Bedecked with sudden debt
If you think hard times are knocking at your door, consider the mega-project neighbors and I are pondering to maintain our old Kentucky home — the Woodmont Condominiums off Poplar Level Road. If we opt to replace our rotting wooden balconies, we are certain to displace some of our financially challenged residents.
For the sake of safety, we unanimously decided to gather information and begin weighing our options. Given the colossal cost and distasteful decisions involved, we’ve notified all co-owners and invited them to commiserate at our annual meeting June 13.
We are the board of directors. I am the agonized miser — the poorest among the four of us. At our last meeting, on April 18, I was apoplectic — convinced I would have to move. I like living here and had planned to leave stiff and ashen, on a gurney. If I stay, the stress of prolonged debt may speed my final exit.
Three estimates range from $201,146 to $371,800. The average “special assessment” cost per unit was projected at $7,661 and later lessened, using reserve funds, to about $5,000. Both figures, though preliminary, make my head spin.
I am not alone in my existential crisis. But it was no consolation when my favorite neighbor, a retiree on a fixed income, said, “I’m gonna get what I can out of it and get out.”
Pursuant to a state law passed two years ago, sellers must disclose to prospective buyers capital improvement plans and other aspects of a condo association’s financial health. None of us objects to that statute. We view it as an act relating to transparency and common decency.
But if this project proceeds, I envision a worst-case scenario: a mass exodus of my low-income, elderly and disabled neighbors. There’s no social safety net for disadvantaged residents distressed by special assessments. Thus I fear a landscape littered with “for sale” and “for rent” signage. Owners ill situated to be financially soaked would leave. And lessees vexed by the specter of higher rent would relocate. Worse yet, competition among several units on the market at once likely would leverage lower prices.
Some of our residents are in no condition to move — physically or financially. Predictably, some who can’t pay would stay, drawing letters from lawyers and liens. We know we’d have difficulty collecting from some owners, but we’re left to guess how many. To absorb that incalculable cost, we’ve been advised to add 10 percent to each estimate in anticipation of non-payment on 4.2 of our 42 units.
As the only way to eat an elephant is one bite at a time, the only affordable project I can fathom would be built and financed in phases, over years. Ideally, we would pay slowly as we go, replacing a few decks at a time. Their conditions, like our incomes, range from good to poor.
But it’s complicated.
The elevated rails aren’t up to code; thus a patchwork of new and old would present an eyesore. Seeking a waiver would add legal fees and time — with no guarantee. Moreover, a multi-phased project would inflate the costs of materials and labor.
On the other hand, a bank loan to do it all at once would add, significantly,
A proposal to incentivize prompt payment with an early-bird discount raises a philosophical debate: Would we reward the haves at the expense of the have-nots?
A more divisive issue is that most lower-level units have concrete patios that needn’t be replaced. The proposed project would add little value to their units, yet they, too, would be assessed because the decks, as “common elements,” are a collective responsibility — not unlike the roofs.
The higher beneficiaries, by contrast, would have new decks.
It’s an inequality I could live under, here on the ground floor — if we could afford it.
The unpopular option within reach — to dismantle the upper-level decks and secure the resulting drop-offs outside the sliding doors — would devalue most units.
So there’s no palatable, popular option, and no clear consensus in sight. Only fright.
Even if I have no choice but to get what I can and get out, I’ll fear for those who have the good grace to stay. Within a few years, both buildings may need new boilers, new doors and resurfaced parking lots.
In the meantime, there will be a long, hot meeting amid a suffocating summer necessitating cool heads, deep breaths and all hands on deck.