Tag Archives: goonan

A Lesson in Contradiction and Irony – America’s Real Estate Market

      6 Comments on A Lesson in Contradiction and Irony – America’s Real Estate Market
guest blog by Deborah Goonan

I must admit, it’s becoming very difficult to keep up with real estate market news these days. The most recent Census data report pegs the US homeownership rate at a mere 64% – a 25-year low. Yet, markets are heating up and home prices are making the American Dream even less attainable.

I’ve included a few links to some of the dozens of recent reports that I read every month. If I had to describe the current housing market in one word it would be “insanity.”

The so-called market recovery varies considerably from one market to another, and even between market segments. For instance, in Miami 4th Quarter year-on-year sales of single family homes were up 7.7%, while condo sales in the same market were down 3.3%. Prices were up 4.7% for single-family homes, and 8.6% for condos, despite falling demand. Yet 325 new condo towers have been have been proposed in Miami, and 13,000 of the total 41,000 units proposed are currently under construction. Foreign buyers from Russia, South America, and European countries make up a significant portion of the market, but their buying power is eroding as the value of the dollar increases.

Who is going to buy all of these condos?

Phoenix and Denver also reports low supply and high prices, while in Chicago, sales are still lagging behind.

Meanwhile, in the Tampa Bay area, where dozens of condo conversions gone bad were de-converted to apartment rentals in recent years, several previously stalled new construction condominium projects have since been scoffed up by investors and rented for several years. Guess what? Now those rentals are converting back to condos for sale. Staging companies are having a field day furnishing vacant units to woo buyers.

So in addition to displaced condo owners losing their homes and life savings, we also have displaced tenants competing in an already tight rental market. The problem is, condo prices are too high for most of these displaced owners and rents are going through the roof for all of these folks on the move. But who cares? Not all those private investors in the process of making their next wave of fortunes in this budding boom market.

The same condo conversion euphoria is reportedly occurring in other major urban areas, especially New York City.

My head hurts from shaking it.

At the same time, the luxury real estate market is going wild. In Tampa and Miami, for instance, many condos are selling above $1 million, even though the median price for condos in the Tampa-St. Petersburg market last year was a mere $110,000. New high-end condo complexes in Tampa Bay are pre-selling their units for millions of dollars.

Washington Post’s Christopher Ingraham reports that the McMansion is back in vogue across America. Developers are apparently targeting affluent families buying up the real estate ladder, despite the fact that the millennial generation is opting out of buying first homes and renting instead. (Be sure to check out the photos of some very posh properties in FL, selling at $5 million and up. The author also notes that despite all the marketing and political hype about the virtues of urban living, most developers and construction companies are politically Conservative (according to campaign contribution records), and prefer to live in spacious homes with large lots in far-flung locations away from the hustle and bustle of the city.

Go figure. After all, I suppose big-time stakeholders in this insane real estate market need somewhere nice and private to live

(link to Tampa Bay Times on condo de-conversions to conversions)

(link to NBC real estate market report – Miami)

(link to Tampa Bay Times on luxury condo market)

(link to Orlando Sentinel/Washington Post  on the return of McMansions)

(link to Jan 2015 US Census housing data)

Sewage backups a problem for St. Cloud condo complex, trailer community

      No Comments on Sewage backups a problem for St. Cloud condo complex, trailer community
guest blog by Deborah Goonan

There is a national misconception that HOAs are all prestigious gated communities or luxury condos for the wealthy. That’s just not the case. The vast majority of HOAs across the country are home to people of all income brackets.

Florida, like many other states, has its share of “affordable” and low-income housing in Associations. Most of these are multifamily arrangements such as low-rise condos and townhouses, or trailer parks where residents lease lot space.

But in St. Cloud, FL (Osceola County), owners in Palm Gardens condominium complex and Floridian RV Park have something to make a big stink about – literally. They’ve got sewage backing up when it rains, and bubbling up from the street and into yards. Their children cannot safely play in contaminated areas. The stench is terrible, and owners and residents are frustrated.

Florida DEP and Osceola County have been slow to respond. Palm Gardens condo owners have been told they will each have to come up with $3000 to rebuild the entire system, but few can afford that much money. They already pay $165 per month maintenance fees to the condo association.

It is unclear who will pay for repairs in both of these low-income residential neighborhoods, and perhaps that’s part of the reason these issues have festered so long.

This is another shining example of what can go wrong when public works are privatized: poorly built infrastructure, no regular maintenance or inspections of the system, finger-pointing and blame-shifting when inevitable problems come to the surface. Local governments say that the owners in the private community should pay for repairs. Owners say that building inspectors and code enforcement should have been doing their jobs all along. HOA and Condo Boards, with little guidance and oversight, have been allowed to underfund reserves or squander money over the years, and now owners cannot come up with hefty special assessments. They wonder, “Where did all our money go?”

Where indeed.

Palm Gardens condo complex

Floridian RV Park, WFTV Video coverage

America’s worst neighbor owns a luxury condo in St. Petersburg FL

      No Comments on America’s worst neighbor owns a luxury condo in St. Petersburg FL
guest blog by Deborah Goonan

It seems that even if you own a condo worth nearly a half-million dollars or more, you can still end up next to the Neighbor from Hell. Bad neighbors can even afford to live at Signature Place, with its panoramic views of Tampa Bay in the heart of downtown St. Petersburg.

As of last July, the Tampa Bay Times reported that local police had responded to 48 calls regarding Brian J. Daly over a period of three years. Neighbors have filed complaints of domestic disturbances with Daly’s cocaine-addicted female companion, noxious odors, Daly pacing in the hallways buck naked, making lewd remarks and threats to other residents, and generally obnoxious and disruptive behavior while under the influence of alcohol and drugs. This has been going on since 2010.

Dr. Nathan Hameroff, who owns the unit next-door to Daly, has filed a lawsuit against him alleging at least 31 incidents, seeking injunctive relief and reimbursement for loss of rental income. Hameroff leases his unit, but two of his tenants terminated their leases early, and a third tenant has received a concession in his rent to prevent him from leaving as well. All three tenants, several other neighbors, and contractors that have interacted with Daly believe he is a danger to himself and others.

The condo Board and local police department have issued various citations and fines, but the threats and bad behavior continue.

Ironic, isn’t it? In one FL condo association a retired veteran can be threatened with foreclosure over a flag placed in a flowerpot, but in this upscale, classy condo, even a potentially dangerous owner cannot be arrested or otherwise monitored after nearly five years of wreaking havoc upon his neighbors.

Something is very wrong with this system.

By the way, in addition to a potentially dangerous neighbor, condo owners also have to contend with expensive repairs of numerous construction defects in the 6-year-old building.

I guess some people don’t mind throwing good money after bad.

July 2014 Tampa Bay Times article about Signature Place

http://www.tampabay.com/news/publicsafety/crime/at-elegant-signature-place-in-st-pete-nothing-classy-about-unit-2403/2188286

Feb 2015 Tampa Bay Times article about Signature Place

http://www.tampabay.com/news/business/realestate/suit-claims-unspeakable-behavior-by-signature-place-tenant/2219379

Legislative fix for FL condo takeovers?

      3 Comments on Legislative fix for FL condo takeovers?
guest blog by Deborah Goonan 

In 2007, Florida passed a law that has been dubbed “Eminent Domain for Condos.” The law allows for 80% of voting interests to approve a plan to terminate the condo association for the purposes of redevelopment, as long as no more than 10% of voting interests object to the plan.

At the time the law was passed, the stated intent was to make it easier for owners of hurricane damaged or functionally obsolete condos to sell their ailing building to investors who would then redevelop on valuable land.

However, in the 8 years since enactment of this law, real estate investors and developers have descended like vultures, preying upon distressed condominium associations. Taking advantage of FL statutes, investors have been buying unsold units in bulk, at pennies on the dollar, taking control of the association, amending the governing documents where necessary, and voting to terminate the association.

In most cases, their intent is to convert all of the units to rental apartments, at a time when record numbers of people are renting rather than buying condos. Investors have forced nearly 20,000 condo owners – many of them homestead owners – to accept termination proceeds equal to one-third to one-half of what they paid for their units at the height of the real estate market prior to 2007. Essentially, condo owners have been kicked to the curb, many with outstanding mortgage balances for homes they no longer own. Cash buyers lost most of their hard-earned life savings with nothing to show for it.

An op-ed written by two attorneys from Greenspoon Marder Law firm states that a proposed bill in Florida “could satisfy public outcry” over condo takeovers that have forced nearly 20,000 owners to sell their homes, many of them at a fraction of their purchase price.  (You might recall from my previous blogs on this topic that Steven Geller, the sponsor of the 2007 legislation amending FL condominium termination process, is now a shareholder at the same law firm.)

Condo owners adversely affected by Florida’s flawed legislation have pressured their state Representatives and Senators to take action. Florida Realtors, who have helped to draft HB 643, have also expressed deep concern. The current draft provides that bulk buyers must make  “third-party” owners whole at termination, by paying 110% of the condo owner’s purchase price or fair market value, whichever is higher.  In addition, all first mortgages must be satisfied, and a relocation allowance is payable to homestead owners.

Realtors hope that legislative change will renew confidence in the condo market. Between negative media coverage and word of mouth, buyers are reluctant to purchase real estate in Florida, particularly condominiums that have been featured in the media. Additionally, many condo owners are finding it difficult to sell their units, except to other bulk buyers hoping to snatch up units at a low price.

The current bill, (HB643), retains 80% vote of approval – as long as no more than 10% of voting interests reject a plan – for optional termination of condominium. That provision remains unchanged as sponsored by Geller and signed into law by Governor Christ in 2007.

As has always been the case, the governing documents can still provide a lower percentage of owner approval for termination.

Attorneys Mark F. Grant and Raul Valero claim in their article that unanimous consent of owners for a condominium termination is unrealistic and that a single holdout can extract too much money out of the termination settlement.

Grant and Valero go on to explain that in 2010 the FL Legislature passed the Distressed Condominium Act, a law set to expire on June 30, 2016. The Act reduces liability of condo-buying investor groups for construction defects and deficits in reserve funding allegedly caused by the original developer. The Optional Termination and Distressed Condominium statutes, when combined, created the golden opportunity for hostile condominium takeovers in Florida.

As currently written, HB 643 still does not address a key issue. Voting interests are allocated to the number of units owned or proportional share of condominium ownership, not to individual owners. The result is that we have real estate investor corporations outvoting homestead owners, terminating the condominium and forcing them to sell, even at a substantial loss.

As long as votes are allocated to the property vs. people, investors will find a way to exploit that loophole. Because FL statute sets no absolute minimum threshold for termination approval, a bulk-buyer-controlled Board that holds sufficient voting interests can simply amend the governing documents to reduce the approval threshold, thus making termination possible on their own terms.

The only ways to remedy that situation is to more equitably allocate voting interests among the people involved, rather than tying them to inanimate units. Bottom line: opportunistic investors should not be able to trample the rights of homestead property owners.

Grant and Valero characterize bulk buyers as some sort of saviors that have “rescued” failing condominium associations, the buyers later concluding that a de-conversion would make better financial sense.

Whether or not you believe that the condo takeover fiasco was carefully crafted or the result of unintended consequences now is the time to consider the rights and needs of condo owners that thought they were buying a home as opposed to a real estate investment property.

Tragically, even if a homeowner-friendly bill is passed, it will be too late to help tens of thousands who have already lost their homes, their life savings, and their credit.

(link to op-ed regarding Condo Termination legislative proposals)

(link to FL HB 643)

Orange County officials dealing with Blossom Park, Tymber Skan Residents living in unsafe condos

      5 Comments on Orange County officials dealing with Blossom Park, Tymber Skan Residents living in unsafe condos
guest blog by Deborah Goonan

I have blogged about the Blossom Park condo conversion recently. In recent weeks, Orange County Fire Department has stationed one of its trucks at the scene, and a structural engineer has examined the buildings, including the staircases and upper decks, deeming most of them unsafe. An official report is due this week, and in the WFTV report linked below; Orange County officials expect to order an official evacuation within days.

The County is now providing financial assistance to move the residents – mostly low-income tenants – to safe housing.

Court-appointed receiver, Frank Barber of Deer Run Realty & Management Company, insists that the problems are not that dire, and has reportedly urged residents to stay. He is relying on fees collected to pay for needed repairs, and — let’s not miss the obvious — to pay for services provided by his company.

Left unsaid in the many news reports: the taxpayers of Orange County are footing the bill to assist Blossom Park residents. And the bill must be substantial, as it includes increased police protection due to high crime and three recent murders in Blossom Park, stationing the Fire Department adjacent to the condo complex, assigning a structural engineer to inspect the condo buildings, and evacuating and then providing 30-days of free housing to hundreds of low-income residents.

Nearby Tymber Skan is another troubled condo complex, complete with squatters, criminals, dilapidated structures, and rats climbing the walls. Taxpayers have paid hundreds of thousands to cover unpaid water bills, police protection, demolition of buildings, and relocation of residents. This has been going on for several years, and its still not over.

So are HOAs really “no-impact” or “low-impact” tax revenue cash cows for local governments? Perhaps in the short term, but what about over the long term?

And are County officials now “heroes” stepping in to save the day? Hardly. Where have they been all these years, when these distressed condos have been left mainly to their own defenses, living conditions growing progressively worse? No one has been held accountable for allowing residents to live in squalor, for failure to manage the financial affairs of these failed Associations, for creating the conditions that allow violent crime and blight to flourish unchecked.

Better yet, how were these condo projects approved in the first place, with such shoddy construction, and why weren’t regular inspections done to ensure deficiencies were identified and repaired early on? It should have been clear to planning and development commissions that many of these developments and redevelopments were doomed to failure and premature obsolescence.

And what about the social impact to residents and surrounding neighborhoods, where people fear for their health and safety? Can we really put a price on the total costs? Decades of neglect by local governments – preferring to allow thousands of HOAs to attempt to govern themselves and manage their own affairs, while collecting property tax revenues from owners – has led to this chaos.

From deteriorating infrastructure to Bully Boards to neighborhoods divided over how their money is being spent, more and more of these stories are being reported and brought to the attention of the public. And what we see reported on the news is only a small percentage of the problems, because, in many HOAs, owners resist going public for fear of scaring away future buyers (or tenants) and reducing property values. In fact, the outspoken owner is often intimidated, harassed, or ostracized for daring to air the dirty laundry, so to speak. It’s a sick, twisted mindset that threatens the very foundation of the American Dream for millions of Americans.

(link to WFTV story on Blossom Park)

(link to Tymber Skan story)