Archive for November, 2011

Nov
20

Co-op Maintenance Fees Are On The Rise

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Making up 75% of all housing stock in New York, Co-ops are the most common type of housing excluding rentals.  The average co-op maintenance fee in New York City climbed 19% from 2009 to 2010 to $1.76 per square foot per month, according to Miller Samuel, a Manhattan-based appraisal company that tracks maintenance costs.

Maintenance fees  usually cover debt service for the underlying mortgage, property taxes, maintenance, personnel and other items.  These fees are usually apportioned per share of stock in the corporation, and are in addition to the owner’s individual mortage (if any).  A review of a co-op’s financial documents will give you the breakdown on the expenses.

What’s behind this increase?

  • Property Taxes:  New York City Property Tax revenue increased 9.68% in 2009 according to the NYC Department of Finance.
  • Utility costs:  Natural Gas and heating oil costs continue to increase. Water costs are up slightly.
  • Building Staff. Salary and benefits, usually renegotiated under union contracts every two to 3 years. 
  • Insurance Costs:  Varies by building and location, usually covering liability and disaster damages
  • Building upkeep, including major repairs to plumbing, electrical, heating and the roof.

What can the Board do?

  • Cancel or delay discretionary projects
  • Request several estimates for upcoming projects.
  • Refinance underlying mortgages.
  • Impliment a flip tax.

When faced with rising costs, there is little a co-op board can do but pass the costs throught to the shareholders as either increased maintenance fees or temporary (or permenant) assessments.  The decision to raise maintenance fees ultimately rests with the co-op boards.

Inspired by Smart Money article by Annamaria Androitis.

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Nov
10

In Recent News

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10/31/11:  From The Real Deal:  Related to bring cancer center to controversial UES site:  “The Related Companies is bringing a state-of-the-art cancer treatment center to its Upper East Side development site” currently occupied by Rupert Playground.  Read more about it at The Real Deal

  11/3/11:  From The New York Times:  A City Shrinks, or So the Census Says:  “According to its latest calculations, New York City has shrunk by more than two square miles, or the equivalent of Central and Prospect Parks combined.”  Read more about it at the City Room Blog of the New York Times

11/6/11:  From the New York Times:  Salvaging Abandoned Bikes, Making Room for Others:  “No firm numbers exist for how many bicycles sit abandoned in storage rooms around New York City. They decay uncounted in dim basements, mixing awkwardly with sleek new city cruisers and carbon-fiber racers, threatening to turn an increasingly marketable real estate amenity, the bicycle storage room, into something like a bone-filled catacomb.”   Read more about it in the New York Times:  11/08/11:  From Crain’s New York Business:  Cuomo council seeks to boost city tech campus: “Group established by Gov. Andrew Cuomo proposes state aid for plans to build a graduate school or schools in NYC. Other projects include Hunts Point market and green manufacturing facility at the Brooklyn Navy Yard.  Read more about it at Crains’ New York

Categories : In The News
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Nov
08

Congress Restores FHA Loan Limits to previous levels

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As we reported in May,  the Federal Government backed new mortgage lending limits program expired in September, 2011.  This week, the U.S. House and Senate voted to restore the FHA loan limits to the previous maximum $729,750.  According to the National Association of Realtors, this will help provide stability to communities as credit restrictions continue to prevent some qualified buyers from becoming home owners.

The restoration of the limits only apples to FHA mortgages, not Fannie Mae and Freddie Mac, which also expired at the end of September.  The conforming loan limit for these two secondary mortgage market companies will remain at a maximum of $625,500.

While this may be good news for many markets, in Manhattan, where over 70% of the apartments for sale are Co-ops, it probably won’t make much difference.  Most co-op boards require 20-50% down payments and higher income to debt rations (25-30% maximum debt to income).   Lenders for most condos are asking for at least 20% down payment to qualify for a loan.

Excerpts from Daily Real Estate News, November 18, 2011

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Nov
05

Childproofing: Get Down on Their Level

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 It’s every parent’s worst nightmare; an accident harms your little darling, especially a preventable accident.  Outlets, dresser drawers and cabinets filled with chemicals are child magnets.  Being naturally curious, a child will explore everything with their hands and mouth.  Choking, shock and strangulation hazards are everywhere.

 Some advice from the experts:

  • Start before the child comes
  • Get down on their level.  Crawl around on your hands and knees and see things from a child’s perspective
    • Outlets:  use outlet covers with horizontally sliding doors.  Easy for parents to use, don’t need to be removed and reinserted.  Check out Safety 1st Swivel Outlet cover about $2.25, or Levitons Decora tamper-resistant duplex receptacle, $2.50 at Home Depot.
    • Choking and strangulation hazards:  Cords on window treatments and power cords.  Secure the electric cords out of reach with Safety 1st’s Cord Short’ner, about $4.  Forego the venetian blinds for something that is completely cordless.
    • Secure the TV to the wall, a child reaching and grabbing could tip the TV onto themselves.
    • Secure furniture more than 30 inches tall with wall restraints.  Be sure to screw the straps into a wall stud.
  • With all the temptations in the kitchen and bath, toxic chemicals, sharp utensils, etc., think Operation Lockdown:
    • Use latches that automatically reset upon closing.  Safety 1st No-Drill Deluxe latch kit (about $31/set of 4) uses a magnetic handle to release the latch.  Once installed, keeping track of the handle will be the hardest part.
    • In the bath, get a toilet lock.  KidCo makes one that automatically resets and is relatively easy to clean (about $15).
    • Keep the bathroom doors closed and put child-proof doorknob covers on the knobs.
  • Stairs:  Use a child safety gate top and bottom. 

 While this list isn’t all inclusive, it gives you a good start.  Consider calling in a consultant.  Every home is different, and poses different potential hazards. 

 Based on New York Times article by Bob TedeschiOctober 26, 2011

Categories : Buyers, Fun Stuff
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