California Nears 55,000 Associations in 2020

Approximately 700 new homeowners associations were added to the state of California year over year, according to the latest data tracked by Levy, Erlanger & Company. That represents approximately a 1.3 percent increase.

Homeowners associations account for nearly $14 billion in annual revenues in the state.

Levy, Erlanger & Company has been compiling its annual statistics book for the past 12 or so years, though the firm began tracking the number of homeowners associations in California longer than that. David Levy, founding partner in the firm, said he’s been building its database since the mid 1980s.

While California has north of 50,000 homeowners associations -- 54,782 to be exact as of September 2020 -- Levy reports that about half of those are self-managed or on-site managed.

“Most of [the self-managed] are smaller. The statistics show that the majority are under 25 units in size,” he said. “Most management companies don’t want to deal with smaller associations.”

Levy obtains his data from a wide variety of sources including the California Department of Real Estate, California Secretary of State, the Internet and a number of other industry sources. Twice a year, Levy pulls the data for Mutual Benefit Nonprofit Corporations, and sorts through the data to pull out those that are homeowner associations. Then through extensive research and data mining online, fills in details for these corporations and unincorporated associations including the number of units at buildout, finances, board members and many other items.

The number of homeowner associations have continued to grow in California, though overall growth is small at just over 1 percent per annum.

“I suspect one reason there isn’t a huge change from year to year is that larger multiphase projects are continuing to be built,” he said. “One thing I can say is our statistics are pretty accurate. The way we accumulate information has been pretty consistent over the last 12 years.”

One trend Levy is keeping an eye on is the move from cities to suburbs and how that could impact development in urban centers.

“In urban areas like San Francisco, downtown San Diego and Los Angeles, there will always be infill projects, however, I’m not so sure that will continue,” he said. “In the San Francisco market the number of condo units on the market for sale has tripled in the past year because of COVID. People are leaving the city and that’s a trend that may continue for a while.”

By contrast, Levy said house sales in suburban markets are hitting new records as people leave condos in the city and move to planned unit developments in the suburbs.

“Maybe by next September I would expect to see more planned developments than condos,” he said. “The statistics to back it up probably won’t be known for a while. Nobody knows the impact the pandemic will have longer term.”

Data in Levy’s report this year shows condos, condo conversions and co-ops make up two-thirds of total associations in the state with planned unit developments (single family homes) making up the other third.

The growth of associations in the northern versus southern part of the state is about the same, however the concentration of associations is higher in the south with SoCal accounting for 66 percent of the total, compared to 34 percent in Northern California.

The counties seeing bigger growth in associations include Alameda, Riverside, San Bernardino, San Francisco, San Mateo and Ventura. Other counties seeing HOA growth are Contra Costa, Los Angeles, Orange, Sacramento, San Diego and Santa Clara.