Florida condominium conversions buffet retirees
Fort Lauderdale, Fla.
Conversion of rental apartment units into condominiums is having a sharp impact on retirees all over Florida and has resulted in a flood of complaints to legislators. Many retirees assert that they cannot afford to buy their apartment nor can they find a comparable place to which they can move.Skip to next paragraph
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The problem is particularly acute in Miami, Fort Lauderdale, and in the Tampa-St. Petersburg area on the state's west coast.
Rik Fulscher, president of the National Apartment Association (NAA), in recent testimony before the housing subcommittee of the Florida House, pointed out that inflation and high interest rates, coupled with restrictive local building codes, zoning, and slow-growth policies, have contributed to rental housing shortages and have generated pressures for rent control.
As a result, investors and developers are reluctant to build new rental apartments.
Mr. Fulscher added that a study prepared in 1978 for the Joint Economic Committee estimated that during the 1980s, the nation would need an additional 9 ,356,000 rental housing units. Current production levels are far short of this figure.
The NAA executive said that for 1980 it was estimated that no more than 300, 000 multifamily rental units would be built, half of them subsidized by the federal government.
It is further projected that at least 145,000 rental housing units will be converted into condominiums.
"By cranking in the normal attrition through abandonment and demolition," added Mr. Fulscher, "we wind up with a net reduction in the rental housing inventory this year, a rather bleak prospect in the light of the lowest vacancy rate in 20 years and the joint economic committee study's estimate of 9.4 million rental-housing-unit demand for this decade."
In Dade County (Miami and Miami Beach), about 10,000 of the County's 200,000 rental units already have been converted to condos. In the first two months of this year Dade developers filed applications to convert 1,928 apartments to condos, almost half the number converted during all of 1979. Another 8,000 are expected to go condo this year.
Earlier this year the village of Kings Creek in South Miami was sold for $33, 585,000, one of the largest transactions of its kind in county history. This rental project is being converted into a 1,067-unit condominium. More than half of the current tenants have signed up to buy their apartments.
In another Miami transaction, Harold L. Miller, a Chicago attorney and investor, bought the Vizcaya Towers for $13.6 million and has begun turning the building into 161 condominiums. Prices will range from $95,000 to $170,000 and, Mr. Miller says, he already is near the sell-out point.
Nonetheless, Mr. Miller predicts that Florida conversions may be headed for a shakeout.
"Because of the heavy concentration of rental units in Dade, Broward, and Palm Beach Counties," he said, "it has attracted too many amateurs to the lucrative conversion field. Amateurs got into the conversion business because they saw it as a way to make money. However, they began to overbid on property. As a result, that forced prices to go up, yet they are still sitting around with units to sell."
Broward County (Fort Lauderdale, Hollywood, and Pompano Beach) presented a more striking picture.
Applications during January and February covered 2,647 apartments, 84 percent of Broward's 65,000 apartments have gone condo in the last three years and few people are willing to predict the final tally for 1980.
In Palm Beach County an estimated 1,300 of some 30,000 apartments already have been converted and it appears that this figure will triple by the end of the year.