A late comment, but the opposite is also happening - developers are permitting projects as apartments to get lower priced insurance and then converting to condos after completion to sell. This negatively impacts the buyers as there is then no insurance to cover a construction defect claim and the developer is left bare and must hope that the subcontractors had good insurance in place
If I could add some insight into this subject, at this late date...
The developer/owner/landlord of my building, and many others nationwide; has taken the concept of constructing high rise developments, retaining ownership and control, to a whole new level.
There are two parts to this.
1. Through personal experience and research of historical internet pages, I have learned this developer and many others, have a pattern of constructing deficient buildings. They create the same general excuses for each new build they open. Or fail to open, correctly or safely, or on time.
In fact, its safe to say, they've rarely opened a location safely, correctly or on time.
Each new site, inevitably experiences the same types of oopses.
Unable to open for pre-leased tenants, due to unfinished construction, lack of occupancy permits, "unexpected delays in the construction supply chain"etc...
That last excuse was used for years predating the pandemic.
Tenants who were usually locked into leases, 6 to 8 months earlier, were shocked to arrive for the grand opening day(August 14th for almost every year in every building); and find they had nowhere to live.
If the owner was publicly humiliated enough, those tenants may get offered hotel rooms somewhere far away or worse, gift cards or maybe a vague offer of " future rent or ledger debt adjustment". With no amounts suggested.
They were never offered the chance to end their leases(unless they chose to pay the entire lease cost upfront as well as costs of referring to new tenants), they were always told their rent, utilities and fees were still due immediately and in full each month.
Since these buildings have been marketed towards universities and colleges students; the harms caused are usually a major negative impact on tenants.
Especially for those who manage to survive that first pitfall.
These delays last anywhere from a few weeks to half a year or longer.
But when the tenants move in; they quickly learn just how big of a mistake they made.
Usually its plumbing failures.
Lots of them. Everywhere.
And trash. Mounds of it on every floor.
There's also parking issues. Lack of parking. Over enforced towing. Under enforced permit verifications leaving paying tenants on the streets or impounded.
But for the most part flooding takes the top of the list of complaints.
Building after building, city after city, year after year; there is a constant litany of proof of construction defects wherever this developer builds.
Such was the case for my building.
Granted it managed to meet its Grand Opening Date. Which was a miracle considering all the prior years of supply chain failures, they somehow managed to avoid the same fate that every other development faced in the middle of the worldwide pandemic. Turns out the didn't so much as avoid being harmed as they actually made decisions to just not build correctly.
On the surface it seemed minor.
Tenants had to survive without key fobs for a period after moving in.
Trash was everywhere immediately.
One major selling point offered by the owner was concierge onsite staff; to ensure tenants had daily life comforts met ahead of time.
This was stated to mean mail and package delivery, directly inside your unit for security purposes, daily concierge trash removal from your front door or on call as needed, immediate response for maintenance needs, and 24 HR building security to ensure no dangers entered the building.
None of that existed in reality.
But each time a tenant expressed concern, the corporate pretty boy greeting team, assured them that the hiring process was almost completed and all would be well soon.
Then tenants found themselves completely adrift, after the corporate greeting team hightailed it out of town, after the first week.
Within all of the ruckus of students moving in and starting school that same time; major flaws went relatively unnoticed.
Throughout the whole building major plumbing failures appeared.
The stairwells, which constituted the bulk of means of egress and ingress, were inundated with water penetrations. The underground garage Foundation had huge sheets of water pouring down them from broken water lines. ELE trial lights recessed inside walls on the second floor common area deck were shooting water out. Above the lights were faux garden containers which actually held ground water greywater. Albeit not quite as intended.
Tenants didn't see all of this immediately. Mainly because they were more concerned that the windows in their apartments weren't really windows. Just some glass stuck inside the walls to look like windows.
Hvac systems sucked. That's the best way to say it. They weren't high efficiency. They weren't the correct type for the size of apartments, number of tenants and neck they provided no source of fresh air.
Depending on your proximity to a hidden deficient water system flooding or leaking, your apartments were either freezing cold jungles or dried out arid deserts. It was sinus infections, stuffy noses, bloody noses, skin flareups and migraines, from day one.
Despite multiple reports to city code enforcement and the joyous occasions of fire alarms occurring several times a day; the owner was allowed to remain uncontested in the build.
Over the last two plus years the building has experienced major failures in plumbing for extended periods of time. Every unit here has flooded at least once if not more. Causes range from sprinkler system, washers, hvacs to all out complete failure building wide which lasted a month or longer.
The builder actually admitted he had intentionally dine deficient work or used incorrect materials or just didn't do anything. All of which he attributed to the direct orders of the owner.
Of course you won't find any official records of any of this.
And to make thus even more fun, the building and the builder won some kind of award for being the best of 202, nationwide.
Not a very hard feat considering how little construction occurred nationwide in that year or the prior year.
2. The fear of condo conversions
This turned out to be a delayed fear. Delayed by about 10 years.
No longer is there any market thought of or created for a potential buyers market.
Berkeley, specifically, fought that battle years ago.
There is also little reason to be concerned about AirBnB or variations thereof.
Why?
Because my landlord has created a new concept.
Build to Rent.
Citizens are no longer looked at as viable sources of long-term high interest ballooned payments, for what are in reality, apartments.
We've been downgraded in value.
The bigger picture of financial gain longterm, is a lifetime renter. One who will always have to pay to stay. Until death do they depart.
AirBnB and condos have been skirted.
Developer owners have created buildings where it doesn't matter what got built wrong. No one will listen if one complains. And soon no one will have a choice about where to live.
Someone told me that developers who once would have built condos are building apartments with plans to convert them in 10 years. The idea is that after 10 years there’s no litigation risk. Not sure if there’s truth to that. If there is, I wonder if we will see a spike in condo conversions.
This is true. Most buildings are platted to be condos, so that the owners can convert if the market and laws are favorable at the time. Pushing this to happen is the challenge.
A late comment, but the opposite is also happening - developers are permitting projects as apartments to get lower priced insurance and then converting to condos after completion to sell. This negatively impacts the buyers as there is then no insurance to cover a construction defect claim and the developer is left bare and must hope that the subcontractors had good insurance in place
This is very interesting. And important. Super helpful. Thanks.
If I could add some insight into this subject, at this late date...
The developer/owner/landlord of my building, and many others nationwide; has taken the concept of constructing high rise developments, retaining ownership and control, to a whole new level.
There are two parts to this.
1. Through personal experience and research of historical internet pages, I have learned this developer and many others, have a pattern of constructing deficient buildings. They create the same general excuses for each new build they open. Or fail to open, correctly or safely, or on time.
In fact, its safe to say, they've rarely opened a location safely, correctly or on time.
Each new site, inevitably experiences the same types of oopses.
Unable to open for pre-leased tenants, due to unfinished construction, lack of occupancy permits, "unexpected delays in the construction supply chain"etc...
That last excuse was used for years predating the pandemic.
Tenants who were usually locked into leases, 6 to 8 months earlier, were shocked to arrive for the grand opening day(August 14th for almost every year in every building); and find they had nowhere to live.
If the owner was publicly humiliated enough, those tenants may get offered hotel rooms somewhere far away or worse, gift cards or maybe a vague offer of " future rent or ledger debt adjustment". With no amounts suggested.
They were never offered the chance to end their leases(unless they chose to pay the entire lease cost upfront as well as costs of referring to new tenants), they were always told their rent, utilities and fees were still due immediately and in full each month.
Since these buildings have been marketed towards universities and colleges students; the harms caused are usually a major negative impact on tenants.
Especially for those who manage to survive that first pitfall.
These delays last anywhere from a few weeks to half a year or longer.
But when the tenants move in; they quickly learn just how big of a mistake they made.
Usually its plumbing failures.
Lots of them. Everywhere.
And trash. Mounds of it on every floor.
There's also parking issues. Lack of parking. Over enforced towing. Under enforced permit verifications leaving paying tenants on the streets or impounded.
But for the most part flooding takes the top of the list of complaints.
Building after building, city after city, year after year; there is a constant litany of proof of construction defects wherever this developer builds.
Such was the case for my building.
Granted it managed to meet its Grand Opening Date. Which was a miracle considering all the prior years of supply chain failures, they somehow managed to avoid the same fate that every other development faced in the middle of the worldwide pandemic. Turns out the didn't so much as avoid being harmed as they actually made decisions to just not build correctly.
On the surface it seemed minor.
Tenants had to survive without key fobs for a period after moving in.
Trash was everywhere immediately.
One major selling point offered by the owner was concierge onsite staff; to ensure tenants had daily life comforts met ahead of time.
This was stated to mean mail and package delivery, directly inside your unit for security purposes, daily concierge trash removal from your front door or on call as needed, immediate response for maintenance needs, and 24 HR building security to ensure no dangers entered the building.
None of that existed in reality.
But each time a tenant expressed concern, the corporate pretty boy greeting team, assured them that the hiring process was almost completed and all would be well soon.
Then tenants found themselves completely adrift, after the corporate greeting team hightailed it out of town, after the first week.
Within all of the ruckus of students moving in and starting school that same time; major flaws went relatively unnoticed.
Throughout the whole building major plumbing failures appeared.
The stairwells, which constituted the bulk of means of egress and ingress, were inundated with water penetrations. The underground garage Foundation had huge sheets of water pouring down them from broken water lines. ELE trial lights recessed inside walls on the second floor common area deck were shooting water out. Above the lights were faux garden containers which actually held ground water greywater. Albeit not quite as intended.
Tenants didn't see all of this immediately. Mainly because they were more concerned that the windows in their apartments weren't really windows. Just some glass stuck inside the walls to look like windows.
Hvac systems sucked. That's the best way to say it. They weren't high efficiency. They weren't the correct type for the size of apartments, number of tenants and neck they provided no source of fresh air.
Depending on your proximity to a hidden deficient water system flooding or leaking, your apartments were either freezing cold jungles or dried out arid deserts. It was sinus infections, stuffy noses, bloody noses, skin flareups and migraines, from day one.
Despite multiple reports to city code enforcement and the joyous occasions of fire alarms occurring several times a day; the owner was allowed to remain uncontested in the build.
Over the last two plus years the building has experienced major failures in plumbing for extended periods of time. Every unit here has flooded at least once if not more. Causes range from sprinkler system, washers, hvacs to all out complete failure building wide which lasted a month or longer.
The builder actually admitted he had intentionally dine deficient work or used incorrect materials or just didn't do anything. All of which he attributed to the direct orders of the owner.
Of course you won't find any official records of any of this.
And to make thus even more fun, the building and the builder won some kind of award for being the best of 202, nationwide.
Not a very hard feat considering how little construction occurred nationwide in that year or the prior year.
2. The fear of condo conversions
This turned out to be a delayed fear. Delayed by about 10 years.
No longer is there any market thought of or created for a potential buyers market.
Berkeley, specifically, fought that battle years ago.
There is also little reason to be concerned about AirBnB or variations thereof.
Why?
Because my landlord has created a new concept.
Build to Rent.
Citizens are no longer looked at as viable sources of long-term high interest ballooned payments, for what are in reality, apartments.
We've been downgraded in value.
The bigger picture of financial gain longterm, is a lifetime renter. One who will always have to pay to stay. Until death do they depart.
AirBnB and condos have been skirted.
Developer owners have created buildings where it doesn't matter what got built wrong. No one will listen if one complains. And soon no one will have a choice about where to live.
Someone told me that developers who once would have built condos are building apartments with plans to convert them in 10 years. The idea is that after 10 years there’s no litigation risk. Not sure if there’s truth to that. If there is, I wonder if we will see a spike in condo conversions.
This is true. Most buildings are platted to be condos, so that the owners can convert if the market and laws are favorable at the time. Pushing this to happen is the challenge.