Florida Governor Ron DeSantis is certainly known for his controversial legislation, the latest of which drastically increases fees for condominium owners.
In June, DeSantis signed HB 1203, and while some say it will make the millions of condos in Florida safer, it will also increase the cost of living for residents. In fact, each homeowner will have to pay an additional $60,000 to the HOA just because of potential hurricane damage.
Debate Over DeSantis’ HB 1203
When Gov. DeSantis signed HB 1203 in June of this year, it immediately sparked a debate.
The majority of people argued that the bill would hold condo and condo-hotel owners more responsible for maintaining safe building and maintenance practices and, therefore, was a positive piece of legislation for Florida homeowners.
A Necessary Cost to Residents
However, those who read the law carefully noted that while buildings’ owners and the local homeowners associations (HOA) will have to ensure their buildings are safe, they will be using increased resident fees to do so.
Many associations may face repairs and replacement costs that reach the millions, and residents are the ones who have to pay the price.
The Law Was Passed in Response to the “Worst Structural Disaster in American History”
It’s important to understand that this legislation was written and passed in response to the Champlain Towers tragedy in Surfside, Florida, in 2021. The 12-story building collapsed, killing 98 people and becoming one of the “worst structural disasters in American history.”
After the accident, an extensive investigation found that the building was not constructed to follow the state’s building codes and that it was overdue for an inspection. Now, DeSantis says this legislation will help to make sure nothing like it happens again.
The Reality of the Problem
“When I first moved into this apartment, my first thoughts were, this is an amazing place; this is where I want to spend the rest of my days,” Cristian Murray, a condo owner at Palm Bay Yacht Club in Miami told News Nation Live.
“Little did I know, two years later, I was going to be hit with an assessment of $140,000 to fix the maintenance that the previous boards of directors neglected to fix throughout the building.”
Condo Owners Have to Pay
The condo units facing the highest fees are the sought-after corner units. News Nation Live reports that these fees can reach approximately $140,000.
Many owners are now confronted with limited choices: returning to work, adopting a more frugal retirement lifestyle, or relocating.
Florida Residents Must Complete a $60,000 Home Assessment
As part of the new legislation, millions of Florida homeowners must complete a home assessment, by law, to make sure the house can withstand a hurricane. Of course, hurricanes are wildly detrimental in Florida and a home assessment is a good, not a bad, thing.
The problem is that homeowners will have to pay for this assessment out of their own pockets, and it will cost them a whopping $60,000.
Florida Residents Were Shocked When They Found Out
Once it became common knowledge that residents were going to have to pay $60,000 for a home assessment, many Floridians spoke out against the outrageous fee.
One homeowner, Tammy Rodeffer, told the press that she was in “shock” when her HOA representative told her to make her home assessment appointment. In fact, she originally thought it must have been a mistake and contacted her neighbors to see if they received the same notices.
Most People Don’t Have $60,000 Lying Around
Of course, the vast majority of Americans do not have $60,000 lying around to simply hand over to their HOA.
Therefore, the legislation stipulates that residents have two options: They can either pay the fee in four equal quarterly installments over the course of a year or in 32 quarterly installments over eight years.
This Isn’t Even the Only Additional Fee Homeowners Will Have to Pay This Year
While $60,000 already seems like an unbelievable fee to have to pay, it’s not the only added expense for homeowners in Florida.
The legislation stipulates that other existing fees will be increased this year and others will be added. Some say these fees could add up to more than $100,000 by the year’s end.
The Bill May Also Force Residents to Pay for Color-Coded Paint
Although the majority of these fees are supposed to improve the safety of Florida homes and condos, homeowners will likely have to spend at least some of their hard-earned money on painting their houses and shutters to meet the new color-coded mandates included in the law.
Many HOAs have color regulations, but on top of everything else, this added stipulation really just feels like a slap in the face.
Some Floridians Will Have to Sell Their Homes
Because of these almost unbelievable fees, many say that thousands of Floridians may have to sell their homes.
While there are certainly many who will find homes or condos not governed by an HOA, others will likely have to move into a smaller, HOA-run space in order to be able to afford the added annual fees.
The HOA Needs Funding, But This Isn’t the Way to Do It
One reason DeSantis passed this law is that Florida’s HOAs are desperate for funding. As Patricia Staebler, a reserve specialist at MoneyWise, explained, “I’ve been doing this for 15 years. In my entire reserve specialist career, I have never seen an HOA 100% funded.”
However, while most people agree that the HOA needs more funding to ensure buildings are safely built and maintained, charging residents tens of thousands of dollars simply isn’t the way to do it.
Another Ongoing Crisis
On top of these new laws, the skyrocketing cost of home insurance makes living in Florida unaffordable and physically and financially unsafe.
According to a survey by real estate brokerage Redfin and data available on Zillow, 11.9% of homeowners in the state say they plan to move in the next year due to climbing insurance costs (via Newsweek).
The Insurance Problem
Florida’s property insurance market has been facing an ongoing crisis that has left homeowners struggling to pay the higher premiums. While lawmakers are scrambling for solutions, many people are drowning under the cost of living in the state.
The main reason behind the crisis can easily be traced back to the uptick in extreme weather events, which have been increasing due to climate exchange.
Insurance Companies Flee
Private insurers are not able to make a profit as an increasing number of policyholders are submitting claims each year. Hoping to cut their losses in the state, insurers are reducing coverage or refusing to renew policies.
Since 2017, 11 companies that offered homeowners insurance in Florida liquidated. Almost half of them liquidated in a single year.
The Affect on Floridians
Nearly 70.3% of Florida homeowners report being affected by rising home insurance costs or changes in coverage over the past year.
This number is much higher than the national report, which indicated that less than half of US homeowners were affected.
Florida Is In a Worse State Than California
The rising cost of home insurance affects more homeowners in Florida than in California, which is dealing with its own housing insurance crisis.
In the Golden State, homeowners are struggling to find coverage to protect them against flooding and wildfires that are breaking out in the state at increasing rates each year.
The Florida Housing Market Could Face a Serious Hit This Year
With this new law in place, some experts believe that the Florida housing market could face some serious problems this year.
Foreclosures in Florida have skyrocketed over the past year, but the Sunshine State will likely see thousands more over the next few months. And these added foreclosures will unquestionably affect the already tenuous housing market.
Houses Aren’t Selling
But everyone is seemingly listening to the warnings coming out of the Sunshine State. Real estate inventory in parts of Florida is surging, and sellers are beginning to slash prices.
According to a report from Redfin, the number of houses up for sale and the rate at which their current owners are cutting asking prices is soaring
What Houses Are Selling?
“Homeowners living in areas where insurance premiums are surging are at risk of seeing their properties gain less value than homeowners in areas with stable premiums—and in some cases, they may even lose money,” Redfin chief economist Daryl Fairweather said in a statement.
“Homes with low disaster risk and low insurance costs will likely become increasingly popular, and thus more valuable, as the dangers of climate change intensify.”
The Reality of Florida’s Housing Market
Eric Auciello, Redfin’s sales manager, stated in the report, initially covered by Fortune, that “the North Port metro was one of the most competitive housing markets in the country in recent years due to its affordability for remote workers and a shortage of homes for sale, but none of those factors hold true today.”
“Sarasota, in particular, has been overvalued for decades, and the chickens have finally come to roost.”
Floridians Are Fed Up With DeSantis
This legislation is only the latest in a long line of controversial decisions from Governor Ron DeSantis. While the governor still has more than two years to his term, almost 60% of Sunshine State residents say they’re disappointed with their leader.
DeSantis made a half-hearted attempt to run for president in 2024, and many believe he will try again in 2028. However, with the way things are going, it seems unlikely that the Republican will win the primaries, let alone the White House.
The Future of Florida
All of these factors have made living in or selling homes in Florida nearly impossible for many Americans.
While many plea that the state’s governor will help them, the problem has grown seemingly too large to be tackled in just a few years. The future of Florida’s housing market seems shaky as everyone tries to flee for safer waters.
