The long term potentially negative aspects of condominium buildings as a dominant housing form in cities

Yesterday, the Washington Post published an article, "Condominiums in crisis: Financial troubles put many communities at risk," discussing how older condominium buildings and complexes are running into problems as they age. From the article:

For five summers, a tarp has covered the swimming pool at Grand Bel II, a condominium community in Silver Spring that has no money for lifeguards, chemicals or insurance. The Vistas at Washingtonian Woods in Gaithersburg faces $600,000 in repairs but has just $400,000 in cash reserves.

At Saxony Square in Alexandria, an unemployed man nine months behind on his mortgage negotiates with lenders to keep his two-bedroom condo. His neighbors struggle to pay their monthly fees; since 2010, Saxony’s board of directors has filed more than 80 court actions to try to collect such assessments.

Even as posh condos rise in trendy neighborhoods around the nation’s capital, many older complexes are mired in a recession that never ended. A cycle of aging infrastructure, limited resources and foreclosure is putting these communities in a deep financial hole, threatening what traditionally has been an affordable path to homeownership for the working class.

Maintenance costs increase and the financial problems of owners lead to foreclosures or failures to pay the "condo fees," which makes it that much harder to maintain buildings.  Plus, FHA won't make mortgage loans to complexes with a a fair mount of vacancy or fee delinquency making it that much harder to attract new residents.

The crumbling walkway on the second floor at Hermitage Woods. The elevator in the aging five-story complex hasn't worked for at least six months. Parts of the wraparound balcony are cordoned off because of structural weakness. (Michael S. Williamson/The Washington Post)


Implications of adding owner-occupied housing to mixed use districts.  In testimony to the Zoning Commission in 2006 and 2007, I made the point that one of the problems posed by adding owner-occupied housing to mixed use "commercial" districts is that it was essential to get the design right, to have it be of permanent positive urban design qualities--get it right the first time--because unlike how commercial buildings are "reskinned" every 30 years or so and get a design update, residents are not likely to agree to special assessments for design improvements to the facade unless they can be assured that the payments will come back in increased property values.

And I didn't discuss at length the difficulties of getting large numbers of resident households to participate in managing the building or to agree to change.

Toronto's Tower Renewal program as a model response.  A few years ago, writing about addressing the issue of abandoned multiunit properties in Anacostia ("Deeper thinking/programming on weak residential housing markets is required: DC example, Anacostia"), I mentioned the Tower Renewal program in Toronto as a model approach for working with multiunit properties, to help keep such properties viable.  Note also that HUD has a similar program for buildings constructed as part of the HUD housing affordability program.

-- Tower Renewal Implementation Book, City of Toronto
-- Tower Renewal initiative webpage, City of Toronto

This piece from APT Bulletin: Journal of Preservation Technology, is particularly good, "Reassessing the Recent Past: Tower Neighborhood Renewal in Toronto."



Conclusion.  Just like with the problems of declining infrastructure and the need for a public response, increasingly local governments are going to be called upon to step in and address problems in multiunit residential communities, as a stabilization measure.

But it's even harder than apartment buildings, because in a condominium there can be hundreds and hundreds of individual owners, as opposed to a small investor group likely to own an apartment building.

I suggested in a piece on the Watergate in 2011, that revitalization strategies for multiunit buildings were not only an issue in low income buildings ("Tower Renewal: The Watergate and Southwest DC, and Toronto") but of "aging" buildings, although I didn't state this so succinctly ("Toronto hopes to revitalize its many postwar highrises," Toronto Globe & Mail).


Then I wrote:

I'm not sure if the problem with the complex is its location, age and the physical decline of the facility, the relatively old age of the condominium owners, the high cost of the units and a decline in their appeal to younger audiences, the failure of the hotel, further reducing activity within the complex, the anti-human urban design of the Kennedy Center, the need for a larger number of residents and office workers to generate the support necessary for successful retail, and even with the supermarket, could an independent succeed where a chain store cannot, because of higher corporate overhead and other fixed costs. ...

But then I was thinking that the issues are not unlike those that planning director Rollin Stanley sees as an issue in Montgomery County--that traditional subdivisions with large houses, populated by a lot of people around the same age in the 1960s and 1970s, have a difficult time regenerating as resident households age out and younger families aren't necessarily interested in taking their place in houses and living patterns that they may consider dated.

Clearly the Watergate complex is a candidate for "renewal" and a release from its basic urban renewal format--a complex of buildings inwardly focused in an area of minimal street activity.

Much of the time we don't think of "rich areas" as needing public planning assistance, but the issue isn't wealth or poverty as much as it is urban design and the transportation network, whether or not it is age-resilient

Many jurisdictions have programs to address distressed neighborhoods.  The Neighborhood Stabilization Program in Prince George's County is an example of such a response.  And Baltimore's Healthy Neighborhoods program is a way to recruit new residents to single family housing, as a way to rebuild and reinvest in emerging neighborhoods.

The buildings discussed in the Post article aren't distressed in the same way as those kinds of neighborhoods, they are middle income properties, but they are in decline, and without proactive intervention, their situations are likely to get worse.

Building decline will in turn push decline outward into the broader neighborhood/district/ sector.

If a local government isn't proactive, the situation is likely to get worse, not better, and will cost even more money to fix later on. Public involvement is justified as a form of community and neighborhood stabilization.

The Post article quotes people saying that eminent domain and condemnation actions by local government may be necessary to address this growing problem.

Some experts say better oversight and tighter restrictions are not enough, predicting that some complexes could deteriorate to the point where government agencies will have to intervene.

“Without significant changes, you’re going to have cities and states condemning and taking over these properties,” said Natalie Stewart, president of a California-based condominium consulting firm.

Christopher Anderson, chief of the community development division for Montgomery County’s Department of Housing and Community Affairs, said such a scenario was “not outside the realm of possibility” but added that the resources available to local government are limited.

“We cannot as a county responsibly lend money to condo associations to fix problems,” he said.

The Tower Renewal model is an approach that more communities may wish to adopt and adapt in order to come up with a strategy and process for being proactive in addressing the weak submarket problem for middle-income and aging condominium buildings and complexes.

"The market" is too diffuse to do this in a rigorous and quick manner.

And note, in 40 years we may have to have similar programs for the condominiums built in the last ten years and right now.  Today's new building is a declining building in 40 years.