Setting inflexible limit in changeable times
A million dollars just isn’t what it used to be. Time was, you could buy five or six homes in and around Ocean Pines for that kind of money, but now, according to February’s median sales prices as reported by the Coastal Association of Realtors, you might be able to swing three homes and a garden shed.
In addition, that median price is up 32 percent from the same time last year. The point here is not to show what’s happening in the housing market, but to illustrate how setting an arbitrary spending limit on the OPA Board of Directors is shortsighted.
As the current referendum asks association members whether to cap board spending on capital projects at a million, and to have property owners vote on anything beyond that, the question is how long will be it before that number has to be revised because of rising prices and inflation?
Currently, association bylaws allow the board to spend 20 percent of its income from annual charges on capital projects without seeking voter approval.
The factors contained in that formula might be subject to debate, but the approach itself makes more sense than erecting a financial bulkhead to protect the community from a rising tide of expense of unknown proportion.
According to the website Smart Asset, $1 million today would buy about $87,000 less than it would have five years ago. So, where in this referendum proposal is the flexibility to allow for what that $1 million will be worth in 2026?
The better answer, if association members want to pull back some of the board’s spending authority, would be to reduce the percentage of allowable spending from 20 percent to whatever seems more appropriate, or to attach an inflation multiplier to the spending level voters choose.
Otherwise, property owners and the board will have to endure referendum after referendum to keep pace with the changing, and more expensive, times.