"This is budgeting the actual cost of ownership." Robert DeNichilo of the Community Associations Institute said that to the San Francisco Chronicle in September about Assembly Bill 2050, a California reserve-funding bill his organization led. The CalMatters bill page records that it was chaptered on September 29, 2026, as Chapter 796, Statutes of 2026. For anyone buying or selling in a South Beach or Rincon Hill tower, it is the second of two reserve rules in one year that move the building's budget into the middle of the deal. The first comes from Fannie Mae, and its main deadline is about three months away.
Both rules work on the same number: the monthly dues printed on every tower listing. That number already shapes how these condos sell. Over the coming year, it will matter even more.
South Beach sells at asking because of the dues, not the views
Citywide, the gap between houses and condos looks huge. In the six months through August 21, 2026, MLS data showed San Francisco single-family homes selling at a median 22.5% over asking and condos at 1.3% over, across 1,276 houses and 1,375 condos.
Sort those same condo sales by monthly HOA dues and the picture gets much sharper. In that window, 59.9% of condos with dues under $500 sold for at least 10% over asking. That figure was 26.0% for dues between $500 and $1,000 and 11.1% above $1,000. In the over-$1,000 group, the most common result was a sale below asking, at 39.9% of closings, with a median of 19 days on market.
South Beach sits right in that high-dues group. Over the same six months, South Beach and Mission Bay condos sold at a median of right at asking, while Yerba Buena, Downtown and SoMa sold below. South Beach alone logged 168 condo sales, as many as the five strongest condo neighborhoods put together. Building age follows the same pattern. Pre-1940 condos sold at a median 10.7% over asking, while buildings from 2015 or later sold at asking.
The reason is a budget problem. HOA dues come out of the same monthly payment as the mortgage, and lenders count them the same way when they decide what a buyer qualifies for. A flat in an old Victorian with no elevator or lobby has almost no dues. A newer tower has dues that last for the life of the loan. Every $1,000 in monthly dues takes $12,000 a year out of what a buyer can put toward the loan. That leaves fewer buyers who can bid, and bidding wars need a lot of bidders.
This is a pattern in the data, not proof of cause. The same analysis found that price per square foot in high-dues buildings comes out close to the low-dues group. So the dues seem to show up in how competitive the sale is, more than in the final price.
What the monthly line looks like, tower by tower
Dues are set per unit, usually by size, so a building doesn't have one rate. Recent MLS listing records from 2026 show the range a buyer will see in South Beach, Rincon Hill and the nearby towers:
| Building | Unit or range | Monthly HOA dues | Record status |
|---|---|---|---|
| Lumina | #14H, 851 sq. ft. one-bedroom | $1,350 | Sold April 2026 |
| The Infinity | #3A | $1,379 | Sold May 2026 |
| One Rincon Hill | 2026 listings | roughly $1,200 to $1,585 | Listings in 2026 |
| One Rincon Hill | #3201 | $1,563 | Updated September 2026 |
| Watermark | #15H | $1,532 | Updated September 2026 |
| The Brannan | #5H | $1,704 | Updated September 2026 |
| Millennium Tower | #5C, 833 sq. ft. | $2,115 | Updated September 2026 |
| The Avery | #4406 and #4905 | $2,274 and $2,463 | Updated September 2026 |
| 181 Fremont | #54-B, 490 sq. ft. one-bedroom | $3,532 | Updated July 2026 |
Nearly every one of these sits above the $1,000 line where double-digit overbids became uncommon. The dues also cover more than many buyers expect. The Infinity #3A's listing says its fee includes common-area insurance, reserves, gas, water and sewer, and the pool. So a fair comparison is a similar-size unit in another building, with a list of what each fee covers.
Two reserve rules, two dates
The dues line is also starting to move, and the reserve fund is a big reason why. The Chronicle reported in September that dues have risen along with insurance and maintenance costs. It also reported that Fannie Mae has flagged some condo buildings for low reserves or maintenance problems, and that many lenders won't lend in those buildings, leaving buyers to pay cash.
Fannie Mae's Lender Letter LL-2026-03, issued March 18, 2026, makes two changes with dates attached.
- Reserve studies, required for loan applications dated on or after August 3, 2026. If a building's budget doesn't meet Fannie's reserve standard and the lender relies on a reserve study instead, the lender must confirm the budget includes the study's highest recommended reserve contribution. The "baseline funding" method, which lets the reserve balance get close to zero without going below it, is no longer allowed.
- The 15% floor, for loan applications dated on or after January 4, 2027. When a lender runs Fannie's Full Review of a building, the required reserve contribution for capital projects and deferred maintenance rises from 10% to 15% of the annual budgeted assessment income.
AB 2050 has a later start date and is stricter. Beginning January 1, 2032, every California association's reserve study must calculate the minimum contribution needed to keep the reserve balance above zero for the next 30 years, and the association must fund at least that much each year. If the balance is projected to fall below zero at any point, the association must move 15% of its gross annual budget into reserves each year. If the budget can't cover that, it must levy a special assessment to fund the reserve.
A board doesn't have to wait until 2032 to raise dues. The San Francisco Chronicle reports that, under current law, a California HOA can raise regular dues by up to 20% per fiscal year and levy special assessments totaling up to 5% of the expense budget without a member vote. On a $1,563 monthly fee like One Rincon Hill #3201's, a 20% increase would add about $313 a month. A board that sees both deadlines coming could decide to start earlier.
How much this pushes dues up is still unknown. The Chronicle reported that Nathan Godin, a doctoral student at UC Berkeley's Haas School of Business, found Florida's 2022 reserve law raised HOA fees and lowered prices in affected buildings. He also said California already requires a reserve review every three years, so many associations here may already include future repairs in their dues.
Why a funded reserve helps a tower seller
For a seller, the new rules are not all bad news. A building that already meets Fannie's standard can keep financed buyers in the pool, and a fully funded reserve makes a surprise special assessment less likely. Godin described regular monthly funding as better practice than leaving future owners with a special assessment.
The sales data also shows high dues don't fix the outcome in advance. Lumina #14H carried $1,350 in monthly dues and still closed 1.1% over asking in April 2026. At One Rincon Hill, seven closings in the first half of 2026 broke down as four below list, two at list and one above. Within the same price band and the same dues bracket, results still vary. A well-presented unit in a building with a clean reserve file is the kind of listing that can beat its bracket.
Nothing here suggests any of the towers named above has a special assessment or a lending flag, and none should be assumed. Fannie's list is confidential. In June 2025, the SF Standard reported that the Mira was on it, which shows a building's status usually comes out through reporting or a lender's review.
The packet to read before the price
In a South Beach tower, the HOA documents now answer two questions a buyer used to put off until after acceptance: whether the loan will close, and whether the monthly cost is likely to rise. Before you write an offer, ask for these:
- The current reserve study. Look at the recommended annual contribution and how it compares with what the budget actually puts aside.
- The annual budget report. California associations send this out, and it includes a summary of the reserve accounts. Divide the reserve line by total assessment income and compare the result with 15%.
- Recent board minutes. Look for talk of dues increases, insurance renewals or assessments.
- A lender check on the building. Ask early whether the building qualifies for the loan type you plan to use, especially if your application will be dated on or after January 4, 2027.
- Dues for comparable units. Compare similar-size units across the towers you're considering, along with what each fee covers.
None of this is legal or financial advice. Your lender, and an attorney if you need one, make the final call on a specific building.
A few common questions
Does AB 2050 raise my dues right away? The funding requirement starts January 1, 2032. Boards can still raise dues sooner, within the existing 20% annual limit that doesn't need a vote.
If a building misses Fannie's 15% standard, does that block all financing? The 15% requirement applies when a lender runs Fannie's Full Review on applications dated on or after January 4, 2027. According to the Chronicle, buyers in buildings that don't meet Fannie's standards can struggle to get a mortgage, so check the specific building with your lender early.
Do high dues mean a lower price per square foot? In the six months through August 21, 2026, MLS data didn't clearly show that. Price per square foot in high-dues buildings came out close to the low-dues group. The dues showed up mostly in how many buyers bid and how long units took to sell.
If you're weighing a tower unit in South Beach or Rincon Hill, or getting one ready to sell before January 4, Sasha can go through the reserve study, budget and comparable-unit dues with you before a price goes on paper. Selling San Francisco works with condo buyers and sellers across central San Francisco. Let's Connect.
