Coyotes Occupy Abandoned West Hollywood Condo: A Glimpse into the U.S. Condo Market Decline

Residents of West Hollywood are unsettled by nighttime noises emanating from an unfinished condo at the corner of Spaulding Avenue and Romaine Street. The sounds come from a pack of coyotes that have taken over the stalled construction site, now called “coyote condo.” Initially intended as a four-story, 22-unit residence, construction began in 2017 but halted years ago. The condo’s social media presence hasn’t seen updates since July 2022.

What began as an eyesore has become a source of frustration due to the disturbances caused by the coyotes. This unfinished condo narrative reflects a broader issue in the U.S. housing market: the fading presence of condominiums. This decline complicates homeownership options for many Americans.

Understanding the Condo Market Decline

Historically, single-family homes dominated the U.S. housing market, as Chen Zhao from Redfin explains. Condos only became significant in recent decades, providing an affordable entry into homeownership. By 2000, multifamily buildings with five or more units, including condos, rose to 17-18% of housing stock. In some regions, like Florida, condos could account for 30-50% of listings.

However, the condo market began declining after its peak in the 2000s. Joel Berner, an economist at Realtor.com, notes that demand has softened, and construction has slowed. Rising condo fees and insurance premiums make condos less cost-effective, leading to struggles in selling units.

According to Zhao, the last significant condo boom ended with the 2008 financial crisis. Construction defect liability laws posed a deterrent, allowing condo owners to sue developers long after project completion. These laws contributed to a shift towards rental apartments instead of condos.

Regional Disparities and Challenges

In Colorado, condos formed 20% of the new housing market in 2005 but represent only 2% today. The 2021 Surfside collapse in Florida further tightened reserve and inspection requirements, increasing insurance and HOA costs. These factors hindered new condo construction, especially in regions like Florida.

Zoning laws add to the construction difficulties. Much land available for housing is zoned for single-family homes, making condo construction illegal. High land costs in urban centers and “Not-in-my-backyard” (NIMBY) attitudes also contribute to the scarcity of condos.

Zhao mentions that NIMBY opposition complicates the permitting process, affecting smaller developers more likely to build condos. Despite upzoning efforts in states like California, legal and insurance issues push developers toward rentals instead of condos.

Impact on American Homebuyers

Condos historically offered an affordable alternative to single-family homes, serving as an entry point for first-time buyers, retirees, and those priced out of single-family markets. Berner warns that the decline of condos risks prolonging renting periods, especially for younger and middle-income buyers in urban areas.

This reduction in condos skews multifamily construction toward rentals, decreasing the national homeownership rate, particularly in dense coastal metros. Lack of condo availability affects affordability, widening the gap between coastal and Sun Belt regions with available single-family homes.

The shrinking condo market could hinder home equity building for future generations. Loss of condos also impacts environmental sustainability, as multifamily units are generally more resource-efficient per resident than single-family homes. This shift may result in increased emissions and further urban sprawl.