Florida’s Property Insurance Crisis Is Driving Condo HOA Fees Higher

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Florida's skyrocketing property insurance costs and new safety regulations are driving condo HOA fees higher, even as property prices decline.

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Florida’s Property Insurance Crisis Is Driving Condo HOA Fees Higher

A perfect storm of factors is driving condo homeowners association (HOA) fees sky-high in Florida, even as the state’s condo property prices decrease. New Redfin research reveals that HOA dues are up over 15 percent from a year ago in Tampa Bay, Orlando, and Fort Lauderdale, compared with a median gain of six percent across the 43 U.S. metropolitan areas Redfin analyzed.

Soaring property insurance costs and new safety requirements after the Surfside condo collapse are the primary reasons behind Florida’s HOA fee increases. The Sunshine State is the epicenter of the nation’s property insurance crisis. Premiums have dramatically risen as natural disasters intensify, and many homeowners associations are raising dues to cover the costs.

It’s common for HOA fees to increase over time as property prices rise, but the situation in Florida is different. Condo prices are falling in many parts of the state partially because of surging HOA fees. A Redfin agent in Miami says many condos in Florida, even those without fancy amenities, have HOA dues of at least $1,000 per month. Some condo owners who are retired or on a fixed income are selling their properties because they can’t keep up with the payments.

While the dramatic HOA fee increase is somewhat unique in Florida, rising property insurance rates are a problem throughout the U.S. According to the Insurance Information Institute, the cost of commercial property insurance grew 15 percent nationally last year, the biggest jump in over three decades.

Rising property insurance rates are straining commercial and residential real estate and are fast becoming another factor hurting affordable housing. With premiums rising faster than property values, the increases are impacting developers and could lead to fewer affordable housing projects. 

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