Homeowners worry about skyrocketing fees under new property
management
Gilroy – A nonprofit housing provider’s effort to shed part of its services has homeowners in a low-income neighborhood worried about exorbitant new fees.
South County Property Management Company has informed 14 families on Casciano Circle that it will stop serving as property manager for the north Gilroy neighborhood by the end of August. The agency has handled daily headaches such as parking violations and pot-holes for neighbors since 2003, when the homes were constructed by its nonprofit sister organization, South County Housing.
South County Property Management has hired a new management company to help the Casciano Homeowners Association choose a new manager, but residents are worried that monthly fees could skyrocket under a for-profit firm. Each resident in the HOA currently pays $46 a month to South County to maintain the private road and street lights.
“Some of these property managers are asking $200 or $300 per household,” said HOA President Fabian Cuevas. “Everybody on our street is concerned … because it might hurt them in the pocketbook.”
South County representatives expressed doubt that fees would increase significantly under a for-profit provider. HOA fees vary depending on the community. Neighborhoods with a large amount of green space, pools and other common areas tend to have higher fees compared to streets like Casciano Circle, where homeowners pay only for street and light maintenance.
“I would imagine, because I know what we’re charging is not covering our costs, that their price is probably going to go up,” said Laura Ellenberger, director of property management for South County Property Management. “But I can’t see it going up double or three times the amount.”
She stressed that the agency is not ending its service because costs exceed returns from the HOA. The move represents a broader effort by the agency to focus on management of its 1,246 rental properties.
“We’ve added 500 units almost in the last year of multi-family rental, but our staff hasn’t increased that much,” Ellenberger said. “Our concentration is on rental housing. That’s what we’re good at. That’s what we do. The result will be that homeowners will have much better service, and we’ll be doing what we do best.”
South County is also ending property management contracts with the 46-unit Glenbrook development in Gilroy and two properties in Salinas and Watsonville. South County representatives said that development agreements with the HOAs allow either side to end the relationship by giving 30 days notice. South County officials began informally warning residents about their plans six months ago.
Cuevas and other HOA members are now scrambling to explore their options. They hope to hold a meeting this week with South County officials and a representative from Community Management Services, the Campbell company hired to help residents transition to a private property manager. The company has offered its own services as an option. Representatives were not available for comment Friday, but the company’s brochures list a variety of services ranging from basic book-keeping for HOA fees to handling parking enforcement or street repairs. The cheapest program would cost each homeowner $24 a month and would not include any of the current maintenance services.
Cuevas and fellow HOA member Richard Saccullo said they would rather dissolve the HOA than face even $20 more in fees.
“It’s a lot of money for someone who has a family of kids and wants a gallon of milk,” Saccullo said.
It remains unclear if Casciano Circle residents could eliminate the HOA. Local governments typically finance street repairs, parking enforcement and other public services, though in recent years public officials have agreed to shift those responsibilities to HOAs. Gilroy housing officials could not confirm by press time if state laws require HOAs to provide basic services once the city steps out of the picture.
As Casciano Circle residents set out for answers, South County officials say they have no plans to leave the neighborhood “high and dry.”
“Managing the homeowners association in the first year or two gives us an ability to maintain a relationship with the homeowners, in case any issues arise,” said Andy Lief, project manager for South County Housing. “We have a neighborhood development department that would continue to do that regardless of our management company managing the HOA.”
