Homeowners association fees in Florida have surged over the past year, driven by rising insurance costs and new safety regulations, leading to financial pressures on condo owners and declining condo market prices.

Homeowners association (HOA) fees in Florida have risen sharply over the past year, according to a real estate report published by Redfin on Thursday, putting increased financial pressure on condo owners across the state.

The rise in fees, largely driven by escalating insurance costs and new safety regulations, is outpacing the national average and affecting the condo market in major metro areas across the state. In Tampa, HOA fees jumped 17.2 percent year-over-year as of July 31, 2024, reaching a median of $614 per month, the steepest increase among 43 U.S. metro areas analyzed by Redfin. Orlando and Fort Lauderdale followed closely, with fees rising 16.7 percent and 16.2 percent, respectively. Other Florida cities, including West Palm Beach, Jacksonville, and Miami, also saw significant increases, with fees up between 5.7 percent and 12.8 percent.

The primary driver behind rising fees is the increasing cost of property insurance in Florida, the report claims. The state is currently facing a housing insurance crisis, exacerbated by a rise in natural disasters and a decrease in the number of insurers willing to operate in the market. As a result, insurance premiums have soared, forcing homeowners associations to pass these costs onto condo owners through higher dues. According to a Redfin-commissioned survey, nearly three-quarters of Florida homeowners have reported higher insurance costs or changes in coverage over the past year.

Additionally, new safety regulations introduced in response to the Surfside condo collapse in June 2021 have further contributed to the rise in HOA fees. The collapse, which killed nearly 100 people, prompted Florida to enact Senate Bill 4-D in May 2022. The legislation mandates regular structural inspections for condos and requires associations to set aside additional funds for repairs. To comply with these new regulations, many associations have not only increased fees but also imposed special assessments on condo owners, adding to their financial burden.

The impact of these rising fees is being felt across Florida’s condo market, where sale prices have started to decline as potential buyers become increasingly wary of the growing costs of ownership. Jacksonville saw the largest drop, with condo prices falling 6.6 percent year-over-year in July. Tampa and Fort Lauderdale also experienced significant declines, with prices down 4.9 percent and 4.2 percent, respectively. Even in Miami, where the market has traditionally been strong, condo prices decreased by 2.2 percent.

“Condos are really taking a hit. Prices are hurting,” said Eric Auciello, a Redfin sales manager in Tampa. “Condo fees are skyrocketing due to increased insurance costs. These additional fees have adversely affected the value of many units.”

The financial strain is found to be particularly challenging for retirees and those on fixed incomes, many of whom are being forced to sell and relocate due to the unaffordable fees. In some cases, even condos without amenities are now seeing HOA fees exceed $1,000 per month, compounding the financial difficulties faced by owners.

“Many buildings—even those without amenities—now have HOA dues north of $1,000 a month,” said Rafael Corrales, a Redfin Premier agent in Miami. “And with special assessments getting tacked on, a lot of condo owners who are retired and/or on a fixed income are being forced to sell and relocate because they can’t keep up with the payments.”

The rise in HOA fees is not limited to Florida, as similar trends are being reported in other parts of the country. However, Florida’s combination of rising insurance costs and newly-implemented safety regulations has made the situation particularly acute.