By Jenn Davis | September 30, 2026
When buyers compare San Francisco condos, monthly HOA dues are often one of the first numbers they check. That makes sense. Dues affect the monthly budget and how comfortable someone feels about the purchase.
But the number alone tells only part of the story. I encourage my clients to understand what the building will need over the next several years and how the HOA plans to pay for it. That context helps them decide whether the monthly dues represent good value.
The San Francisco Business Times recently covered AB 2050 and HOA funding, including my perspective on how these costs influence buyers’ decisions. My point is straightforward: low dues deserve a closer look if the building is not saving enough for the work ahead.
What AB 2050 changes
Governor Gavin Newsom signed AB 2050, which addresses reserve funding for California homeowners associations. Its new reserve-funding requirements become operative on January 1, 2032.
The law calls for reserve studies to identify the minimum annual contribution needed to prevent the projected reserve balance from falling below zero over the following 30 years. Associations must fund reserves at least at that minimum contribution level. If the projection shows a negative balance, the law requires an annual transfer of at least 15 percent of the gross annual budget into reserves until that projected shortfall is resolved. Under specified conditions, a reserve-funding special assessment is also required, subject to assessment limits and voting provisions.
That does not mean every HOA will increase dues immediately or by the same amount. My expectation is that the effect will depend on each building’s existing savings, anticipated repairs, and funding plan.
Sources: Governor’s signing announcement and AB 2050 legislative text.
Look beyond the monthly dues
As I put it when discussing this topic:
“AB 2050 changes the question buyers should be asking. What matters is when the big repairs, like the roof, plumbing and elevators, will come due and whether the building is saving for them, so buyers should ask for the 30-year reserve projection.”
An HOA’s operating budget pays for ongoing expenses such as insurance, common-area utilities, and routine services. Reserves are the savings set aside for major repairs and replacements that are the association’s responsibility.
A building’s reserve balance should be considered alongside its upcoming projects. A savings figure means much more when you know whether a roof replacement is approaching, an elevator needs substantial work, or several expensive components are expected to come due close together.
One question worth asking is whether the HOA is making the contributions recommended in its funding plan. Having a study and following its recommendations are two separate questions.
How HOA costs influence buyers
I had a client fall for an edgy, urban condo, then walk away when he saw that dues had climbed to rebuild reserves after a special assessment. The property appealed to him, but the ongoing expense changed his decision.
Another client will not schedule a showing until he has seen the reserves and dues. He comes to San Francisco for work, and if the carrying costs are too high, staying in a hotel makes more financial sense for him.
These experiences inform the advice I give my clients: consider the full cost of ownership before becoming too attached to a property. A beautiful home still has to fit the way you live and the amount you are comfortable spending each month.
Higher dues can give buyers pause. Before ruling out a property, it helps to understand what those dues cover, how much is going toward reserves, and whether additional contributions are anticipated. Those answers provide a clearer basis for deciding whether the property fits your budget.
Questions to ask before buying a San Francisco condo
Before making a purchase, use the HOA disclosures to answer these questions:
- What major repairs are expected in the next five years? Look at the timing and estimated costs for components such as the roof, plumbing, elevators, and exterior surfaces.
- What does the long-term reserve projection show? Ask for the latest study and funding plan, including any available 30-year cash-flow projection.
- Is the HOA following that plan? Compare recommended reserve contributions with the adopted budget and actual contributions.
- Are dues increases or special assessments being discussed? Read the meeting minutes and request written clarification from the HOA.
- Have recent projects depleted reserves? A completed repair may be reassuring, but we should also understand how the association plans to rebuild its savings.
- Are the repair estimates current? Ask whether significant upcoming work has recent contractor estimates or supporting inspections.
A projected replacement date is a planning estimate. Ask whether it is supported by recent inspections and what the HOA has actually decided to do. The distinction helps you understand which expenses are anticipated and which projects are already moving forward.
Understanding the cost of the home you are buying
My view is that AB 2050 brings more attention to a tradeoff buyers already face: contributing steadily toward future work or facing a larger bill when the work can no longer wait.
The key is to evaluate the expenses, reserves, and repair plans together. Higher dues are not automatically a sign of a well-managed building, and lower dues are not automatically a problem. The question is whether the HOA has a realistic plan for meeting its obligations and whether those costs fit your budget.
If you are considering a condo in San Francisco, I would be happy to help you work through the disclosures, identify the questions worth asking, and understand how the building’s finances fit your plans. The goal is to feel comfortable with both the home and the responsibilities that come with owning it.
Jenn Davis
