In 2022, all we heard in the news is the word inflation. What is inflation? For our discussion, the definition is as follows. Simply stated, it is the rate of increase of goods and services over a period of time. We hear percentages stated like 6% to 9% over last year. This is stating in simple terms that if something cost 1 dollar last year, now it cost $1.06 to $1.09 this year. We are at the highest rate of inflation right now since 1980. Those of us on Social Security fixed income have circled October 13 on our calendars. That is the date the government releases what our cost of living increase will be. This number will be just to keep pace with the increases that we are all facing in our daily lives.
How did we get here? Simply put, there are too many dollars chasing fewer goods and services. The pandemic pumped stimulus money into the economy. Because of lockdowns, many consumers stayed home and did not spend money. Oil prices went up because of geopolitical activity. Oil is the driver of many goods, not just our vehicles, in our daily lives. The labor shortage has contributed to employers having to adjust to compete for available talent to provide goods and services to their customers. The Fed is now trying to reign in this inflation.
For too long, especially during the pandemic, interest rates were very low. This essentially was very enticing to borrow and spend a lot of money chasing those goods and services. Remember, during the pandemic, alot of industry was closed thus creating supply shortages This also drives up costs. Supply and demand. By raising interest rates, the Fed is making it harder to borrow money, thus taking funds out of the economy and helping supply catch up to demand.
What does it all mean to us? Garden Patio Villas community is also not immune to inflation. The costs of goods and services to our Association has also gone up this past year to unprecedented levels. Insurance went up 63% over last year. Lawn maintenance has gone up 15%. Chlorine for the pool has had a significant increase.
In order to cover these and other expenses and utilities there will have to be an increase to the quarterly HOA fees charged to each Member of Garden Patio Villas. This cost increase is required to maintain the standards of the community. The Board has a responsibility to maintain a community that we can all be proud of to call home.