are compliant and transparent to the dues-paying community. 

HOA accounting software, built specifically for self-managed HOAs like yours, can help you take your financial reporting out of a spreadsheet and into a secure database built for compliant HOA reporting.

With better financial reporting and transparent governance documents organized in one secure location, it’s easier than ever for self-managed HOA boards to maintain bookkeeping, fair housing, data privacy, and property rights compliance.

6. Diverse Housing Models 

The changing demographics of homeowners have brought with it a rise in the popularity of middle housing, such as townhomes, condos, garage apartments, and “granny flats.”

As the largest generation of homeowners ages out, many are moving into multi-generational homes or smaller homes in their communities. At the same time, younger generations are focusing on sustainability by building modern homes, renovating existing homes, or similarly seeking middle housing. 

Soon, HOAs may have to rethink their approach to housing and architectural regulations in their covenants to ensure they meet the needs of everyone in their neighborhood.

7. Alternative Revenue Streams 

For most HOA boards, reducing fees was already a primary focus. But it’s worth repeating that hidden costs are the biggest regret amongst young homebuyers, and HOA fees can likely be counted among those expenses. 

Cost reduction is the most common way for HOAs to reduce fees, but lower dues usually come with reductions in service, amenities, quality, and, ultimately, property value. 

Another option is to create alternative revenue streams, like event leasing or EV charging stations. Some HOAs offer non-resident annual memberships to the shared amenities or lease unused common areas for use as sports fields, event space, or municipal purposes. 

The HOA Software Your Neighbors Deserve

If your HOA board is frustrated by your current use of technology, imagine how your neighbors feel. With the right HOA software, you can increase engagement, improve communications, simplify processes, and engage in transparent decision-making, all at a lower management expense (time and money). 

PayHOA helps HOA boards streamline every aspect of their neighborhood management, from mobile collection portals to neighborhood communication and transparent bookkeeping. 

With all of your financial and legal information in one place, you’ll worry less about compliance issues and feel more confident about your community’s future. 

See how PayHOA can help you.