After Hurricane Matthew, price of private living on the rise
Some private homeowners associations on Hilton Head are raising residents’ fees to recover costs from Hurricane Matthew, while other off-island, gated communities aren’t planning to do so — at least for now.
In the aftermath of the Oct. 8 hurricane, The Island Packet and The Beaufort Gazette surveyed managers of private communities north and south of the Broad River. The newspapers found that the storm severely depleted reserve funds in some private communities, and the responsibility to replenish those reserves likely will fall primarily on residents if little insurance or governmental aid is available.
“(It’s) fine when the sun is shining, but when there’s a major expense that’s not covered by insurance, the thing never told to the (private) unit owners is every single owner is responsible for the debts and liabilities of the (private) association,” said Evan McKenzie, a housing law expert and political science professor at the University of Illinois at Chicago.
Rising assessments
The Island Packet and The Beaufort Gazette has already reported on efforts by several Hilton Head Island communities to recoup hurricane-related costs:
▪ Annual assessment fees at Hilton Head Plantation will rise by $250 more than initially planned, according to a POA release sent to residents.
▪ Palmetto Dunes residents will face a $150 storm fee next year and likely for two more years, said Andrew Schumacher, CEO of the Palmetto Dunes POA.
▪ Sea Pines is imposing a one-time special assessment of $1,018 for improved lots and $607 for unimproved lots to recover an estimated $5.2 million in hurricane-related damage, officials there said.
The approximately 300 residents of the island’s Broad Creek Landing community face an even steeper price tag.
Nestled between Sea Pines and Broad Creek, Broad Creek Landing’s POA is assessing an additional approximately $2,500, depending on the size of the unit. The special fee will be paid in two payments, said Craig Fenstermaker, vice president of operations at IMC Resort Services, the managing agent of the complex.
The community suffered an estimated $737,000 in storm costs and used about $50,000 in reserves, Fenstermaker said.
Some Beaufort County communities are waiting on others who might foot a portion of their bills before deciding if additional assessments are necessary.
“Until we hear back from our insurance provider, we don’t know if there will be an assessment or increases,” Palmetto Bluff spokeswoman Courtney Hampson wrote in an email to the newspapers.
On Hilton Head Island, Windmill Harbour, Port Royal Plantation, Indigo Run and Long Cove Club are doing the same, general managers there said.
“(It will) most likely (be) a one-time assessment fee once we figure out reimbursement from insurance and the government,” said Don Baldwin, POA president of Windmill Harbour. “Then we will determine how much ... will be needed to replenish the storm fund.”
General managers at Shipyard Plantation on Hilton Head and Spring Island said the topic will be discussed early in 2017.
The consensus among surveyed gated communities outside Hilton Head Island was that reserve funds were sufficient to cover storm damages. General managers at Belfair Plantation, Berkeley Hall Club, Callawassie Island Club, Colleton River Plantation, Hampton Lake and Moss Creek Plantation said they did not expect to raise annual assessments or add fees to recoup hurricane-related costs.
General managers for Dataw Island, Hampton Hall, Palmetto Hall, Sun City, and Wexford Plantation each did not return three phone calls to the newspapers. Rose Hill general manager Jane Pritz said in an email she was too busy to answer questions.
While the financial status of Beaufort County’s private communities is relatively unknown, national research shows almost three-quarters of homeowners associations are underfunded.
The cost of gated life
More than two weeks after the Category 2 hurricane barreled through Beaufort County, the Federal Emergency Management Agency approved reimbursing for the cost of debris removal in private communities on Hilton Head Island and elsewhere in Beaufort County. But the exact time frames and amounts of those reimbursements are unknown.
Much of what government normally would handle before and after a hurricane is delegated to private communities, which are often under-equipped to handle such tasks, McKenzie said.
But almost all of Beaufort County’s gated communities contacted by the newspapers disagreed with that assessment. They pointed to well-executed disaster plans, dozens of email blasts sent to residents in real time, and contractors’ equipment staged days before the storm.
They shared stories of how many club members volunteered with cleanup tasks, how quickly golf courses and tennis courts were back up and running, and how swiftly security teams returned to their posts.
Left unsaid, however, was the financial impact Hurricane Matthew will have on residents of private communities in the coming years. Representatives of Palmetto Dunes and Hilton Head Plantation said, for example, assessments in their communities could be increased for several years beyond 2017.
Following a natural disaster, local residents might see an increase in property taxes, “but nothing like (the cost imposed on private) association members,” said McKenzie, who authored “Privatopia: Homeowner Associations and the Rise of Residential Private Government.”
To bypass the sluggish pace of the federal bureaucracy and address issues immediately after Hurricane Matthew, private communities in Beaufort County have had to shoulder much of the initial recovery costs.
“We pay the same amount of taxes as everyone else does, but we can’t take advantage of the FEMA policy for debris removal,” Dataw Island resident Susan Dickson said shortly after the storm.
Steve Riley, Hilton Head’s town manager, said he has grown accustomed to hearing that sentiment from residents of private communities.
His response: “You wanted your private roads; you wanted your internal security, and there’s a price to be paid for that.”
Kelly Meyerhofer: 843-706-8136, @KellyMeyerhofer
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This story was originally published December 4, 2016 at 6:00 AM with the headline "After Hurricane Matthew, price of private living on the rise."