CIC Info Bytes


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ISSUE # 72

CIC Info Bytes 08/17/23

CIC Info Bytes are frequent, succinct updates providing educational and engagement opportunities that help your community thrive!  Please forward and share this newsletter with your peers, neighbors and colleagues so they can connect and joinOur goal is to curate content that provides a robust basis for contextual understanding to support practical takeaways for you and your association.  Please consider following us on Twitter and Reddit. 

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CIC Info Bytes Newsletter 08/17/23 - PRINT EDITION

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Less than a year after four ex-board members of the Hammocks homeowners association were charged with massive fraud, a new lawsuit takes aim at other former HOA leaders who allegedly did nothing to stop the scheme that siphoned millions of dollars from residents.

The Hammocks Community Association and David Gersten, the court-appointed receiver overseeing the HOA, sued Ligia Capielo, Merlene Kopec, Madeline Maceda and Luz Ordonez in Miami-Dade Circuit Court.

The four were not criminally charged in the fraud, but played a role by “allowing or failing to stop the ongoing misappropriation of funds by former board members,” according to the civil complaint filed late last month…

Theft is too easy in Florida’s Homeowners Associations — Katherine Fernandez Rundle | Aventura Community News | December 29, 2022

Hammocks HOA Receiver Sues Board Members Over Alleged Fraud — Lidia Dinkova | The Real Deal | May 27, 2023

Man admits to embezzling nearly $30K from Washburn Lake Homeowners Association — Don Reid| Sturgis Journal | October 27, 2022

Man accused of stealing thousands from Indiana homeowners association — WHAS11 Staff | WHAS11 | April 24, 2023

Former HOA president charged after allegedly stealing $11K from account — Brionna McCall | Opelika-Auburn | August 8, 2023

Oahu Condo Issues Archives

Condo Owners Want More Power To Fight Their Homeowners Boards — Stewart Yerton | Honolulu Civil Beat | January 4, 2023

Hawaii Condo Owners Aren't Getting Much Love From The Legislature This Year — Stewart Yerton | Honolulu Civil Beat | May 3, 2023

“Can the board do this?” neglects the related question: “Should the board do this?”

HOA Homefront: Is your association government balanced? — Kelly G. Richardson | Orange County Register | June 16, 2023

The Sun’s investigation found that HOAs have filed roughly 3,000 foreclosure cases since 2018, more than 250 of which — or roughly 8% — have resulted in properties being auctioned off. At least 100 of the properties auctioned off were sold for $60,000 or less, according to court records. 

In a written statement, Polis said an HOA shouldn’t “drain a family or individual of their financial savings.” The governor’s office, in a news release citing The Sun’s reporting, said HOA foreclosures also exacerbate Colorado’s housing crisis.

“These recent accounts are heartbreaking and deeply troubling,” the Democrat’s statement said. “I continue to urge HOAs to be more flexible — clearly, there is more work to do with the legislature and local communities to enhance the rights of property owners and protect people from being ripped off.”

Jared Polis, Democratic state lawmakers call for more changes to Colorado’s HOA laws after Colorado Sun investigation 

— Jesse Paul | The Colorado Sun | August 16, 2023

State Rep. Naquetta Ricks, an Aurora Democrat, attempted to prevent homes under HOA foreclosure from being sold for a fraction of their value when she introduced House Bill 1137, a broad HOA reform measure, in 2022.

The sponsors of the measure intended to require in the bill that HOA-foreclosed properties be sold for no less than 80% of their market value. But the provision never made it into the legislation, which passed and was signed into law.

Ricks told The Colorado Sun that lobbyists representing HOAs and property managers fiercely opposed the proposed rule and that it was taken out to ensure the overall measure — aimed at limiting HOA foreclosures altogether — would pass.

“The bill was a tough bill,” she said. “We had to fight against a very large lobby.”

HOA-foreclosed homes in Colorado are auctioned off for a fraction of their market value, erasing years of equity

— Jesse Paul | The Colorado Sun | August 14, 2023

I'm registered blind - my HOA tried to sell my $1.1m home for $10k as my husband battled cancer, I could afford my bills

— Emma Crabtree | The U.S. Sun | August 15, 2023

HOA-foreclosed homes in Colorado are auctioned off for a fraction of their market value, erasing years of equity

At issue was a $5 million siding project the HOA board had recently approved and that was already underway. Each unit owner will incur a $40,000 to $52,000 upfront payment or monthly payments of $288 to $378 for 300 months, plus interest....

Mike Vial, the longtime attorney for the homeowners association who specializes in HOA law, acknowledges the expensive project could displace people.

“It’s clear that throughout the entire life of this [association], no one has done a lot in the way of maintenance repair. It’s been a starter home for a lot of people on a fixed income,” Vial says. “Every time a board gets elected and tries to make repairs, they’re met with a lot of resistance and back off. That’s how they got here.”...

A Homeowners Association in East Portland Is in Knots Over What a $5 Million Repair Might Mean for Its Low-Income Residents

— Sophie Peel | Willamette Week | February 15, 2023

When the property management company FirstService Residential Minnesota announced it was dropping noncompete clauses in employment contracts, it said the change aligned with the company’s values.

But a provision persists in its management contracts with condominium associations that says FirstService workers (including desk attendants and caretakers) may not be employed — either directly or indirectly — by the associations for two years after the contract expires.

That means condo owners who want to hire a new management company have to consider losing their staff, some of whom have worked in their buildings for years.

Minnesota banned noncompetes. A major property manager has a workaround. — Max Nesterak | Minnesota Reformer | June 7, 2023

Devil in the details — Catie Ratliff | C-Ville | August 2, 2023

Real Talk about Property Management Corporations — u/30ThousandVariants | Reddit

State records show the majority of Colorado’s 10,000-plus HOAs hire professional companies to handle their community’s day-to-day needs, delegating a great deal of responsibility — and power — to them.  WATCH the Youtube video.

Nearly $30K vanished from the HOA. Colorado can’t investigate the management company.

— Brittany Freeman | Rocky Mountain PBs | August 30, 2022

In May 2018, New York-based Stonefield Investment Fund IV paid $10,000 for the Woodward nest egg. There was about a $3,800 lien on the house when it was sold, according to the filing.

“I don’t understand any of this stuff,” Woodward said during the Thursday news conference, which local outlets recorded.

Woodward didn’t know until last week that the water bill was the reason she faced eviction, according to the filing. Vignarajah said her quarterly water bill spiked from $100 to, eventually, $1,200.  If the four-digit bills had come now, the situation would be different. The city and state have since passed laws to prevent homeowners from losing their houses because of unpaid water bills. But they may be forced from the home because someone bought the property just a few months before the new laws had gone into effect.

Woman faces eviction after home sold twice without her knowledge, attorney says — Ben Brasch | WaPo | August 9, 2023

Wing walking flights in Sequim draw lawsuit and FAA investigation — Dominic Gates | The Seattle Times | August 1, 2023

“What?” you say. Community associations are corporations, and aren’t shareholders protected from corporate obligations? Isn’t that the whole point of a corporation?

Yes, most community associations are corporations—non profit mutual benefit corporations. But there is a major difference between a community association and the typical business corporation. With a typical corporation the investors’ (shareholders’) liability is limited to the amount of their individual investment. Community associations usually have something more—lien rights to an individual owner’s separate interest, either a lot or a unit, and the personal obligation of an individual owner for his or her share of assessments...

3 Reasons Why Your HOA Can't Declare Bankruptcy — Tyler Berding | ECHO | August 1, 2023

Your Association is Broke - What Bills do you Pay When the Cash Runs Out? — Tyler P. Berding | Berding Weil | 2008

What Happens When a Community Association Fails? — Tyler P. Berding | Berding Weil | 2009

U.S. property bust threatens condo "death spiral" — Jim Loney | Reuters | April 2, 2009

After nine years of legal battling, Indianapolis has reached a settlement agreement with Towne and Terrace Corp., the nonprofit responsible for the troubled east side condominiums at 42nd Street and Post Road.

Towne and Terrace once was described as a dream community but has, in the past decade, fallen into disrepair due to negligence and become rife with crime and drugs. Indianapolis owns a portion of units in the complex, all vacant.

Under the new agreement, the city will settle outstanding fees it owes to the Towne and Terrace Corp., which is the official name of the Towne and Terrace homeowners association, and in return, be guaranteed full rights to participate in the homeowners association as a voting member for the first time. City officials plan to advocate for improvements to the neglected Towne and Terrace neighborhood.

Indy hopes settlement agreement leads to changes at Towne and Terrace — Ko Lyn Cheang | Indianapolis Star | September 22, 2022

Funding for the emergency work is currently being paid for with the association’s reserve funds, but Bradford said the intent is to seek relief funding following Gov. Mike Dunleavy declaration of the incident as a state disaster on Tuesday. City officials have issued notices telling property owners to save receipts and other records of emergency work for the purpose of applying for relief funds.

“Tell them we need a lot of money,” Bradford said. “We need millions.”

Efforts underway to save two condominium buildings exposed by flood — Mark Sabbatini | Juneau Empire | August 9, 2023

This all started as an issue with some of the balconies in the community. Some of the units also looked like they were crumbling…

Residents at condominium in Pembroke Pines told to evacuate; 2 buildings deemed unsafe — Marisela Burgos | WSVN 7News | August 14, 2023

Officials: No need to evacuate Pembroke Pines; balconies deemed ‘structurally compromised’

— Alex Browning and Kevin Ozebek | WSVN 7News | January 21, 2023

View past coverage:  1,  2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15 and 16.


A lesson from ChatGPT: people get excited by progress when they understand what it means.

Marc Andreessen, a venture capitalist who was Thiel's co-panelist at the Milken Institute conference back in 2013, said during a recently aired podcast that the world had "bifurcated into two domains" since the 1970s that had split where progress can and can't be made.

Andreessen said on the Hermitix podcast that the world of "bits" that constitute everything from the internet to social media has seen staggering leaps forward, while the world of "atoms" that constitute things like nuclear energy has been lost to decades of stagnation.

Humanity is on the brink of major scientific breakthroughs, but nobody seems to care — Hassan Chowdhury | Insider | August 8, 2023


“It’s not a ban,” Mark Lien, an industry relations consultant for the nonprofit Illuminating Engineering Society, and Andrew deLaski, the executive director of the advocacy organization Appliance Standards Awareness Project, told Vox in separate conversations. Both went on to describe the incandescent lightbulb-limiting guidelines as an “efficiency standard.”

The standard now requires light bulbs to emit at least 45 lumens (a measure of brightness) per watt. An average LED light emits at least 75 lumens per watt, while incandescent bulbs only emit 12 to 18 lumens per watt while using more energy. Switching from the classic incandescent to the new-age LEDs may sound like a big change, but, at the end of the day, most consumers probably didn’t notice anything different when the efficiency standard went into effect earlier this month.

What’s going on with your lightbulbs?: The myth of the incandescent light bulb “ban” — Rachel DuRose | Vox | August 12, 2023


The climate crisis demands replacing fossil fuels with green energy quickly, but thousands of wind and solar projects are looking at several-year wait times to get connected to transmission lines. To reach the country's goals to sharply cut planet-warming pollution, the U.S. needs to expand transmission capacity by 43% by 2035, according to the REPEAT Project led by Princeton University. But building those new transmission lines will take time, and billions of dollars.

That's where the laser sensors come in, says Marmillo, co-founder of LineVision, the company that makes them. Sensors can help utilities get real-time data on their power lines, which can allow them to send more renewable electricity through the wires. This tech is part of a suite of innovations that could help the U.S. increase its grid capacity faster and cheaper than building new transmission lines.

Why lasers could help make the electric grid greener — Julia Simon | Vox | August 13, 2023

The Cost of Net Zero

New Tax Rules Can Save You Thousands on Home Renovations — Ashlea Ebeling | WSJ | August 9, 2023


You might want to gut-check your EV purchase…

New EPA tailpipe standards call electric vehicle promises into question — Ethan Brown | TribLIVE | August 12, 2023


…For many Americans, [heat pumps are] inaccessible. Homeowners often face long wait times for installation due to a shortage of trained contractors; most renters don’t have a say over which technologies their landlords choose. And for low- and middle-income households, the upfront costs of new systems can be prohibitive (even if switching would lower energy bills).

What you need to know about the heat-pump rebates in the Inflation Reduction Act — Meg Duff | Slate | August 9, 2023


Supply chain disruptions, higher interest rates and more are increasing the cost of renewable energy.

For years, manufacturers—largely in China—reduced the cost of making everything from solar panels to battery cells, helping drive down power prices.

Between 2010 and 2021, the lifetime cost of electricity produced by onshore wind facilities dropped around 63% while solar declined 87%, according to the International Renewable Energy Agency, an intergovernmental clean-energy tracker. That plunge made generating electricity from solar and wind in most cases cheaper than from fossil fuels.

Green Power Gets Pricier After Years of Declines — Phred Dvorak | WSJ | August 13, 2023 


…Around Lake Washington, trees are rapidly being replaced with a growing density of concrete, asphalt and other heat-absorbing surfaces in buildings, roads and other pieces of urban infrastructure. That produces what’s known as an “urban heat island,” and it’s boosting temperatures around the Emerald City by at least 8 degrees Fahrenheit.

About 80% of area residents, even those in verdant, affluent neighborhoods, are now exposed to heat extremes much worse than the city’s rural surroundings, according to a new study by Climate Central, a nonprofit, climate-science research organization.

“Most of the planet is warming due to human-caused climate change, but the built environment in cities amplifies both average temperatures and extreme heat,” the study said.

By a wide margin, heat is the deadliest natural hazard in the U.S., and heat waves are growing hotter, longer and more frequent as climate change progresses, putting children and older adults especially at risk.

Among the 44 cities Climate Central analyzed, Seattle ranks in the top five for increased heat.

Using an urban heat index, the study contrasted ambient air temperatures in urban areas with those in rural areas. That estimate shows how much additional heat the built environment captures in each census tract across the studied cities.

More than half of Seattle’s population resides in areas where daytime temperatures are over 8 degrees hotter than they would naturally be, making a 90-degree day feel like 98 degrees. About 20% live in areas with a difference of over 9 degrees, and nearly 10% are in parts of the city recording a heat increase of over 12 degrees…

Seattle’s growth is heating up the region — literally. — Alison Saldanha | The Seattle Times | August 5, 2023

US EPA: Heat Island Effect | Seattle Canopy Cover Assessment

Future Land Use Map from the Seattle 2035 Comprehensive Plan


The article below is the perfect follow-up to our plastic coverage in Issue# 67:

The [EPA] wants to stop using the “chasing arrows” logo on plastics that can’t be recycled. The man who designed it more than 50 years ago agrees that the symbol has been misused.

…Consumers have long treated the chasing-arrows logo as an indication that an item can be recycled, wrote Jennie Romer, a deputy assistant administrator at the Environmental Protection Agency, in an April letter to the F.T.C.

But when it comes to plastics that can be “deceptive and misleading,” Ms. Romer wrote. Manufacturers often pair the iconic logo with a resin identification code, with numbers from 1 to 7 that indicate the type of plastic in the product….

‘Chasing Arrows’ Recycling Symbol Is Misleading on Plastics, E.P.A. Says — Chang Che | NYT | August 7, 2023


PHEW: There’s less plastic pollution flowing into the ocean from land than scientists previously thought, according to a study published in the journal Nature Geoscience.

The researchers estimated that about 500,000 metric tons of plastic end up in the ocean each year, with about half from land. The other half comes from the fishing industry in the form of nets, ropes, buoys and other equipment.

An earlier, widely publicized study in 2015 estimated that about 8,000,000 metric tons of plastic were entering the ocean each year from rivers alone. The new research might seem like good news, but the full picture is complicated: The amount of plastic in the ocean is still increasing by about 4 percent every year, according to the study.

Even a small increase each year adds up to a huge accumulation over time. Within 20 years, the amount of plastic on the sea surface could double, the authors found.

There Might Be Less Plastic in the Sea Than We Thought. But Read On. — Delger Erdenesanaa | NYT | August 7, 2023

Global mass of buoyant marine plastics dominated by large long-lived debris — Alison Saldanha | Nature Geoscience | August 5, 2023


…The study published by a graduate student at Duke University in Environmental Pollution found that of those studied, two-thirds of marine mammals had microscopic plastic particles embedded into their fats and lungs…

Plastics are lipophilic, meaning they are attracted to fats. This could be the reason why they became easily lodged in the whale's fat.

Whales and Dolphins Are Now Partly Made of Plastic: Study — Robyn White | Newsweek | August 11, 2023


Team converts polyethylene into fatty acids, soap’s main ingredient, but say it is not a panacea for plastic pollution…

US scientists turn old plastic into soap after fireside inspiration — Annalise Murray | The Guardian | August 10, 2023


Last month, the American Chemistry Council, a petrochemical industry trade group, sent out a newsletter highlighting a major new report on what it presented as a promising solution to the plastic pollution crisis: using “recycled” plastic in construction materials. At first blush, it might seem like a pretty good idea — shred discarded plastic into tiny pieces and you can reprocess it into everything from roads and bridges to railroad ties. Many test projects have been completed in recent years, with proponents touting them as a convenient way to divert plastic waste from landfills while also making infrastructure lighter, more rot-resistant, or, ostensibly, more durable…

But independent experts tell a much more complicated story, suggesting that most applications involving plastic waste in infrastructure are not ready for prime time. In recent years, several reports and literature reviews have highlighted the unknown health and environmental impacts of repurposing plastic into construction materials. They’ve also warned that post-consumer plastic isn’t desirable for use in many types of infrastructure — and that diverting plastic into construction is unlikely to make much of a dent in the massive tide of plastic waste that the developed world produces. To the contrary, adding used plastic to construction materials could even incentivize more plastic production. 

Using 'recycled plastic' in construction materials may not be a great idea after all — Joseph Winters | Grist | August 10, 2023


We hear a lot about climate wake-up calls. Here’s one you would do well not to ignore: Antarctica had the most extreme heatwave ever recorded.

In March 2022, east Antarctica saw temperatures of up to 38.5C higher than average for the time of year. A so-called “atmospheric river” brought warm air and moisture from Australia into the heart of the frozen continent, raising temperatures to -10C (14F) from the norm of -50C (-58F). Had the UK’s 2022 heatwave — which saw the nation exceed 40C for the first time — been that severe, we would have hit 60C…

What Happens in Antarctica, Doesn’t Stay in Antarctica — Laura Williams | Bloomberg| August 10, 2023

Housing Affordability & Homelessness

In the 1910s, US cities began enacting policies that would shape neighborhoods and, unintentionally, lay the roots for the severe housing shortage today: single-family zoning laws.

Zoning laws, at their most basic, follow a simple concept. In one part of town, only factories can be built. In another section of town, only apartment buildings can be built. And in a different part of town, only single-family houses can be built.

Single-family zoning laws are unknown to most Americans, but they were instrumental to the expansion of urban areas and the suburban ideal of owning a home with a front porch and backyard on a half-acre plot of land post-World War II.

The invisible laws that led to America's housing crisis — Nathaniel Meyersohn | CNN | August 2, 2023

More Housing Could Increase Affordability—But Only If You Build It in the Right Places — Alan Mallach | ShelterForce | June 19, 2020

Accessory Dwelling Units as Low-Income Housing: California’s Faustian Bargain — Darrel Ramsey-Musolf | MDPI | August 31, 2018


…Montana had a supply crisis. It needed a supply solution. His task force soon figured out how to get Montana more housing: Make it possible for folks to build housing units by right, rather than having every development go through a miserable, expensive process of negotiation. Encourage dense development in already dense areas. Cut red tape. Indeed, Montana already had pretty loose building regulations, and legislators loosened them even further—functionally banning single-family zoning and preventing towns and cities from adding onerous zoning policies, among many other changes and investments.

Montana’s policies aren’t perfect. There still isn’t enough incentive for developers to create low-income housing units, experts told me. Housing costs won’t decline immediately, because building takes time (and because high interest rates have frozen the development pipeline). Montana has weak tenant protections and too few resources for struggling renters, antipoverty advocates said.  Still, housing experts around the country are cheering. Montana now arguably has the most pro-development, pro-housing set of policies of any state. How did this policy phenomenon happen, and so fast?...

The State That Could Fix the Housing Crisis — Annie Lowrey | The Atlantic | August 09, 2018


“We’ve run out of land. When you run out of land, the way to solve it is to go vertical, to go up,” Tepler said. “You don’t have to make this into Manhattan, but you should make it into six, seven story buildings… but L.A. is still zoned for a lot of single family homes. It needs to get upzoned for the population.”

In the 1970s and 1980s, Los Angeles was downzoned, as measures passed that cut floor-to-area ratios, limiting development, particularly for multifamily housing. As for the California Environmental Quality Act, some suggest it’s being used to block housing. Earlier this year, the University of California Berkeley’s plan to build student housing was blocked by a state appellate court. The court cited the state’s Environmental Quality Act and ruled that students could potentially have an environmental impact. The ruling garnered a response from none other than California Governor Gavin Newsom, who said: “Our CEQA process is clearly broken when a few wealthy Berkeley homeowners can block desperately needed student housing…California cannot afford to be held hostage by NIMBYs.” Additionally, California’s construction defect law allows homeowners to file a claim against builders, if their building standards are violated, for up to 10 years (although there are some caveats.)...

Strained housing affordability is a 'manufactured crisis' created by bad zoning— Alena Botros | Fortune | August 13, 2018


American suburbs have struggled with red tape and community opposition to plans for more housing. One New York City suburb has successfully navigated these obstacles to ramp up construction of new downtown housing.

New Rochelle is emerging as a potential blueprint for overcoming the various political, financial and community obstacles that have made efforts to build multifamily housing in the suburbs an often insurmountable task.

The mayor, other city officials and executives at RXR, the property developer that led the construction, expedited the zoning and environment review process. They also spent a year talking to city residents at public hearings, online forums and during informal meetings to help shape the building plan and win over local opinion…

The Suburb That Defied Nimby — Maggie Eastland | WSJ | August 15, 2018

Infrastructure + Insurance

The skyrocketing cost of housing has pushed many Americans to trade their lives in big coastal cities like New York and San Francisco for more affordable ones in Sunbelt cities and Southern suburbs.

These more affordable regions of the country are also facing much more severe impacts of climate change, including extreme heat, wildfires, floods, and droughts. People are pouring into flood-prone Florida, moving into Houston not long after Hurricane Harvey devastated the city in 2017, and relocating to parts of the West and Southwest dealing with the worst droughts and wildfires in the country.

Rather than leaving areas at high risk of natural disasters and other climate issues, more Americans are moving into them. US counties that have the most at-risk homes are all growing in population, while those with the fewest at-risk homes are almost all losing residents, according to a 2021 Redfin analysis.

Middle class Americans are moving straight into fire and drought because they can't afford to live in the cities that are safer from climate change

— Eliza Relman | Insider | August 15, 2023

More People Are Moving In Than Out of Areas Facing High Risk From Climate Change

— Lily Katz and Sebastian Sandoval-Olascoaga | Redfin | August 25, 2021


Is the Florida property insurance market reaching peak pain?

 Every week or so, Edward Raggie walks through his front door and enters a painful, infuriating time warp.

Everything looks exactly the way it did that day in December, when he and his wife, Joanne Ragge, hastily packed up their Hurricane Ian-battered home after learning that dangerous mold had spread behind their white ceilings and bright blue walls. Their roof still leaks, its protective tarp peeling from the hot sun. Inside, brown insulation from the gaping hole in their ceiling pools on their swollen, lifted floors. Boxes of their family photos and belongings, stacked haphazardly, are still waiting to be moved out of the living room’s dank, musty air.

The couple, in their late 60s, are frozen in this “hell,” Ed says, because their insurance company, United Property and Casualty, ignored their claims for months after the hurricane and then severely underpaid them before going insolvent earlier this year….

How Florida let a top insurer abandon homeowners in their time of greatest need — Brianna Sacks | WaPo | August 4, 2023


Property insurers are watching your home with drones and satellites.

California couple loses homeowners' insurance because they drained their swimming pool…

— Michael Finney and Renee Koury | ABC 7 News | August 8, 2023


Soaring home insurance costs are pushing these families out of Florida — Madison Hahamy | Tampa Bay Times | August 14, 2023


Rich people don’t like skyrocketing property insurance premiums, either.

Barrier islands like Key Biscayne — vulnerable to sea level rise and tropical storms — are in the eye of the property insurance crisis, with owners seeing huge premium hikes and policy cancelations.

“The markets are very difficult – especially in certain zip codes. Key Biscayne is one of the most difficult zip codes,” said Steven Brooks, an industry veteran and president of Cornerstone Insurance.

The state-backed Citizens Property Insurance is the insurer of last resort, but will only insure property under $699,000, Brooks said. The median home sold price was $1.6 million in Key Biscayne, and a check on showed fewer than six properties at or below that number, all apartments .

Getting canceled: Key Biscayne is in the eye of the insurance crisis — John Pacenti | Key Biscayne Independent | August 14, 2023

Housing Market

Marcus by Goldman Sachs Group Inc. recently raised the interest rate on its high-yield accounts to an all-time high of 4.3%, following the latest hike in the Federal Reserve’s key benchmark rate. At the end of the June, about 39 million US homes had a mortgage rate below 4.375%, according to Black Knight, a mortgage technology and data provider. That was more than 73% of the outstanding mortgages in the US.

The discrepancy illustrates an unusual situation in the economy. During the period of historically low rates during the pandemic, millions of homeowners refinanced or took out mortgages below 4%. Now, after several hikes by the Fed, borrowing costs have surged to nearly 7% for a 30-year, fixed rate loan. Homeowners are reluctant to move and give that up, fueling an acute shortage of available homes.

— David Rovella | Bloomberg Evening Briefing | August 8, 2023

Marcus Rate vs. Mortgage Rate: Interest on High-Yield Is Higher Than Home Loans — Claire Ballentine | Bloomberg | August 8, 2023


See the mortgage rate “golden handcuffs” in action: Roughly 54% of homeowners with mortgages in Louisiana have a rate below 4%, per Redfin data shared with Axios.

Louisiana homeowners locked up by "golden handcuffs" — Brianna Crane and Emma Hurt | Axios New Orleans | August 10, 2023


Why are active listings down?

The housing market's seller strike is so ruthless that only 7 of the nation's 200 largest markets are back to pre-pandemic inventory levels

— Lance Lambert | Fortune; Republished by Yahoo! Finance | August 7, 2023


“On average, around 30% of the buildings we run through our algorithm end up being suitable for office-to-residential conversion,” Case Creal, senior associate and studio director at Gensler Seattle explained during a recent call, “but this doesn't mean they are all good candidates for conversion, the algorithm is just a starting point for us to discuss with clients the pros, cons and possibilities of a conversion,” he continued.

The firm's Seattle office recently applied the algorithm in its submission to the city's Office-to-Residential Design Competition. Gensler's proposal, which came in second place, explored the conversion of an undisclosed downtown 12-story office building, built in 1968, into an amenity-rich residence with activated surrounding alley ways.

The vision for the converted property includes an efficient double-loaded corridor with a centralized elevator core allowing for a variety of unit layouts with access to natural light and views, as well as the potential for an over-build of the structure for a greater unit yield. The building's existing central elevator core would remain, however existing stairs would be removed, and the footprint repurposed for building services (such as trash and recycling chutes, tenant storage, mechanical chases, and electrical/telecom rooms). The project also proposes construction of new rated stair towers at opposite ends of the floor plate to meet the life safety requirements of a multifamily building….

Gensler applies office-to-residential algorithm to explore conversions in downtown Seattle — Emma Hinchliffe | Daily Journal of Commerce | August 2, 2023

Built Environment

Doubling up is a way for projects to stand out in a sea of ritzy offerings where enticements such as fitness centers, playrooms, yoga studios and even meditation spaces have become standard. It’s also a way to sidestep fights over water temperature, like the ones that have erupted at some high-profile Manhattan buildings.  Lap pools are generally kept between 78 and 82F, while temperatures from 84 to 86F are preferred for other uses, said John Dugan of American Pool New York, which works with developers on installation and maintenance.

At NYC’s Ritzy Condo Buildings, Two Pools Are Sometimes Better Than One — Jennifer Epstein | Bloomberg | August 8, 2023


Mean radiant temperature vs. operative temperature.  Cooler surfaces = comfort.

Why Is It So Hot Inside, Even With The AC On? An Architect Has The Surprising Answer — The Conversation and Jonathan Bean | Inverse | August 12, 2023


More on passive houses that keep you insulated from a changing climate.

… the main reason they paid $1.4 million for the 2,500-square-foot home was the technology.

 “This winter it got freezing, and we were in our shorts,” says Amod Athavale, 37, who moved into the newly built house with his wife, Manasi Datar, 36, in July 2022. This summer, the house has remained at 72 to 75 degrees with only a few hours of air conditioning each day, despite the triple-digit heat that hit the city. In fact, their electricity bill currently has a negative balance of about $1,000, meaning the electric company owes them, Athavale says.

Triple-Digit Heat, but No Electric Bill? For Passive Homeowners, ‘It’s Hard to Go Back’ — Nancy Keates | WSJ | August 3, 2023

Condo Connection's financial coverage is indexed to our Dollar$ and $ense page dedicated to all things CIC finance.

Despite a decline from 64.7% to 59% over the past six years, the greenback is still #1 in global central bank reserves.

China's Digital Yuan mBridge Plan Challenges $7 Trillion Dollar Dominance

Bastian Benrath, Alessandro Speciale, and Christopher Condon | Bloomberg | August 8, 2023

The core consumer price index, which excludes often-volatile food and energy costs, rose 0.2% for a second month, Bureau of Labor Statistics data showed Thursday. That marked the smallest back-to-back gains in more than two years.

US CPI Report July 2023: Core Consumer Prices Rise 0.2% for Second Month — Reade Pickert | Bloomberg | August 10, 2023


It's the equivalent of giving every single American citizen $15 each morning…

The US government will add $5 billion to its debt pile every single day for the next ten years — Joseph Wilkins | Insider | August 8, 2023


Ratings downgrades align with the skyrocketing cost of servicing the US debt. 

— David Goodman | Bloomberg Five Things to Start Your Day | August 4, 2023


Ray Dalio, founder of the world’s largest hedge fund, Bridgewater Associates, didn’t coin it, but he became perhaps most-associated with the phrase “cash is trash” during that period. He changed his tune in a CNBC interview early this year: “Cash used to be trashy. Cash is pretty attractive now. It’s attractive in relation to bonds. It’s actually attractive in relation to stocks.”

Now, though, the government’s pile of debt has swelled following the War on Terror, the global financial crisis and the Covid-19 pandemic. Low interest rates and Fed bond buying masked the strain: Interest costs recently were no higher than in the early 1990s as a share of federal spending. But the Treasury barely seized the opportunity to lock in rock-bottom rates by issuing more long-term notes and bonds...

The Scary Math Behind the World’s Safest Assets — Spencer Jakab | WSJ | August 12, 2023


With all the things that have gotten more expensive (and then less expensive, even if it doesn’t feel like it) over the past 18 months, it should come as no surprise that housing costs are still what’s largely driving US inflation. While the Federal Reserve rate-hiking campaign to tame overall price surges seems to be working, shelter inflation was responsible for 90% of the Consumer Price Index’s otherwise modest monthly gain last month. 

A broad measure that includes rents, hotels and lodging, as well as home insurance, shelter is up 7.7% from one year ago. In fact, the first American city to tame inflation, Minneapolis, owes its success to affordable housing. And while rents are starting to flatline in some places, they’re soaring in (of course) New York. Then there’s China’s housing crisis, which has worsened amid declining sales and fears that one of its largest developers, Country Garden Holdings, may be the next giant to default. But while analysts are watching China’s property sector woes for signals about the global economy, data in the US continues to trend positive, showing receding inflation along with moderating growth in job gains and wages, fueling predictions that the Fed will succeed in fully defusing price pressures without triggering major job losses or a recession. But the good news “comes with an asterisk,” Mohamed El-Erian writes in Bloomberg Opinion. “Commodity prices could complicate the Fed’s ability to navigate a soft landing for the economy.”

— Victoria Cavaliere and Ian Fisher | Bloomberg Weekend Reading | August 12, 2023


Is It Time to Worry About Consumer Debt? What Is Going On in Seven Charts — Telis Demos | WSJ | August 16, 2023

Cashing In

US Workers Say They Need $1.8 Million to Retire

Workers are finding it harder to save for retirement, even as the amount they need keeps rising. The average savings target in the US is now $1.8 million, according to a new survey released Wednesday. That’s up from $1.7 million a year ago. Nearly 80% of the 1,000 401(k) plan participants polled said inflation and market volatility were getting in the way of saving more this year, and 36% of those respondents said they’d retire later than planned as a result. The year-over-year overall retirement target isn’t a huge change, coming in at about 6%, but the percentage of workers who think it’s “very likely” they’ll reach that goal fell to 37% from 47% a year ago, and from 53% in 2021.

— Natasha Solo-Lyons | Bloomberg Evening Briefing | August 2, 2023

Cashing Out

The share of US adults who said they could cover a surprise $400 bill in the third quarter without taking on debt dropped two percentage points to 46%, according to a poll conducted by decision intelligence company Morning Consult for Bloomberg News.

Just over one third of respondents said they’d need to use some sort of debt, such as borrowing from credit cards. Almost one in five people said they would not be able to pay at all.

The figures highlight that US adults are increasingly vulnerable in an era of high prices, despite recent signs of disinflation and strong consumer demand.

Shrinking Minority of Americans Able to Cover $400 Surprise Bill — Hannah Pedone and Alexandre Tanzi | Bloomberg | August 3, 2023


You know them. They’re lawyers in New York, doctors in Phoenix, dentists in Memphis. They own construction companies in your hometown, burger franchises off the highway, homes in the resort villages your parents want to retire in. They’re young, old, Democrats and Republicans. They have two things in common: They’re rich. But they don’t feel that way.

To understand the large and growing class of “regular rich” people, we polled hundreds of them and interviewed dozens in extensive conversations covering everything from their incomes and net worth to their thoughts on relocating to cheaper parts of the US. The goal was to understand why so many with so much feel poor. And what it all means…

In fact, many even go so far as to say they’re poor. In a nationwide survey of over 1,000 objectively wealthy Americans — defined in this case as making at least $175,000 a year, roughly the amount required to crack the top 10% of US tax filers — a full quarter told us they were either “very poor,” “poor,” or “getting by but things are tight.” Half described themselves as just “comfortable.”

Are You Rich? Calculate the Best US Cities to Live in for Your Salary — Claire Ballentine and Charlie Wells | Bloomberg | August 14, 2023


A new analysis by the Committee for a Responsible Federal Budget puts a dollar figure on the cuts Americans could see to Social Security benefits in 2033, when analysts expect payroll taxes that flow into the program won’t be enough to cover monthly payments to retirees.

It estimates that a typical, newly retired, dual-income couple would see a drop of about $17,400, amounting to roughly $1,450 a month. Couples who earned more in their careers on average could see roughly $23,000 in benefits cut. And couples with lower earning would see about $10,600 less, representing a larger potential drop as a share of income.

Social Security Benefits Cut: Retirees Could See $17,400 Less in 2033 — Suzanne Woolley | Bloomberg | August 9, 2023


If building wealth is an obstacle for Gen Z and millennials, they’re willing to jump all the hurdles.  The youngest generations contributed more to their 401(k)s last quarter than anyone else at a time when the promise of retirement has never felt less hollow…

Gen Z, millennials outpacing older generations in 401(k) contributions — Jane Thier | Fortune | August 10, 2023


Annual Spending in Retirement: $144,000 | $130,000 | $250,000 | $220,000

…To find out what $5 million buys in retirement, we spoke to retirees around the country with savings in that ballpark.

Most never expected to be multimillionaires but were diligent about saving from early on in their careers.  Though they are less concerned about outliving their money than many retirees we have profiled, they aren’t all living in luxury. Some haven’t bought new clothes in years. Others continue to work part-time.

They splurge on world travel but, like most older Americans, worry about their health and their families…

Here’s What a $5 Million Retirement Looks Like in America — Jane Thier | WSJ | August 10, 2023


A multifamily reckoning:  Apartment buildings, long considered a real-estate haven, are emerging as the next major trouble spot in the beleaguered commercial-property world.

Investors bid up the prices of multifamily buildings for years, attracted by steadily rising rents and the prospect of outsize returns. Many took on too much debt, expecting they could raise rents fast enough to pay it down.

Unlike office buildings and malls, which have been hit hard by remote work and e-commerce, rental apartments have low vacancy rates. The apartment sector’s main problem isn’t a lack of demand—rents have soared since 2020—it is interest rates.

The sudden surge in debt costs last year now threatens to wipe out many multifamily owners across the country. Apartment-building values fell 14% for the year ended in June after rising 25% the previous year, according to data company CoStar. That drop is roughly the same as the fall in office values.

A Real-Estate Haven Turns Perilous With Roughly $1 Trillion Coming Due — Konrad Putzier and Will Parker | WSJ | August 7, 2023

Q: I live in a condominium association.  One of the owners has requested to see the ledgers for two homes that we believe are delinquent in the payment of assessments.  However, our Board has cited privacy concerns and has refused to provide access to the ledgers.  Is the Board’s position correct?  --D.C., Naples

A: No, in my opinion, the Board is not correct.  Chapter 718 of the Florida Statutes provides that these ledgers are official records of the association.  This same statute also lists official records that are confidential and would not be subject to unit owner inspection.  Owners’ ledgers are not among the list of confidential official records.  I recommend going back to the Board and requesting a reference point in the law that would allow them to deny a request to view these official records.  If the Board continues to refuse the owner access to review the requested official records, the unit owner has remedies, including filing a complaint with the Department of Business and Professional Regulation, Division of Condominiums, Timeshares & Mobile Homes.

HOA Q&A: Are a condo association's ledgers private in regard to assessment delinquency? — John C. Goede | TCPlam | August 5, 2023

Condo association: consider edibles rather than smoking weed — Jo DeVoe | ARLnow | August 11, 2023

Lawsuit pits Ahwatukee HOA against its parent — Paul Maryniak | Ahwatukee Foothills News | July 5, 2023

Harrisburg homeowners win jury trial against Heatherstone HOA — Jane Monreal | WCNC | August 3, 2023

…Ferrer said his client had been working with the association since 2014 to come to an agreement, but that every time the board members would change, Blue Grouper would have to start all over again.

“It’s important for all of the unit owners to be involved in condominium association board’s business. For years, my client was trying to work with the condo association … without litigation,” he said. “Get informed because at the end of the day you might end up with a big tab as a result of something you [unit owners] didn’t do.”

Blue Miami Condo Association Owes $1,000,000 in Damages — Katherine Kallergis | The Real Deal | April 14, 2023

The statutes never define the term “personnel matters” — but presumably the idea was to allow the board to talk about employee matters such as hiring, firing, performance, discipline and compensation privately, to avoid embarrassing the employee (or tipping an employee off that they might be terminated before the association is ready to do so). It’s typical for companies to discuss these types of employee matters privately.

The problem is that when you don’t define a term in a law (or contract), you leave it open to very broad interpretations. For example, is discussing an issue related to someone who works at a community but who is an employee of a management company a “personnel matter” under the statute? That does seem reasonable, but we don't really know.  Or, what about discussing the performance of the management company, generally?  That discussion certainly involves discussing the performance of the individual employees, but it’s also potentially broader, in that it involves employees who don’t work directly for the association, but who impact the management company’s services (such as their back-office accounting team). That’s more attenuated, but I do know many associations that consider these types of discussions to be “personnel matters,” such that they are discussed at closed meetings (and there are very good reasons that might be in the best business interests of the association).

Looking even more broadly, what about discussing the performance of non-management “employees,” such as the association’s landscaping vendor? Those employees do not work directly for the association, but they perform association business just like management employees. It’s more attenuated, but is it really substantively different?

Resident is suspicious of homeowners board that met behind closed doors repeatedly. — Ryan Poliakoff | The Palm Beach Post | July 23, 2023

Legislation Page

Bill Might Require Training for Volunteers Who Serve on Condo Board

— John C. Goede | Hawaii Business Magazine | April 18, 2023

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