The rising costs of homeowners association (HOA) fees and home insurance is weighing so heavily on the Sunshine State’s retirees that many risk becoming homeless, a South Florida realtor has told Newsweek.
Condo HOA fees have jumped by 60 percent in the region since 2019, as reported by the Miami Herald, in part due to new regulations passed in May 2022 following the tragic collapse of a condo in Surfside and also because of the rising cost of insurance in the state.
In Miami-Dade County, median monthly condo association fees were $900 between April and June this year, up by over 59 percent from the $567 fee reported in the same time frame in 2019, according to Redfin data provided exclusively to the local newspaper. From the second quarter of 2023 alone, when they were $820 a month, fees had climbed by 10 percent.
Photo-illustration by Newsweek/Getty
Add skyrocketing home insurance premiums—which have risen in recent years due to a combination of excessive litigation, widespread fraud, and the growing risk of natural disasters in the state—repairs bills, and monthly mortgage costs and you have a recipe for financial disaster for many residents.
Mario D. Copelenko, a South Florida realtor, told Newsweek that he is “heartbroken to see what the uncontrolled HOAs and insurance companies are doing to the owners of units and homes.”
According to Copelenko, HOAs have been “raising their dues by large percentages, claiming that the new law on structures and the rising cost of insurance policies make it necessary to take these measures.”
As a result of this surge, “homeowners are devastated by increases that reach up to 80 percent,” he said.
Copelenko said that he has seen first-hand the challenges faced by the retirees in the state, “who are living on a fixed income and are struggling to juggle their budgets.”
His concerns are reflected by a recent Bankrate report which found that Florida is no longer a retirement haven for American seniors due to the high cost of housing—including rising HOAs and insurance premiums.
“Ten years ago, Florida would’ve been a no-brainer for retirement. But with skyrocketing home prices, property taxes and homeowners insurance, it’s worth taking a pause to make sure you can afford the retirement lifestyle you want in Florida,” Bankrate analyst Alex Gailey told Newsweek.
Florida ranked eighth in Bankrate’s 2024 list of the best U.S. states for American retirees to live in.
While the crisis-stricken Florida’s home insurance sector seems to be finally stabilizing, a new crisis looms over condo owners as a crucial deadline set under the SB D-4 bill approaches.
The regulation, passed in May 2022, requires owners of condos in buildings aged 30 years and older to have their structure inspected by an architect or engineer by December 31. Should any evidence of “substantial structural deterioration” be found during the first check, a second, deeper inspection must be conducted; any required work should be started within a year of receiving a report describing the repairs that needs to be done.
As the key deadline approaches, condo owners in South Florida are rushing to offload their aging properties before being trapped with a possibly very high bill. In a recent report, ISG World found that there were 20,293 condo listings in Palm Beach, Broward and Miami-Dade Counties in the second quarter of 2024, up from 8,353 in the second quarter of 2023. Nearly 90 percent of those units are in buildings over 30 years old.
Jeff Brandes, a former Republican state senator and president of the not-for-profit organization the Florida Policy Project, previously told Newsweek that he feared for retirees in the state becoming bankrupt because of the new regulation.
“It could end up leading to some pretty catastrophic outcomes where people are unable to raise the money to fund their required reserves by state law,” he said.
Copelenko worries about a very similar outcome. “I have seen it personally, and it breaks my heart to see seniors who have worked all their lives and struggled to purchase their homes now terrified, looking at a future where they may be homeless,” he said.
