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A court decision worries developers eyeing Florida's aging condos

A Florida court has blocked a developer from demolishing and replacing Miami's Biscayne 21 condominium.
Greg Allen, NPR
A Florida court has blocked a developer from demolishing and replacing Miami's Biscayne 21 condominium.

Three years after a residential building collapsed in Florida, killing 98 people, new regulations have led to a steep increase in the cost of condo living. With the rising costs, residents in many aging buildings are selling out to developers who are racing to replace them with new luxurious high-rises.

In Miami’s Edgewater neighborhood, many older buildings have been torn down and replaced by new gleaming high-rise condominiums. But on a prime waterfront spot in the neighborhood, there’s an older building that’s now vacant.

Jacqueline Fraga says, “They’ve already taken out a lot of windows and doors, if you can see in the floors upstairs.” Fraga owns one of the now-empty units in the Biscayne 21 condominium. All but a handful of apartments in the 192-unit building were bought by a developer, who wants to tear it down and build a bigger, more deluxe building in its place.

Fraga is one of a group of unit-owners who took the developer to court right before demolition was to start. The 13-story structure, looking out over the clear blue waters of Biscayne Bay to Miami Beach, has a stunning view. Fraga laughs, saying “Why do you think they want it so badly?”

 Jacqueline Fraga is one of ten unit-owners who have refused to sell their condos to Two Roads Development
Greg Allen / NPR
Jacqueline Fraga is one of ten unit-owners who have refused to sell their condos to Two Roads Development.

Over the last two decades, waves of condominium construction have reshaped Miami. A once-sleepy urban core is now bustling with residential buildings, thriving restaurants and retail complexes. With most sites on the water now built out, developers are targeting older buildings, especially those in prime locations.

Fraga says she started getting calls several years ago from realtors asking her if she wanted to sell. She says her answer was always the same. “I’m not interested in selling. I said, ‘I got to this building in my wedding dress and I’m going to retire in this building.”

Pressured by realtors, other owners did sell. A company, Two Roads Development eventually acquired all but ten units in the building. It took over the condo association’s board, voted to change its governing documents and authorized the building’s termination, allowing it to be torn down.

Many older condos in Florida, including Biscayne 21 require approval from 100 percent of the building’s unit owners for termination. By lowering that to 80 percent, a Florida appeals court ruled the developer violated the voting rights of unit owners and that the condo termination was illegal.

It’s a ruling with a broad impact on developers who are eyeing older condos for new projects. Attorney Susan Raffanello, who represents Two Roads Development says, “From my client’s position as well as other developers throughout Florida, they’re really taking a step back and evaluating whether or not to pursue redevelopment of properties when approached by these older and ailing condominium buildings.”

Regulations passed in Florida after the 2021 collapse of the Champlain Towers condominium have helped fuel the drive by developers to buy out and replace older residential buildings. The new rules have increased costs for residents in many older buildings, sometimes requiring sizeable special assessments that may be unaffordable.

Glen Waldman, a lawyer who represents Fraga and other unit owners says that wasn’t the situation with Biscayne 21, which was built in 1964. “This is not one of those buildings, even though it’s an older building, that had those life safety issues. It’s a solid, sound building. It has passed all its required tests and would have continued to do so.”

Lawyers for the developer are asking the appeals court for a rehearing and plan to take the case to the state Supreme Court if necessary. Raffanello says the ruling, if it stands, will make it much harder to replace older residential buildings. “It’s given a single person control over the entire community will,” she says. “And that’s not something that any developer wants to walk into.”

Condo regulation is an issue Florida lawmaker have waded into before and one likely to come up again in next year’s legislative session. Republican representative Vicki Lopez, whose district includes Biscayne 21, thinks the state should make it easier for developers to replace older condos.

She has 667 condo associations in her district and says she understands the quandary rising costs present for many unit-owners. “If you’ve been living in a building a long time, and you happen to be in a building that’s on a beautiful piece of property, you don’t want to leave. But the building is 60 years old for goodness sake,” she says. “We’re now reaching a point where the question is, is it affordable to even live in a condominium anymore?”

The Biscayne 21 case casts more uncertainty over a Florida condo market where three-quarters of the buildings are over 30 years old. Concerns about the new state rules and the rising cost of living in a condo have slowed sales statewide and even led to a drop in prices.

Copyright 2024 NPR

As NPR's Miami correspondent, Greg Allen reports on the diverse issues and developments tied to the Southeast. He covers everything from breaking news to economic and political stories to arts and environmental stories. He moved into this role in 2006, after four years as NPR's Midwest correspondent.