Prices continue to increase for food, gas, and housing in South Florida. According to Miami Today, inflation in South Florida as measured by the Consumer Price Index was at 9.6% in April 2022, above the national annual inflation rate of 8.3% over the same time period. As highly publicized soaring prices of homes, condos and rentals across South Florida proved, the cost increase in housing in the past year outpaced general inflation, rising 10.5%, according to the bureau.
Insurance increases for South Florida community associations are also at an all time high. Worldwide natural disasters and the Surfside tragedy mean insurance is likely going to get more expensive, especially for condo owners.
In addition to inflation and insurance there is a new Florida law that is slated to take effect in 2024, which requires maintenance accountability measures on condos three stories or higher, such as engineering inspections and dedicated reserves to pay for fixes with no ability to waive those reserves. You can watch our recent Condo Inspection Webinar for more information.
Couple inflation with insurance increases and legislative changes mandating increased reserves facing many associations and you’ll see why dues will need to increase substantially over the next several years.
Now is the time to prepare your residents for this increase. Associations cannot rely on “standard” budget raises and expect to be able to pay their bills and be properly reserved in 2023. Boards need to start planning now and letting residents know now to expect increases to their dues.
Be transparent with owners about the increases; give them all the details, cite inflation rates and increased cost of goods and services and insurance. The more advance notice residents receive, the better. Owners may feel “blind-sided” by the increase if they are notified at the last minute.
Throughout the remainder of 2022, we will have a blog post each month discussing this inflation storm and offer tips for your association to ride it out.