Maintenance and Repairs

July 12, 2024 Published by Golden Horseshoe Chapter - By David Heska, Sarah Asmat

Aging Condos and Shrinking Dollars

From the Volume 20, Summer 2024 issue of the CCI GHC Condo News Magazine

Our buildings are aging. All of them — and condominiums are no exception. In cities such as Hamilton and Toronto over 25% of the buildings were built before 1960 and over 60% of them were built before 1980. These buildings are now reaching critical milestones where large capital repairs are required, leading public sector leaders unsure how to maintain a state of good repair and condominiums unsure how to proceed. Being a well-educated condo Board member and working together with trusted engineering and trade partners is crucial when planning and implementing these major projects.

It is well documented that many of the common problems do not show up until the 15 to 25 year mark. There are various components that will need to be replaced like concrete balconies, guards, windows, roofs, and cladding components. For mid and high rise buildings the interior components also will require renewal including plumbing, electrical and HVAC systems. Having an adequately funded reserve fund is critical so that when these projects arise your condo has sufficient funds to be able to complete the work.

Here are a few sample projects that you may be planning for at your condo.

• Balcony repairs. They can be expensive, disruptive and require a high level of coordination. In newer condos we have seen a trend towards more precast concrete as opposed to conventional reinforced balconies. Whatever type of balconies you have, it’s important to understand how your balcony guards are secured. Are the anchors embedded into the slab? Are the guards secured through the front vertical face of the balconies?
• Window replacement. These projects have grown past ten years. Living through a balcony repair project can be frustrating and noisy for residents, but when entire windows are removed and replaced the project can be even more intrusive. Planning and effective communication of the schedule during window projects should be a top priority.
• Roof renewal. Your townhouse shingles will degrade as a result of ultraviolet exposure and age, some may also have blown off and renewal will be required. We have seen initial “builder” shingles last less than ten years, much less than the typical service life of twenty to twenty-five years.
  A lack of adequate soffit ventilation is also a common issue that may cause ice damming along the gutters requiring inspections to determine an appropriate solution to the problem.
  Flat roofs have similar issues. When replacing built-up roofs or modified bitumen membranes there are several factors that need to be considered such as the details at the upturns, mechanical units, set-up locations on the property, etc.
• Parking Garage Repairs. More and more we are seeing condos prioritize the renewal of their waterproofing membrane. This helps prevent salt penetration, steel corrosion and concrete delamination. It is much more costly and disruptive to replace concrete then to periodically renew the waterproofing.

Now that we have covered the aging condos portion, let’s turn our attention to the shrinking dollars side of the equation. Planning for upcoming building repair projects has never been easy, but in the midst of uncertain economic times it’s even more important.

Additionally, having a properly funded reserve account—and in turn, some buffer and flexibility—is critical. We have all heard over the past four years about the inflation rollercoaster we have been on. We hear the general inflation rate regularly reported in the news having fluctuated from 2% to as high as 8% and now back down to the 2% to 3% range. However an additional measure some in our industry have been referring to is the residential construction price index (RCPI). In fact, RCPI has gone up at a much faster rate than the generally reported inflation rate.

According to Statistics Canada the residential construction price index in Toronto went from 111 in Q1 2020 to 203 in Q1 2024. An 83% increase! The average for all major census metropolitan areas across Canada over the past four years has been over 60% increase. In other words, construction inflation has been approximately 15% per year.

The good news is this inflation number has peaked and is decreasing, however the impact is still being felt by condominium owners across the province. Here are just two examples: In a recent study of a 144-unit condo built in 1975, we found that they needed a 44% increase spread over three years for projects planned for 2031-2033. This was primarily due to a window project that jumped in terms of cost, as well as other inflationary factors that needed to be considered. The total Reserve Fund contribution was around $5,000 per unit per year. Ten years ago it was common to hear numbers in the range of $2,000 to $2,500 per unit per year, but not anymore.

In another study done of a 75 unit, well-funded, townhouse complex built in 2008, we found they needed an increase of 20% spread over three years. This meant getting total Reserve Fund contributions up to $300,000 (or $4,000 per unit per year). Even as a well funded condo, these 7% increases year over year impacted residents pocket-books.

So where do we go from here? A final recommendation is to plan ahead. The next time your Reserve Fund Study is updated pay attention to how much the various project budgets have increased and if the increase is less than 5%, it’s probably under-estimated. And if your condo has a project planned in the next five years, you should be hiring an engineer to complete a condition evaluation to assist in developing an appropriate scope of work for the upcoming project.

David Heska, P.Eng., LCCI is a Professional Engineer and the Southwestern Ontario Director with WSP. He is an active member of CCI and over the past 16 years has worked with many condominiums on capital repair projects and reserve fund studies. He can be reached at David.Heska@wsp.com

Sarah Asmat is completing her undergraduate degree at Toronto Metropolitan University and is a Building Science Consultant at WSP. She can be reached at Sarah.Asmat@wsp.com