Format Policy Brief
Client May 8 Consulting
Date January 2025
Length 8 Pages

Condominiums play an important role in providing affordable homeownership to first time homeowners and retirees. Fifty years after condominiums became a popular housing model, policy makers are encouraging more condominium construction to provide needed affordable housing and entryways into homeownership. But several inherent weaknesses in the condominium model must be addressed to provide affordable and long-term viable ownership opportunities. Condominiums’ purchase price may be affordable, but fees are increasing as condos building system repair needs increase with age and insurance rates rise, endangering long-term affordability. Where an owner cannot pay the assessed fees, the condominium association has the power to foreclose on the condo unit and sell it at public auction to recover that fee. The owner may lose their homes even after diligently paying their mortgage and property taxes. And where multiple owners are unable to pay, condominium developments can fall into financial distress, which may lead lenders to stop offering mortgages to prospective condo buyers.

In the last year several states have passed new laws to make condos more physically and fiscally safe and healthy. Some of this legislation helps to make the condo model more resilient, while other laws present a cautionary tale as they destabilize condo markets and make condo ownership more vulnerable. This article explores the important role condos play in providing affordable homeownership to first time homeowners and retirees, the risks to those owners and their communities, and potential solutions to strengthen the model.