The cost of condo
living is on the rise, partly because many South Florida
condo associations are scrambling to meet new state
requirements passed after part of the Champlain Towers South
building collapsed in Surfside.
"It's on the
equivalent of Hurricane Andrew in 1992," said Peter Zalewski,
who runs the condo data and analytics website Condo
Vultures.
Zalewski said the tragedy was a tipping point.
"Up until the collapse of the tower and the following
legislation, many associations opted to simply kick the can
down the road, not pay for what was necessary, not put money
in reserves," Zalewski said. "Now, the legislation is
forcing money to go into reserves and forcing money to be
spent on what it should have been spent on a long time ago,
so there's a real catch up that's occurring."
He looked at the cost of monthly maintenance fees per square
foot for three randomly selected buildings along the South
Florida coast: one in Surfside, one in Miami Beach and one
in downtown Miami. |
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"If you look from 2020
to 2022, you're going to see a double-digit increase, as
high as 80%," he said. "The reason why it's gone up is
primarily insurance costs."
"The Surfside tragedy has led to a very tight condo
insurance market, especially for master condo associations,"
said Mark Friedlander of the Insurance Information
Institute.
Friedlander said there are fewer companies writing policies
for condo associations now, compared to two years ago. He
also said many associations are having to buy policies from
more than one insurer in order to get full coverage for
their structure.
"Based on the trends we are seeing, master condo
associations now are paying two to five times the rate for
coverage that they were paying two years ago before the
Surfside tragedy," Friedlander said.
Those higher insurance costs, coupled with the added
expenses related to condo reform are fueling the cost of
living in a condo for now.
"There's a deadline that's been imposed by the state
legislature and this is what everybody is dealing with,"
Zalewski said. "Five, ten years from now it will all be
under control but right now there's a surge ... As a result
of that, costs are going to go up. Special assessments are
definitely coming."
If you live in a condo building in Miami-Dade County and you
are facing a special assessment associated with repairs due
to recertification, you may qualify for help. The
Condominium Special Assessment program offers certain condo
owners who meet income requirements a 0% interest loan of up
to $50,000 to help cover those costs. A spokesperson told
NBC6 Responds the county has already committed $2.8 million
to 132 households, with an average loan amount of just under
$21,000.
The spokesperson said there are still plenty of funds
available.