Plan of Attack!
Let’s be honest unless you have the fortitude of Chuck Norris it’s unlikely you’ll be able to handle a silent, invisible and never relenting opponent. The best way to win this battle is to not fight it at all. Accept that it’s not going anywhere so you might as well pull up an extra seat and figure out how you and inflation can work together to create a viable budgeting plan for your HOA community.
The simplest, fairest and most stable approach is to increase the allocation amount to the reserve account by an amount equal to the inflation rate thereby neutralizing this threat. This means increasing the reserve allocation rate by 3% per year which will likely require annual increases to the HOA dues as well. Now this is inflation’s second best weapon– the power of suggestion – suggesting it doesn’t exist, suggesting it’s taking a break, suggesting it may pass your community over – whatever the case is, this is when Boards and Community members decide that if they don’t talk about costs of common area component they just won’t happen – checkmate inflation.
So we’ve learned not to fight inflation but accept it into our lives, plan for it and make sure we don't ignore it. That’s how inflation is handled. Maybe we just need to come at this from a different frame of mind as well. You see inflation is not all bad… The same inflation that is causing the costs of construction to rise in your community is also causing your home values to increase at a pretty regular and steady pace for over 100 years (save for a few relatively short periods). Everyone loves increasing home prices so let’s take that enthusiasm and squash inflation's darker side.