California lawmakers are weighing a proposal that would sharply limit how much homeowners associations can raise monthly dues, a debate that is drawing attention across Southern California as homeowners face rising costs for mortgages, insurance, utilities and everyday expenses.
Senate Bill 1007 would reduce the current cap on annual HOA fee increases from 20% to 8% unless homeowners in the association vote to approve a larger hike. The measure, authored by Democratic Sen. Caroline Menjivar of Van Nuys, is one of several HOA-related bills moving through the Legislature this session as lawmakers look for ways to address housing affordability.
For many homeowners, HOA dues have become a growing financial burden. In San Diego County, Robert Henricks, a board member for his Rancho Bernardo homeowners association, said he reluctantly supported increasing monthly dues by $100, bringing them to $550.
“With the cost of living, the cost of projects, we’ve put off raising the monthly assessment two years out of three,” Henricks said.
Still, he acknowledged that homeowners across California are feeling squeezed as HOA fees rise alongside other major household costs.
Homeowners associations have become common in California’s housing market, especially in newer developments. Nationally, 67% of new single-family homes built in 2024 were part of HOAs, up from 46% in 2009, according to the U.S. Census Bureau. More than one-third of California residents live in HOA communities, including about 65% of homeowners.
California HOA fees are also among the highest in the country. The median monthly fee in the state is nearly $300, according to Census Bureau data. In some high-cost markets, including parts of the Bay Area and Los Angeles, dues can reach several thousand dollars a month.
HOAs collect assessments from residents to pay for shared expenses, including landscaping, pools, clubhouses, maintenance, repairs, insurance and reserves for major projects such as roofs or elevators. They are governed by boards elected by residents and also enforce community rules on issues such as exterior paint colors, landscaping and property use.
Menjivar has said her bill is intended to give homeowners more predictability about their monthly housing costs.
“This bill is about providing information to a homeowner to understand how much they’re gonna be paying,” Menjivar said during a March hearing.
Supporters, including consumer advocates and real estate groups, argue that the proposal could help low- and middle-income homeowners stay in their homes at a time when housing costs are consuming larger shares of household budgets. They point to cases such as a Walnut Creek condominium owner whose $1,500 monthly HOA dues, combined with insurance and property taxes, now exceed his mortgage payment.
Marjorie Murray, president of the Center for California Homeowner Association Law, told lawmakers that steep annual increases can quickly become unmanageable, especially for retirees and residents on fixed incomes.
“This is unsustainable. Even regular assessments raised by 20% will double in four years and triple in five,” Murray said. “Nobody’s salary or Social Security or retirement income goes up by those kinds of percentages.”
The debate comes as the Legislature has taken a broader interest in HOA oversight. A recently approved state law caps most HOA fines at $100 per violation. Another proposal, described as an “HOA transparency act,” would require more open meetings and records access, making associations operate more like local governments in some respects. A separate bill would require associations to set aside money in reserve accounts to help avoid large one-time assessments for major repairs, a concern particularly common in aging condominium complexes.
The California Association of Realtors supports Menjivar’s bill. Sanjay Wagle, a lobbyist for the group, said homeowners would still be able to approve increases above 8% when necessary, such as for serious repairs that protect property values.
“The realtors trust the homeowners. They’ll protect their investment,” Wagle said.
But the proposal has drawn concern from building groups and some lawmakers who say a lower cap could make it harder for HOAs to properly maintain properties. They warn that if associations cannot keep sufficient reserves, lenders may become more hesitant to finance homes in those communities, particularly condominiums.
The split was evident during a recent Senate vote, when six Democrats joined most Republicans in opposing the bill. The measure still advanced on a 24-13 vote, but the opposition was notable in a Legislature where members of the majority party often avoid casting direct votes against a colleague’s proposal.
Democratic Sen. Catherine Blakespear of Encinitas, who voted against the bill, said HOA boards are often responding to real cost pressures, including rising insurance and energy expenses.
“I don’t think the HOA board members are personally profiting or charging more than what they’re trying to do,” Blakespear said.
Henricks said he shares that concern. He lives with his wife and cat in an 88-unit condominium complex built in the 1970s, where major repairs are a looming issue. One of the largest anticipated expenses is modernizing all five elevators in the two-story building.
“That is the basic number one expense that we’re building our reserves to cover,” he said.
A lower cap, he said, could simply delay necessary work and force associations to pursue smaller, more frequent increases rather than larger adjustments spaced out over time.
For homeowners across Southern California and the Inland Empire, where HOA communities are common in newer subdivisions and condominium developments, the outcome of the bill could affect monthly budgets as well as the long-term maintenance of shared housing communities. The measure now continues through the legislative process as lawmakers weigh affordability concerns against the financial realities of maintaining HOA properties.
Original source: CalMatters
