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As golfing declines, are homeowners paying the price?

On Behalf of | Jan 18, 2019 | Firm News |

Younger generations do not have the same enthusiasm for golf as those before them. Millennials are not joining golf clubs at the same rate as their predecessors, which has created a growing problem for golf course residential communities and their HOAs.

The pace of growth is not keeping up with widespread course closures. In 2017 alone, over 200 golf courses closed and only 15 opened, according to the Wall Street Journal. When golf clubs close, what happens to the homes that surround them? The residential community is directly impacted when membership drops due to rising club fees and a decline in home values.

When the residential community and golf club are part of the same association, the home owners or property owners associations end up paying the price, because the golf club will begin to eat up the association’s budget. To compensate for this, the association will increase their fees. If the HOA or POA is separate from the golf club, then membership to the club may be mandatory. These fees can be a tough pill to swallow for non-golfing residents and potential property buyers alike.

Mandatory membership and declining property values

As golf club membership declined, many clubs began requiring home owners to purchase golf club memberships. Skyrocketing club fees were inflated to compensate for the loss of non-residential golfers; one homeowner’s fees were around $5,000 per year when she first moved in, and by 2016 had ballooned to $24,000. Homeowners unable to pay such fees face litigation and possible foreclosure from the golf clubs. Homeowner associations intertwined with the golf club have seen their operating budget eaten up, leaving little to no funds available to cover costs outside of the golf course.

In order to maintain property values and keep the golf course operating, tough choices will have to be made. Depending on the culture of the facility, the HOA board can make decisions based on their location and market to decide if they want to stick with an exclusive membership model, or open up the facilities to the public. Some clubs have specific sections of the club set aside for members only. Some clubs may build additional homes petition the county to rezone the parcels, reducing open space for owners nearby. A collaborative approach is needed to balance the needs of the community and help it remain viable in the future.