Stuyvesant Town Co-Op Conversion Reality

Stuy Town has 7.5m sft, so according to this article, the professionals are valuing it at $300 psf as a rental and $400 psf as a coop.

What does that say about the rest of the Manhattan market?

And should the price be higher as a coop than as a rental? Is that the additional monopoly profits available by evading the RS law? That seems a high--most studies of RS indicate that while it smooths out rent increases, competent landlords are able to achieve pretty much market rates most of the time, and we have not been in a major rent inflation period recently.

Or is it a judgment by these professionals that the bubble is still so strong that they can add 30% to price simply by having people rent money instead of renting apartments?

If the latter, expect continuing price decreases for a long time. Every rental property in NY valued at $300 psf is shadow inventory until coop/condo prices (for comparable quality) drop to that number.

the stuytown situation is quite complicated. most of the tenants in stuyvesant town have been in their apartments for multiple decades and pay nowhere close to market rent. it is just silly to say that "most studies of RS indicate that while it smooths out rent increases, competent landlords are able to achieve pretty much market rates most of the time." that may or may not be true, but there i no question that stuyvesant town has not been able to achieve market rents on these apartments.

the mostly middle-class, long-term tenants can only be enticed to buy their apartments if the monthly cost of owning the unit is roughly equivalent to the current monthly rent. since rents are significantly depressed by stabilization and control, you arrive at the low valuation. the proposal only makes sense for the bondholders if they can sell off the apartments that tenants don't buy, or that don't have stabilized tenants, at significantly higher ppsf.

If Stuy Town has 7,500,000 sq. ft., just paying off the 1st mortgage will cost $500/ft. The price/sq.ft.
##s being trial ballooned can be misleaqding because coop owners take subject to the property's under-
lying mortgage(s), which can significantly increase price/sq.ft.

Who the f'k said $500psf in nyc two years ago? Who was that thong wearing masked man?

I did I did - still hoping Hi dahling

Any thoughts on the latest developments in stuytown? Will the new owners lower the rents to fill up the bldgs. would that help in co-op conversion since they will need a majority to approve. Where's AR...

fait accompli dahling.... the longer you drag the better your deal.

julia, get your azz in the stuy town lottery. Just make sure you sign a long term lease at good rates.... it just gives you the "option" to buy. this is america, I don't think they can make you take title to something you don't want.....

julia
41 minutes ago
ignore this person
report abuse Any thoughts on the latest developments in stuytown? Will the new owners lower the rents to fill up the bldgs. would that help in co-op conversion since they will need a majority to approve. Where's AR...

where? She's on her other site, trying to mimic curbed and brownstoner

WW67thstreet...sounds great..

w67thstreet ' this is america, I don't think they can make you take title to something you don't want.....'

Actually in Obama's America the gov't absolutely can force you to buy something you don't want to.

so you like not having health insurance?? or you dont want health insurance??

if youre stuck with it now, just cancel it--step up--get uninsured while it's still an option

moron

more value to the owners in renting isnt there ?

well Wbottom, every justification for mandating that an individual buy health insurance or face penalty could be applied to housing - so how would you feel if the gov't mandated purchasing a home?

Huh?

What logic is there to support that statement?

here's the logic, CC:

many people would be choose to not pay $20k (inflating 5% or more) to insure their healthy family. They'd rather save the $20k, say $17k net after paying for some medical expenses, and self-insure. They figure that if something bad happens, they can pay the costs out of income (for most issues) or their aggregated savings of the (17k/yr + investment gains) for the unlikely serious health issue. The argument for forcing them to buy is that if they don't have the money to cover it they will still get treatment (we are civilised, after all), but the costs will borne by the rest of the taxpayers. If they had the insurance, the taxpayers wouldn't have to foot the bill, the insurance would.

Now, here on SE, many people are saying that rather than spend $4k to lock in 75% of their housing costs, with the mortgage fully paid off in 30yrs, they'd rather spend $3k on rent. If rents increase modestly, they can afford those increases from their income. If rents increase drastically, they will have acquired enough through the $12k/annual savings (+ ROI) to cover those rents through retirement. Now say something serious happens - a job loss, an illness or injury which prevents them from working at all or near to their potential income, or their costs incurred from the disability swallow large portions of their income. They no longer have the money to pay for rent. Now what happens? Again, since we are civilised, we have programs which subsidize or cover rent for seniors and other low-income folks. so the taxpayers are forced to foot the bill.
Now, if the person had bought, they'd have that house paid off at retirement. They have options - 1) their mortgage payment is gone, so maybe they can still afford the costs of housing (maintenance and property taxes). 2) They sell their place and use the money for a smaller house or rent. 3) They do a reverse mortgage to extract equity, using the money to pay the maintenance and taxes and remain in their home. The taxpayers don't have to foot the bill.

I can't imagine that anyone who thinks that healthcare is a right for all would think that housing isn't a similarly a right. So how about it? Obamahousing for all!

Hopefully you're trying to make a joke?

only the last sentence.

Insurance doesn't work as a financial concept unless everyone is obligated to participate. Housing is completely different.

hmm, tens of millions have health insurance right now and it works as a financial concept. ditto life insurance, disability insurance, co-op insurance, homeowners insurance, etc.

once you go down the road of mandating the purchase of a product on the basis that there is no such thing as 'inaction' because society bears the downside of the individual's not owning said product (which is essentially the administrations argument in the courts right now), you open up quite a can of worms. you may like this particular worm, but be wary of the next one.

yes indeed, tens of millions of people have health insurance. but, of course, tens of millions of people don't. and clearly the number of people who don't have it is only going to go up unless something is done.

the idea that people who have a pre-existing condition can't obtain insurance and that people who get sick lose their insurance is a travesty.

auto insurance is mandated for all drivers; yes, you can choose to not have a car and then not have auto insurance but you cannot chose to have a car and not be insured.

how can you choose to not be alive?

I recall studying the slippery slope fallacy in high school logic class:

http://en.wikipedia.org/wiki/Slippery_slope

I have yet to see a gov't program, tax or 'power' which has remain limited. We all know it only goes one way. Today you may be fine w/that because you like the policy and administration. Tomorrow you won't, and then you'll be crying about the 'fascists' running the country.

and the argument isn't about universal healthcare, its about giving the gov't mind-boggling power to compel you to do just about anything. i've showed you how it can be applied easily to one area (germane to this board), but I can come up with many others.

do you remember when auto insurance wasn't mandatory?

no, i don't.

are you joking again?

Printer: mandatory public health insurance is a fact of life in the rest of the Western world. Sure, the lines are long, there are rural-urban inequities and yep, they won't do things like Pap smear a woman at 80 (OMG, health rationing). But it is great for catastrophic illness and emergencies. In addition, some countries have supplemental private plans.

And you know, I'm an "owner".

ok, so it is. what does Canada or France having universal healthcare have anything to do with a US mandate to purchase insurance from a private health insurance company, or risk fine and/or jail? Good for them, I suppose. I prefer to make our laws in accordance with the Constitution of the United States.

and no cc, that's not a joke.

"I have yet to see a gov't program, tax or 'power' which has remain limited. We all know it only goes one way."

Fallacy. Ever heard of the 18th amendment? The Margarine Act of 1950? How about the Telephone Excise Tax Repeal Act? Federal income taxes were repealed twice in the 1800s.

great point. there are hardly any taxes/fees when i open up my verizon bill. and the tax code is so simple, i fill out my return in 10 seconds - the gov't has hardly used that to engineer social policy.

but yes, i do take solace that the margarine act and the 18th amendment paved the way for the inevitable repeal of Obamacare.

so printer, here's how it worked in the good old days.

you're driving down the road and you get rammed---your car is totaled through no fault of your own. the other driver didn't carry insurance because he didn't have to. there was neither mandatory insurance nor no fault insurance. unless you carried comprehensive coverage, you're shit out of luck.

while, i'm on the subject....how do you feel about motorcycle helmet laws? a lot of people claimed that they were a slippery slope to government rule as well.

and, still wondering about your thoughts on insurance company's dropping coverage on sick people. does that work for you?

no, not out of luck - you could always sue the person at fault. if he had no assets, then s.o.l. but of course that is no different than any other risk you have - for instance if you accidentally fire a gun and it kills me, i have life insurance. my family can of course sue you, but if you don't have any assets or insurance, it doesn't much matter, does it? that's why i insure myself. How about we make personal liability/umbrella policies mandatory for everyone? at any rate, auto insurance IS different because you are an active participant.

helmet laws, and mandatory seat belts (for non-minors) are ridiculous. if you want to take that risk on, it hurts no one but yourself. i don't really care if you die as the result of head injuries from a motorcycle crash when you refused to wear a helmet.

i think that insurance companies should not be able to drop coverage on people who became sick while they were policy holders. I never understood it, and don't know why state insurance commissioners have allowed it. a life or disability insurance company is not allowed to change your risk classification (to the downside, outside of omission or fraud) once a policy is issued.

now answer me this: what is so unique about health insurance that it, and only it, is subject to such a forced-purchase requirement?

the expense, of course. the more people that pay in (particularly young and healthy ones) the less it costs for everyone.

the median wage in the country is approximately 50K? how much can that individual reasonably afford for health insurance?

much less than it currently costs.

that goes for just about anything without a fixed supply - the bigger the market, the lower the price. and especially for anything with risk-sharing. so perhaps all insurance should be mandatory, and loans should be mandatory as well.

maybe we should pick a mandatory uniform - after all warm clothes are every bit as vital as healthcare - imagine the economies of scale if one outfit is produced for all 300mm people.

and no one is challenging the constitutionality of providing gov't subsidies or credits to purchase health insurance for those who want it but whose incomes are too low to reasonably afford it. they may challenge the wiseness or affordability of the policy, but not the constitutionality of it.

When this board turn into a imbecile ranting board? IT's RE and that is going down quicker than the racist teabagger party!

Are you naked and in the presence of children?

once again, i would like to thank SE for the 'ignore this person' feature, and I would remind them that epithet and insult hurling are detrimental to their goal of making SE the go-to site for good people seeking quality info. CC and I have managed to have a back and forth where we clearly disagree, yet neither has engaged in the degradation of tone that W67 always brings to (or rather detracts from) the conversation.

i will only respond to constructive, reasoned arguments.

I don't understand, is the person you are having a back and forth with on streeteasy's auto ignore list?

i unhide CC - i don't find her/him offensive. i like that i can just ignore w67 - its exactly what i'd do in real life.

So you stay away from w67 and you aren't even under 18. Interesting.

printer... it's not personal. It's just ppl like you get my blood boiling. Imbeciles who think that by their 18bday somehow their voting right equals "intelligence" on a subject.

By your slippery slope logic, the ending of slavery just opened the floodgates of federal imperialism, abortion rights, gay rights, etc etc etc...

as was so relevantly pointed out by CC, auto insurance works bc of participation. Even then we have assigned risk pool for the fact we have uninsured motorists. So here we are with ppl that are healthy "self" selecting themselves out until... wait for it, wait for it... until they get SICK. You know get hit and run by an uninsured motorist. Now since you've opted out of our "program." I hope your private ambulance, the hospital and doctors are all on YOUR payroll and can aid you in THAT city, at THAT time and At your convenience.

coat=apples=jewelry=cars=healthcare? I would've eaten you alive in HS debate.

When you in the presence, is it "personal"?

Speaking of 18th birthday and your high school, at the age of 18, it was no longer appropriate for you to be nude around people under 18.

on the subject, my friend got sick while backpacking in japan. Jewish/american kid. bill = $0

So if you travel to paris and are lying on the side of the road, bc you are not Frenchi, by your logic you should not seek nor get any help.

just keep carrying your logic to its logical conclusion. And you are right, in REAL life, I'd nod and simply walk away from an imbecile like yourself with a half pregnant policy thought.

If you go to Japan today, and your temperature when leaving the plane is above normal, you will be flagged before you even get to the Immigration officer.

Also, Japan doesn't like grown men naked in the presence of children.

i will only respond to constructive, reasoned arguments.

Actually, I found W67's point cogent, succinct -- very well reasoned. Plus his colorful style adds some well-seasoned flavor to many tired arguments. While many might find his comments rather risque, you have to admit the bar for "unacceptable" took a topflight leap higher when our esteemed Republican candidate for governor, Mr. Paladino, sent pictures of bestiality across the internet.

But Paladino has only been in the news in the past 6 months or so.

This was about stuytown...let's get back to that please or else start another post..Also, w67th always have great points and is very funny...don't push him to leave like you guys did to AR..there won't be anyone left

anyone?

julia, how has w67thstreet's funny helped your housing situation?

AR, CCCharley...hope you see this...the stuytown website lists one bedrooms for $2626..I called and they said the apartments are $3k...are you hearing anything why the difference in price or if they are going to loosen up the unrenovated apartments..

three grand for a one bedroom is not a deal, unless it has at least two out of three specail criteria( 1)very large space, 2)water or park view ,3) high floor.

none of the above...it's no deal at all.

Btw, 11 thousand condos or co-ops added to Manhattan inventory instantly. Gonna be interesting.

OF COURSE its not the same as truly new inventory, it will just shift renters to buyers, but remember the co-op conversions that folks like SteveF pointed out in the 80s as evidence prices wouldn't drop.

Julia - maybe they aren't including the free month factored in.

They said the only apartment available is $3k and no free month...yet their website lists the apartments at $2625.they also do not take any applications...i'll keep trying..my current lease isn't up until Feb.1.

Guess they had one at that price - it rented and that's what they have left that they will rent. I think they are definitely warehousing the apts bc there are lots of empties

I agree...I think they are def. warehousing...when this place converts to co-op, which it will because that's the only path that makes sense for the debt holders, they'll be able to sell the vacant apartments at market rate to help offset the insider prices.

don't they need a % of renters to get approval to make the apts. co-op...i'm hanging by a thread.

julia, they have no chance in hell of a conversion unless they get a certain percentage of renters to buy their units. they have no incentive to rent the units with the lowest legal allowable RS rents. they will simply offer those units to insiders who want to move for either location or size.

the units that are eligible for higher RS rents are being renovated and rented at those higher rates. but very few are moving.

yes, they will need a large % of residents to buy in order for the conversion to work. The Tenant Association's firm is currently working on providing each tenant a rent vs. buy cost analysis, including common charges to lay everything out for them. The only way people will jump on board and purchase apartments will be if their costs are apprx. equal to or slightly more than what they're paying now as renters...hence Gutterman's plan to sell these at about $290 a sq/ft (of course, location, floor, renovated vs. non will have to be factored in). This will happen. Why? Because it's the only financially viable plan for both the debt holders and the tenants. In addition, this will satisfy a large % of resident's desire to control their own destiny and avoid another preditory landlord.

I think people unfairly knock Stuy Town...yes, it's utilitarian looking, some of the students are a pain and filty, and some of the buildings are far away from first ave. However, the apartments are big by NY standards and most of the complex is conveniently located only 3-7 blocks from Union Sq and the east village.

In addition, what people oddly fail to mention is that it's probably the single best place to raise a child in Manhattan. Where else, except for Battery Park, can children actually play on grass, and play without having to have their parents 5 feet away from them out of fear of going into the streets, etc.

Lastly, the area is zoned for a very good public elementary and middle school.

yoyoyo, most of the complex is zoned for a good school, but i believe the southern portion of the complex is not so lucky.

Hoy! I think the UWS is a pretty fine place to raise children, as far as urban settings go. Be good to spend a year in the Arctic :)

AR,yoyoyo...since you're both saying they need a certain % to convert why wouldn't they want to rent as many units as they can at at lower, or somewhat lower rent just to beef up their %...most of the long term tenants will probably not buy if they are paying such low rent they would vote no...am I wrong?

Julia...I think they're warehousing apartments so that if and when the conversion happens, they can sell those at market rate...say $700 a sq/ft. If they fill too many of these empties with tenants, they'll have to sell them at insider prices.

Julia - I think because the vacant units don't count, so it's a wash whether they're rented out or not.

AR...you are correct about the southern portion.

Yes, and remember it's the same price/sqft at the time of conversion. After the conversion, diff. story.

nyc10023, you would be incorrect. so a sponsor with 99% of units can declare itself effective and force the 1% to be co-op owners?

I don't know too much about conversions, but the law is with the RS/RC rental, look at the carve out next to bloomingdale's ... now that was freaking hilarious.

And once again, may i remind the readers, $300psf largish units on 14th street WILL have NO NO NO effect on the CPW C6... my unicorn needs to get out of my closet more often.

I was just looking up the % - calm down. It's 15% of units for non-evict co-op. But the question as to why the warehousing, I'm not sure if the 15% automatically includes vacant units.

Say 100 units.
10 vacant. Does it need 5 occupied units to say yes? Or is it 15% of 90? I think it's 5.

W67: ready for you to eat your hat.

And I'm not sure what you mean, the 1% in your example can remain RS tenants. Not forced to own, and in the case of Stuy/PCV, is it the case that the X% who don't buy go into the pool of perpetual rental RS units?

w67...while I agree with you that if such a large number of low price units flooded the market at once, it would have a tremendous impact on area prices. However, i think this is a little unique in that a large # of people who will be buying these units at insider prices would not normally be those that are in the market for higher priced units. what do you think?

as to the point of "inventory"... if you rent units low enough, ppl will opt into a coop conversion. Now as current RC renters who do not want to be "owners" wouldn't you have a case if you saw the sponsor filling it with very very very high rents trying to induce (julias and new market renters) into a pissing match against the old timers who would rather stay "renters."

This is one clusterfk, that is gonna have some serious consequences to "govt/private" developments going forward.

Does anyone think i should rent at $3k a month (way above my comfort zone) to get the insider price?

BUT EVERYONE IN STUY, the longer the deal goes, the BETTER you negotiation position. YOU pay below mkt rent..... everyone else is carrying your belowmarket rents..... what a GREAT position to be in, every month you get more cash, they have less...... fk I wish I was in Stuytown!

Julia...well, that depends how far above your comfort zone. If you can afford it AND if this is a place you'd like to live for a while, then yes. Maybe look at as "what if the conversion does not happen. Can I be happy here?"

julia, if an RS unit is renting at or above market rate it makes no sense for them to try to sell the unit. yes, some people who rent the overpriced apartments may buy them, some not.

your renewal isn't until February, no? i think it's too early to say what might happen later this winter in terms of rents.

yoyoyo, certainly some people leave (even RS apartments, i've known quite a few who did) to buy elsewhere.

youyouyou, if i told you stuytown north (cpw and 97?) offered to sell condos to any stuytown insider at $100psf, would you bite?

nyc23, some tobasco w/ the hat. but the fact remains, there is that one tipping point unit.... and weird things start to happen with tipping point edge, look at the teabaggers... they make up less than 1%, but they are pissed and ready to vote.

AR...you are correct, some tenants will leave to buy elsewhere, but many can't afford to buy at market rates. Many people in stuy town, can however, afford to buy at the proposed insider price.

W67...re: cpw and 97....it depends, I'd have to have more information about the building/units...condition, size, common charges, etc. If they were somewhat comp to Stuy town, then yes.

W67, don't bring politics into this, please. I have the sense that the long-time renters are not displeased with the turn of events, and some might even buy. 15% seems attainable, especially if the vacant apts are counted as part of the 15%.

Julia: it boils down to if you want to be out 12k/annually (your current rent is 2k right?) for the option of buying at what, 300/sqft?

10023, 15% will never send this complex coop. the numbers just don't work.

I agree with AR...from what I've read, 50%++ buyer participation is needed for this to work.

No, I mean the legal minimum to get conversion effective is 15%, not the economic minimum.

NYC10023....regarding "...Not forced to own, and in the case of Stuy/PCV, is it the case that the X% who don't buy go into the pool of perpetual rental RS units?"

That is indeed correct from what was explained at the tenants assoc meeting last week. This is being done to help satisfy (at least partially), the a number of tenants' desire to maintain some form of permanent affordability.

My tangential concern is that the waiting list (and selection from such) for those units be kept transparent. And the other thing that has not been addressed is succession rules. Normal RS units can be handed once without incurring the vacancy increase. Will these RS units work like those?

did you get the feeling the new owners would rather have it go co-op or keep it a rental at the higher RS rents..considering the higher rents aren't attracting renters it's confusing to me why they won't drop the rents somewhat and see what happens..your thoughts on this.

10023, many things have not been addressed yet. they are trying to broker a deal. these are early days, CW Capital just got control a couple of weeks ago, and there's still no guarantee that a lawsuit might spring up from some debt holders. but the bottom line is that CW Capital seems to think it behooves them to cooperate with the TA, and this TA is damned serious about long-term affordability of the RS units and giving people the choice to remain RS or buy.

julia, you have to remember there is no deal yet. CW Capital is acting in a manner that furthers its interests given the CURRENT situation. that doesn't mean that things couldn't change as a deal comes much closer to reality. the rent is currently set by RS law.

many tenants don't care what happens as long as their RS status is maintained. others will want to swap their current units for nicer or less nice but cheaper units. the more expensive RS units will also command a higher price, so maybe CW capital hopes that some insiders buy them and then they can up the rent on the cheaper RS units via vacancy increases and passing on costs of renovation.

this is an extraordinarly complicated deal.

Julia...the new owners (the holders of the senior debt) want it to go co-op as it is the ONLY way for them to recoup their investments (or a portion of it). As we saw with Tishman, the rent rolls, especially now that they've been reduced to being rent stabilized as a result of the J-51 roberts case, do not cover the mortgage and interest of the loans.

Again, they are not dropping rents because 1) the don't have to...walk by the rental office--it's always crowded and 2) when the complex converts over (probably late 2011/early 2012), they can sell those vacant apartments at market rate ($700 sq/ft) vs. at the insider rate ($300 sq ft via Gutterman plan). Make sense?

yoyoyo...i thought people weren't renting at the high prices but i guess i'm wrong...

w67thstreet
about 3 years ago
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Member since: Dec 2008
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Who the f'k said $500psf in nyc two years ago? Who was that thong wearing masked man?

When will this happen?

maybe tomorrow?

my bad... on a sprint/apple adjusted basis NYC RE is trading right around $.10/psf based on my 2000 sq ft needs.... It fking down right cheap....

hey fiesdchester.. can you bring up that brooklyn wacko broker thread?

Come on I know you know... if you don't ask one of you SE "friends"...... hahahahahhahaaaaa

Brooklyn wacko broker sounds like a fun thread. Is this about the broker AR used to buy her place in Williamsburg?