New Money for Aging Amenities
Saturday, May 20, 2006
When Lake Ridge in Prince William County and Reston in Fairfax County were built in the 1960s, they were among the first and largest planned communities in the nation.
Lake Ridge, west of Interstate 95 near the Occoquan River, eventually grew to 30,000 residents, while Reston has almost twice that many. They were pioneers in what is now considered the norm for amenities in such large-scale communities: town and community centers, tennis and basketball courts, swimming pools, walking trails and tot lots.
But both communities are learning the hard way that those aging amenities cost more money to maintain than anticipated. Reston's leaders have found out they need to spend $21 million during the next 30 years to replace facilities. Lake Ridge raises just $115,000 a year in homeowner fees to spend on capital improvements, but repairing a pool can cost $100,000.
And so Lake Ridge and Reston have become pioneers once again, this time imposing fees on new homeowners to help offset the cost of maintaining the amenities. Lake Ridge recently began charging new homeowners a one-time $500 fee, and Reston residents recently approved a $250 fee for people who buy new homes there.
Although the fees are a first in the Washington area, they are common in other maturing planned developments across the country. Analysts predict that the trend could catch on, despite opposition from real estate agents who say they don't like tacking on another charge for their clients.
"The older the communities get, the more cash they need," said John Rhodes, executive vice president of Legum and Norman, a residential management company. "I was not aware of communities charging these fees before. Now, I know of two or three [other] places that are thinking about it."
Although still nice places to live, some of the older communities have become like an aging strip mall that seems outshined by a new shopping plaza down the street. Many older communities are low on funds to keep up and replace their pools, centers and trails. That's because previous boards of directors tried to keep homeowner fees low or were prevented from increasing fees by the group's bylaws, said Peter B. Miller, a principal of Miller Dodson Associates, an Annapolis-based firm that does reserve studies for Reston. Developers also kept fees low to encourage sales, he said.
"It was well-intentioned but misguided," said Miller, who is also a past president of the Community Associations Institute, a national group for homeowners associations based in Alexandria.
Local real estate agents say they are not enthused about the fees because new home buyers are already strapped by high sales prices and closing costs, said John DiBiase, director of government affairs for the Prince William Association of Realtors. "There are some significant questions about its enforceability and fairness," he said. "This is an existing community imposing this fee on new purchasers."
Del. Michele B. McQuigg (R-Prince William) said she considered legislation that would have prohibited such fees but found that the associations do hold the authority to charge new home buyers.
Supporters said the fee is not that high. Communities such as Reston and Lake Ridge have homeowners associations that are supported through annual dues paid by residents. Those dues are the main source of revenue for financing operations and maintenance of facilities and programs.
Robert E. Simon Jr., Reston's founder, said home buyers would not be hurt by the fee.
"It's a nice little source of revenue, painless to everybody. If you're buying a house for $400,000, what's $250?" he said.
In addition to approving the one-time fee, Reston residents also voted last month to allow the homeowners association to raise the cap on annual dues, which will make it easier for officials to generate more money for upkeep.
Thomas Freeley, general manager of Lake Ridge, defended the fees as the easiest way to raise revenue for badly needed capital improvements to facilities that have aged or are more expensive to maintain.
Graffiti can be spotted occasionally on sheds and fences across Lake Ridge. The forest-green upholstery with tiny maroon designs on the chairs in Lake Ridge's Tall Oaks Community Center is stained. Outside the community center, the pool has cracks, and the poles supporting the diving boards and lifeguard chairs are rusted.
"The amenities we have are simply outdated," Freeley said.
When the Lake Ridge association was created, the group required only users to pay to maintain the pools, later expanded to include every homeowner when funds got low in the 1980s. The homeowners association also limited increases in annual dues to 5 percent a year, said Michael Dakes, president of the Lake Ridge Parks and Recreation Association, the homeowners group. "That has been a hindrance," he said. "The cost of living exceeded this increase."
At the time Lake Ridge was developed, there were no proffers, the voluntary fees developers pay to support such county services as fire stations, libraries and schools. But Ken Thompson, an original developer of Lake Ridge, said the developers tried to be responsible, donating open space and land for schools and a library.
Though the donations were generous, the open space -- trees and trails and the picturesque Occoquan Reservoir -- that still makes Lake Ridge desirable was more upkeep than people thought, resident Linda McCabe said.
McCabe said building the homes helped cause some of the erosion that the development is now struggling to combat.
As for the pools, tennis courts and other infrastructure, the homeowners association's maintenance plan was flawed for several years. "It appeared to me that they were doing patchwork," she said.
Jim Caddigan, 69, the first president of the homeowners association, said his family lived in Lake Ridge from 1969 to 1974. The Caddigans were the ninth family in the development, which had just 200 families when they left in 1974. Although the group came up with a maintenance plan for the one pool that existed, "our vision was shortsighted," he said. "I don't think any of us envisioned Lake Ridge to be as big as it is."
The problem is maintaining Lake Ridge, McCabe said. "We're 33, 34 years old now. During that time, plans were neglected. Now, we're, like, 'Wait a minute, we've got to catch up,' " she said.