After five decades as a teacher and school administrator, Janet Stone envisioned a comfortable retirement in her Florida condo overlooking the Atlantic coast.
Instead, she returned to teaching preschoolers with disabilities and living with her son in Las Vegas to pay $100,000 from the condominium association for part of a multimillion-dollar project to replace the deteriorating concrete of the 53-year-old building.
“I shouldn’t say this, but it’s so bad to work every day and I don’t have a penny and I have to think, ‘Can I buy groceries this week?'” she said. $400,000 in 2021. “Every penny I make goes to that particular restoration.”
After the Champlain Towers condominium collapse in 2021, which killed 98 people, dilapidated condominium buildings across Florida face rising costs and millions of dollars in structural repairs to meet new regulations. While the new building requirements are meant to prevent a similar tragedy, the costs are pushing some condominium owners over the financial edge and jeopardizing one of the last bastions of relatively affordable housing along Florida’s coast.
“We need to restore these buildings to the way they were, but for renters and those on fixed incomes, that means they’re going to have to find other housing,” said Florida House Representative Vicki Lopez, who helped craft the building. legislation and includes more than 600 condominium associations in the Miami area. “We already have an affordable housing crisis in Florida, so this perfect storm has come at a very difficult time.”
In Florida, as across the country, rising housing prices have become a major pressure point on household finances. Home prices are up in Florida 67% Since 2020, homeowners insurance has increased 42% in the past year. In the vast majority of Florida counties, a median income family cannot afford a median home. NBC News Home Buyers Index.
Older condominium buildings provided an alternative for those who could not afford a single-family home or were looking for a lower-maintenance alternative. The buildings are often home to retirees — some who have lived there for decades — single-income households and renters.
But now even living in those buildings is unaffordable for some. Under legislation passed by the Florida Legislature after the Champlain Towers collapse, apartment buildings that are three stories and more than 30 years old must undergo a structural inspection by the end of the year. This requirement applies to approximately 900,000 condos in the state. It also requires condominium associations to keep a minimum amount in their reserves to finance future repairs, requiring many buildings to raise their monthly association fees.
In Miami, residents at Palm Bay Yacht Club, where two-bedrooms are selling for between $400,000 and $500,000 this year, have to pay $140,000 each in special assessments for a number of building improvements. Owners of Surfside condos, where a two-bedroom in Daytona Beach is currently selling for $415,000, have paid between $50,000 and $60,000 to repair the concrete in their building and replace the windows. In Orlando, owners of Regency Gardens, where two-bedrooms sell for about $160,000, were told they would have to pay $22,000 each for building improvements, but residents recently removed the sign and are trying to lower the price tag.
Greg Batista, a professional engineer who has worked in Florida for more than 20 years, says that in the worst cases, residents are told to vacate their buildings due to structural deficiencies found during inspections.
He said he is currently working on a building in Miami Beach where residents may have to evacuate for safety reasons, and he recently worked on a 20-story condo building in Hollywood, Florida, where a three-story parking garage had to be evacuated. the structure can be repaired.
Stone bought a condo at the Surfside Club in Ormond Beach to be closer to her daughter and granddaughter. As a widow, she hoped that living in a condo would provide a greater sense of community, less maintenance and an added layer of security compared to a single-family home.
Within a year, he was informed that he owed a $100,000 special assessment to the condo association for concrete restoration, new windows and an increase in the association’s stock. Stone said he used most of his retirement savings for a down payment on a condo and didn’t have money for an appraisal. Condo owners who fail to pay the assessment can be foreclosed on by the condominium association.
He considered selling, but the appraisal lowered the value of the property in the building. A similar unit in Stone, which paid $400,000 in 2021, is currently listed for $335,000 after multiple price cuts.
According to him, his only option was to return to work. She re-applied to the school in Las Vegas where she worked before retiring and now teaches 3-5 year olds with autism.
“I’m tired every day,” Stone said. “I come home and go straight to sleep and get up and do it the next day.”
He said his entire salary went toward a condo appraisal, which he estimated would be paid after two years of full-time employment. After that, she plans to return to her apartment in Florida, but in the meantime, she lives with her grown son.
“It was supposed to be a time where I could really retire and be with my daughter and granddaughter and enjoy life,” Stone said. “It didn’t happen.”
Realtors say the rising cost of owning an apartment increases the number of apartments on the market and lowers prices. Across the state, the number of condos on the market rose 23% in the past six months, while prices fell 4.5%, according to NBC News’ analysis of Redfin data. In Volusia County, where Stone’s building is located, condo inventory rose 28% in the past six months and sales prices fell 9%.
“All the realtors talk about how long their listings have been sitting, how things aren’t moving and there aren’t enough buyers,” said Krista Goodrich, a Daytona Beach-area realtor who also handles vacation rentals. “Condos get hit the most because people who buy have seen what happens when hurricanes come, they’ve seen what happens when condos aren’t built right, and so they’re hesitant to buy a condo. on the beach.”
While some buildings need little or no work, Florida civil engineers, real estate lawyers and realtors say many are now paying the price for years of lax maintenance, substandard building standards from before the 1990s and the effects of Florida’s salt water on the concrete. and rebar that holds the structures together.
“When you put maintenance on the back burner and don’t do simple but very important things like painting the building, it’s very detrimental to the long-term life of the building,” Batista said. “But many people would rather have a nice rug in the foyer than deal with the real issues.”
For developers, pricing pressure on condo owners provides an opportunity, as many older properties favor prime oceanfront real estate. In some cases, the value of the land may be greater than the cost of bringing the building up to code. If enough owners are unable or unwilling to pay for the necessary repairs, developers may try to buy the land. property construction and remodeling.
“These properties are in very desirable locations. If you build a new development on them, in many cases luxury condos, it can cost $3,000 to $5,000 per square foot,” said Joseph Hernandez. “This is a huge growth opportunity.”
Edgardo Defortuna, a developer whose Fortune International Group company develops some of South Florida’s most high-profile luxury buildings, said his firm is eyeing several older condominium buildings in prime waterfront locations in Miami Beach and downtown Miami that could be torn down and replaced with luxury buildings. tall buildings. But he said it may be difficult to convince enough owners to sell even at above-market prices.
“I think a lot of people still haven’t really faced the music or realized that it’s better to sell than to finance the really big upgrades and supplies that you need to stay compliant,” Defortuna said.
Jeremy Maurice, president of the board of condos at Stone’s when the renovations were approved, said the board felt it had no choice but to fund the renovations, adding that the costs were due to decades of lack of proper maintenance on the building’s concrete.
“If you don’t do anything, this building is going to depreciate and you’re going to have to sell it to a developer and it’s going to be torn down,” said Maurice, who said he had to tap into some of his retirement savings. pay for work. “So there’s really no choice. You have to do the work. And that’s a tough pill to swallow. I don’t think anyone is jumping for joy. But this happens when the previous councils do not do their work.”
But the decision pitted building owners against each other, with some owners saying the case was unnecessary.
“It was extremely toxic. That’s an understatement,” Maurice said. “I’m not talking to some people there today. I will be polite, but I will not talk to them again because they treated me so badly. They insulted me in meetings, sent anonymous letters, just disgusting, disgusting things.”
Condo owners at the Palm Bay Yacht Club have been told they will have to pay for a $33 million construction project, which has appealed to a group of residents. sue the condominium managementbuilding management company and firms hired to complete the work. The lawsuit alleges that the company overcharged the owners for the project, citing inflated dimensions and out-of-scope items such as cosmetic and landscaping repairs. He also alleges that the condo association previously mismanaged funds.
Steve Davis, an attorney representing the defendants, denied the allegations and said the work was legally required under the 40-year recertification required for buildings in Miami-Dade County, and the owners were only charged for necessary work done. He said the Palm Bay board is doing everything it can to help unit owners.
Among the plaintiffs is Cristian Murray, who bought his condo in 2016 and recently retired after 20 years as a health administrator at the University of Miami. Now he plans to go back to work to pay off the $140,000 special assessment.
To make the payment, he took out a 20-year loan in which he paid $1,000 a month on top of the $3,000 a month he owed in mortgage and other condo association fees.
“Pardon my language, but we’re screwed,” Murray said. “These guys ruined my early retirement plan.”
Lopez, who helped draft the legislation, said she is looking for ways to help homeowners after the Florida Legislature reconvenes next year. He said he is gathering information to understand the full impact of the legislation to determine what adjustments may be needed.
Stone wants the state Legislature to give buildings and condo owners more time to comply with the rules so they can spread the costs. While he thinks the requirements will be a good thing in the long run, he doesn’t think he’ll be able to recoup the money he had to spend on his condo.
“I’m going to be there until I die because I’m not going to get that money back before I die,” he said. “If I could get my money back, I would probably look at selling and buying a single-family home again. But I don’t see that happening in my lifetime.”