A court ruling is raising concerns among developers eyeing Florida’s aging apartment complexes

Three years after a Florida apartment building collapsed, killing 98 people, new regulations have led to a sharp increase in the cost of apartment living. With rising costs, residents of many aging buildings are selling out to developers who want to replace them with new, luxury high-rises.

In Miami’s Edgewater neighborhood, many old buildings have been torn down and replaced with new, shiny condos. But in a prime waterfront location in the neighborhood, there is an older building that now sits vacant.

Jacqueline Fraga says, “They’ve already taken out a lot of the windows and doors, if you look at the floors above.” Fraga owns one of the now-vacant units in the Biscayne 21 apartment building. All but a handful of the apartments in the 192-unit building have been purchased by a developer, who wants to tear it down and build a larger, more luxurious building in its place.

Fraga is one of the unit owners who took the developer to court just before demolition was to begin. The 13-story building, overlooking the clear blue waters of Biscayne Bay to Miami Beach, has a beautiful view. Fraga laughs and says, “Why do you think they want it so badly?”

Over the past two decades, waves of condominium construction have reshaped Miami. A once sleepy downtown now bustles with residential buildings, thriving restaurants and shopping complexes. With most waterfront locations built out, developers are targeting older buildings, especially those in prime locations.

Fraga says that a few years ago, she started getting calls from real estate agents asking if she wanted to sell. She says her answer was always the same. “I’m not interested in selling. I said, ‘I went to this building in my wedding dress, and I’m going to retire in this building.'”

Under pressure from realtors, other owners did sell. One company, Two Roads Development, eventually acquired all but ten of the building’s units. It took over the condo association’s board, voted to amend the governing documents, and authorized the building’s demise, allowing it to be demolished.

Many older condos in Florida, including Biscayne 21, require 100 percent approval from the building’s unit owners for termination. By lowering that to 80 percent, a Florida appeals court ruled that the developer violated the voting rights of the unit owners and that the condo termination was illegal.

It’s a ruling with broad implications for developers eyeing older apartment complexes for new projects. Attorney Susan Raffanello, who represents Two Roads Development, said, “From the perspective of my client and other developers in Florida, they’re really taking a step back and evaluating whether they should pursue redevelopment when they’re approached by these older, struggling apartment complexes.”

Regulations passed in Florida after the 2021 collapse of the Champlain Towers apartment complex have helped developers buy up and replace older residential buildings. The new rules have increased costs for residents of many older buildings, sometimes requiring significant special assessments that can be unaffordable.

Glen Waldman, an attorney representing Fraga and other unit owners, said that wasn’t the case with Biscayne 21, which was built in 1964. “This is not one of those buildings, even though it’s an older building, that had these life safety issues. It’s a solid, solid building. It’s passed all the required testing and would continue to do so.”

Attorneys for the developer are asking the appeals court to review the case and plan to take the case to the state Supreme Court if necessary. Raffanello says the ruling, if it stands, would make it much harder to replace older residential buildings. “It gives one person control over the entire community,” she says. “And that’s not something a developer wants to get into.”

Condo regulation is an issue that Florida lawmakers have addressed before and will likely take up again next year. Republican Rep. Vicki Lopez, whose district includes Biscayne 21, said the state should make it easier for developers to replace older apartments.

She represents 667 condo associations in her district and says she understands the dilemmas that rising costs pose for many apartment owners. “If you’ve lived in a building for a long time and you happen to live in a building that’s on a beautiful piece of land, you don’t want to leave. But the building is 60 years old, for goodness sake,” she says. “We’re reaching a point where the question is, is it affordable to live in a condo?”

The Biscayne 21 case throws more uncertainty into a Florida apartment market where three-quarters of the buildings are more than 30 years old. Concerns about new state regulations and the rising cost of living in apartments have slowed sales across the state and even led to a drop in prices.

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