As the complexities associated with governing homeowners associations continue to grow, boards of associations are quickly learning that taking time to plan two to five years in advance is an excellent investment of time and resources. Planning now for the future can set your association on the right course, save your association time, money and even prevent significant problems from developing.
There are a variety of methods associations can utilize for strategic planning – such as hiring a facilitator to assist in the planning process, creating a mission statement, or conducting a SWOT analysis to obtain the information needed to anticipate issues and make important decisions. This article will focus on the use of SWOT analysis as a tool for planning.
The purpose of a SWOT analysis is for boards to analyze the internal Strengths and Weaknesses of their associations and the external Opportunities and Threats that could affect their associations. Once the Strengths, Weaknesses, Opportunities and Threats are identified, associations are equipped with the data needed to create an overall plan to address and leverage these variables when appropriate and to budget accordingly.
Here is an example of a SWOT analysis for the fictional Happy Hollows Homeowners Association:
Strengths: The internal strengths of Happy Hollows are:
- Solid and knowledgeable base of volunteer leaders
- A new group of homeowners want to be involved
- Outstanding amenities that create value and draw new homeowners
- Aesthetic appeal of the community is pleasing
Weaknesses: The internal weaknesses of Happy Hollows are:
- The reserves have not been funded on a regular basis and the private streets need to be resurfaced in 3 years
- There has been a 10% reduction in assessments that are being collected
- There has been an increase in the number of units being rented and some renters are not complying with the covenants
- Residents are voicing their dissatisfaction with the board’s enforcement of certain rules
- Outstanding tax incentives are available to install solar panels and windmills to generate energy without the use of fossil fuels
- The municipality is offering attractive incentives for Happy Hollows to xeriscape
- A neighboring association has approached Happy Hollows to discuss an arrangement to allow use of the amenities at Happy Hollows
- The housing market continues to be problematic and foreclosures are expected to increase by 5 % over the next 2 years
- Over the next 2 years, there is expected to be a 3% increase in job losses and wages are not expected to increase at a level consistent with the cost of living
Now that the board of Happy Hollows has completed the SWOT analysis and has a good understanding of the environment the association is operating in, the board has the information it needs to analyze the priorities of the association for the next 2-5 years and to create an action plan to ensure the goals identified are carried out. While addressing some of the obvious issues facing the association can be difficult, the board and association will be well-served by dealing with these issues upfront and making solid decisions for the future.
If your association is interested in learning more about the facilitation services Altitude Community Law offers associations for strategic planning, please email [email protected]