New York City
Northern New Jersey
Search Better With
Shop for a Broker
Open House Planner
Saved Listings & Folders
Stats and Figures
Manhattan Condo Market Index
I know this has been covered in past threads in previous years, but I haven't seen anything yet for 2012. Can anyone share what maintenance increase they anticipate for 2012? We're in a ~60 unit co-op looking at a 5% increase, which leaves very little cushion in our operating budget, but our reserves are high. Anyone else have insight to what your bldgs may experience?
Why so high? what's gone up 5% or more YOY that impacts buildings costs?
We're a 58 unit coop and our increase is 6.5%.
Our RET are up 6% which represents about half our operating budget. So that alone is 3% of the total increase. A handful of other things are up here and there, but taxes represent about 60% of the cost increase. Our agent said most of her bldgs are in the 10% range for 2012.
Not sure if city taxes have increased this year, but one thing that is looming is a potential expiration of the STAR rebate 1/2 way through this year. That means for coops that collected the rebate as an assessment, they will be down a significant chunk of change that they've been able to count on for many years. The more prudent course is to plan a budget without those funds and if the program is extended to consider it unanticpated revenue. Heating costs also continue to be killer high.
All buildings will pretty much be having to change their heating systems very soon from one grade oil to a cleaner one and ultimately to gas. This will have to be funded and different coops will obviously have different approaches to how this will be done.
From what I understand, 5% increase is well within range of what will occur in GV/Chelsea area coops this year.
No increase for us. We're a micro building with individual HVACs, so our maintenance is just mortgage, taxes, insurance, water, a little bit of common electric, and paying the guy who takes out the trash.
I was proud to tell our shareholders that this year's increase was only 1%.
This follows increases of 1.3% in 2011, 0.75% in 2010 and 0% in 2009.
Our RET are up 6% which represents about half our operating budget.
so much for the CPI
Matt - doesn't that mean your taxes aren't going up which means your property value isn't going up?
I'm not entirely sure what it means. I was given the budget for review, was told there was only a 1/2% shortfall for 2012, and we voted to boost by 1%.
@kylewest, we're taking a wait-and-see approach regarding the STAR rebate. If it is not extended, we may be looking at a further increase mid-year to offset the funds we typically get from this. For us, this represents about 8% of our annual operating budget, so it's not a small chunk of change at all.
>>Why so high? what's gone up 5% or more YOY that impacts buildings costs? <<
Ours is going up @ 4.5%
Natural Gas prices have been declining for years. Are these buildings uising heating oil?
Just found out we're at zero percent increase.
[Matt, cover your eyes now.]
I'll probably tip the staff more than I had originally planned, as a result of extra dollars in my pocket.
[Matt, open your eyes now.]
I'll probably also tip restaurant waitstaff a little better this month too, for the same reason.
Ours is not going up because of extra proceeds from refi, but they should be up 5% based on higher real estate taxes abd utility costs.
Upper East Side, ordinary 60's 20 story bldg. Maintenance up 9% (after 7% last year). Energy rebate will be retained by coop instead of given to shareholders as in the past. Storage fees nearly doubled, bike racks more than doubled.
We're new to NYC real estate market and are looking to buy in midtown west. Will anyone in the process tell us truthfully about increases in building fees and pending assessments? Are they obligated to disclose these things before purchase? Anything else we should know as newbies that might be useful information before we make any commitments? Thanks.
Lucid, my building used to have free bike storage, now there is a fee. Fees for regular storage have gone up as well, those nowhere near double. Methinks this is an easy, and relatively harmless, way to increase the coffers. Relatively harmless in that those who really have the need, and can afford it, pay for it.
earo: a lot of coop boards began using the STAR rebate "assessments" for operating budgets. Since this is not a reliable "forever" source of coop income, using it to balance the operating budget was never a great practice. But for some it made sense. The rebate assessments by these coops may have started at a time that the coops were facing various capital projects, rising labor costs, rising fuel expenses, etc. So to minimize the amount maintenance had to be increased and thus preserve value and reduce impact on the shareholder's monthly maintenance fees, the STAR rebate was directed toward operating expenses. The better practice, though, was for the coop to assess the STAR rebate and put the funds into the reserve fund. For whatever reasons this wasn't done, it wasn't an ideal solution. Now, with the rebate slated to expire, some coops are just phasing out their dependence upon the rebate to balance the operating budget. If the rebate is extended, it can pad the reserve accounts. But for longterm planning and developing a reliable annual budget, it is a good time to bite the bullet and wean the coop from relying upon the rebate. Yes, you can readjust mid-year if necessary, and many will choose to do so, but the more conservative approach is certainly to stop using an assessment for operating expenses. That is the course my building has chosen to take. Even so, the annual maintenance increase has come in at just under 4% which is pretty good and on the lower end of the range in my area for comparable full-service coops.
It's always more politically palatable to scale back a deduction/rebate/subsidy than to raise rates.
Lucy, it may be easy, but it irritates people and doesn't do much. They'll cover maybe $20k of a $450k shortfall like that.
"Ours is not going up because of extra proceeds from refi, but they should be up 5% based on higher real estate taxes abd utility costs."
When you say "extra proceeds from refi", do you mean that the co-op's monthly mortgage payment is lower now, thus leading to the extra proceeds on a monthly basis, or did the co-op opt to keep monthly payments the same and take extra cash out, thus leading to a lump sum of extra proceeds? If the former, that's a smart refi. If the latter, and the lump sum cash out is being used to cover the budget shortfall, then that's an absolutely terrible idea. Using the proceeds that way, rather than placing them in a capital reserve, would be foolish. Sooner or later, those funds will run out, and the co-op will have nothing to show for it. At that point, you'll have one heck of a deferred maintenance increase on your hands. This is the same kind of mentality that contributed to the real estate collapse - people doing cash out refi's and spending the money on cars, clothes, electronics, etc.
I do hope that it's the former for your co-op.
kylewest: you've been referring to the STAR rebate in this thread, but I think you're really referring to the state's Cooperative and Condominium Tax Abatement Program. The STAR (New York State School Tax Relief Program) program is much smaller in scope than the tax abatement program, but is often "re-captured" along with the much larger and more valuable co-op and condo tax rebate. The STAR program applies to single family homes, condos, and co-ops throughout the state. The Cooperative and Condominium Tax Abatement Program is specific to co-ops and condos, and is meant to address the inequity in real estate taxation between co-ops & condos and single-family homes. Just a clarification.
There has been talk of eliminating the Cooperative and Condominium Tax Abatement Program for years and years, but it ultimately never happens. This program's main benefactors are in the NYC area, the abatement is huge (typically amounts to a 17.5% reduction), and there's just too much political power in this area for it to happen. I'm not saying that it couldn't get eliminated in these economic times, but I really don't see it happening.
Our maintenance is increasing a hefty 8.6%. We don't have a flip tax or retail space. 84 apts. RET increase is $61K; labor contract increase $55K. We are hosed. At this point, we're looking to get out with whatever profit we can manage.
566 apts building 4.7% in 2012, on top of 4.8% in 2011 - 85% RE taxes
RE taxes have owners by zee balls. Complain to City Hall? Yeah, that'll work! Politicians waste taxpayer $. When it comes to wasting taxpayer $, I think the City Council is worse then the Mayor.
8.5% for 2012 in 150 or so apt building w/no retail. E60s b/t lex/3rd. 2011 was relatively low, I forget exact, maybe 1-2%, which board/agent was happy to cite to as justification for this year, but conveniently omitted 2009-2010 assessments for renovations which were lengthy and pricy. Seems mostly due to RE. High maintenance building already for what I get and building can't seem to keep their reserves above 150K. Questionable management.
NYRocks, the co-op kept monthly maintenance the same and took extra cash out. Part of that cash is being used to keep the maintenance flat when actual costs are rising while the rest will be placed in reserves for capital items. Our reserves are depleted because instead of passing through maintenance increases, the board dips into reserves to cover shortfalls. I believe all actual increases should be captured and passed through in maintenance; otherwise, there will be an ugly assessment down the road.
>>Our reserves are depleted because instead of passing through maintenance increases, the board dips into reserves to cover shortfalls. I believe all actual increases should be captured and passed through in maintenance; otherwise, there will be an ugly assessment down the road. <<
You are absolutely correct. Keeping maintenance artificially low by taxing reserves is a terrible way to run a building.
NYRocks: you're absolutely correct. I was getting sloppy. It is both the STAR program AND the rebate you discuss that is assessed in many (and my own) coops.
I'm going to partially disagree. If you have a debt-laden, cash-poor building, there is only so much you can raise maintenance before you make everyone's apartment unsellable. If you're in this less-than-ideal situation, sometimes the way out is to borrow more money but over a longer period of time and/or with more aggressive principal paydown. Borrowing an amount that will cover your projected non-recurring expenses over the life of the mortgage can be a lot more palatable (and IMO responsible) than raising maintenance to crazy levels, as long as you're going to end the term of the mortgage with less debt than you had prior to the refinance.
> If you have a debt-laden, cash-poor building, there is only so much you can raise maintenance before you make everyone's apartment unsellable
sure, it's painful. but long term it's the only way to go.
> sometimes the way out is to borrow more money but over a longer period of time and/or with more aggressive principal paydown.
this is the reason why you are in a debt-laden, cash-poor building. people before you tried to avoid making everyone's apartment unsellable by kicking the can.
Once you remove taxes which is out of the control of the building the only thing left is energy. One must spend money to save money. Are the buildings with the high costs not reducing their energy footprint? Don't tell me, oil burners and 50 year old furnaces?
> Don't tell me, oil burners and 50 year old furnaces?
those should simply be illegal or those buildings should be billed for costs associated with asthma.
sounds like more government regulation.
Once again, columbiacounty and I are in agreement.
"this is the reason why you are in a debt-laden, cash-poor building. people before you tried to avoid making everyone's apartment unsellable by kicking the can."
I think they learned this from our government.
> I think they learned this from our government.
or the gov is elected by people that kick the can whenever they can?
wait...where are all the SE posters who, a year ago, said they'd seen little or no increase in their maintenances then, and saw no sig increase on the horizon?
Let's say I have a debt-laden, cash-poor building where the maintenance on a studio apartment is $1,000 per month (high), and there are no expenses that can be cut. In order to start paying down principal and building up reserves, I would need to raise maintenance to $1,300 per month and assess everyone six months of maintenance. Do you think anyone is going want to buy in this building? The assessment will scare off buyers for at least a couple of years, and the sky-high maintenance will be a serious deterrent for a decade or more.
But, instead, I may be able to borrow additional money on a mortgage refinance to fund the reserves and use the current low-rate environment to refinance into a self-liquidating loan (or a longer term loan with more principal paydown) that doesn't cost much more. I may only have to raise maintenance to $1,150 per month, and I won't need to assess anyone. Yes, this may take 15-25 years to fully correct the problem v. 7-10, but in the interim, everyone has salable apartments.
It's clear to me that #2 is the more responsible scenario for your shareholders. When the salability of everyone's apartment is on the line, you cannot wildly raise maintenance or assess absurd amounts unless it is a last resort. Chances are that a board that did this would be voted out, and a new board would get the building into even deeper financial problems.
All of that said, I am absolutely against "kicking the can." But, to me, kicking the can would be taking out more money on a 7 or 10 year interest-only loan and assuming these low interest rates will continue forever.
Just a passing thought, but I have found that my coop is run by lawyers (usually RE) and I rarely see finance people on the boards I know. This is just based on my own experiences and talking to friends in other "good" coops it is the same. I wonder if that has something to do with it sometimes. I do have sympathy for boards' constraints in that many buildings have no source of income and that their only way to stay afloat is to either do a financing, cut costs (which are usually pretty thinly cut already), or raise maint/asses.
Yes!!!! Keep your eye on the ball. Your apt bought at the bubble is allz about salability! That Ferrari can be yours for the low monthly payment of $300/month for 45 years!!!!!
Want some feta with that! Flmaoz z z. Zzzzzzz. Sleep. Per chance to dream of no re borkers in my life.
"wait...where are all the SE posters who, a year ago, said they'd seen little or no increase in their maintenances then, and saw no sig increase on the horizon?"
Bottoms, our board meeting is this week. Will let you know if we increase maintenance.
sippelmc: certainly a couple of attorneys on the board is a good thing. One familiar with general litigation and some employment law is nice; a second with a strong RE background. But ideally a board should be balanced out with other skill sets like finance. Ours has a specialist in commercial and residential building financing. Someone with an engineering background is good for capital improvement issues. I also like someonoe with an acocunting background. The coops in which I have lived have had boards that are generally balanced in this way.
good to see you W67.
Agree that when one buys, one must also consider resale; RE can be ez to get in, but hard to get out. So, no dark 1st floor apts, no 421A/tax abatement time bombs, no weird white elephants.
oh plow jop, dont bother--your cred is shlt--you of the williamsburg building which has raised maintenance 1% since you bought at the peak--from what i gather, and from posts here, mntnces have been going up at an appx rate of 5%/year for the last 3
of course there are exceptionalists!!
hard to believe people said this & believed it. RE is the cash cow of last resort. Municipalities know/believe they can always milk RE for more tax cuz can't move RE out of the jurisdiction. And, in this political environ, RE owners are considered the 1%, so just tax the sheet outta them.
"taking out more money on a 7 or 10 year interest-only loan and assuming these low interest rates will continue forever."
who/why does anyone ever take interest only loans & particularly on a co-op bld?? horrible. IMO, one of the best things about a mtg is that it amortizes. And, yes, I understand why people take interest only mtgs, but IMO, it's usually faulty reasoning.
We just got hit with a 6% increase in maintenance + a 7k+ owner fee due in 1 or 2 installments for "hallway renovations".
For our 2/2.5 1400 sq ft condo our Maintenance will now be nearly 2K a month. I understand salaries must be paid and there are certain things that must be done but goodness it is getting harder and harder to swallow.
"from what i gather, and from posts here, mntnces have been going up at an appx rate of 5%/year for the last 3"
Oh, ok, so your asking about those of us who have seen minimal or no increases was a pointless exercise. I've never claimed that what's happened in my building is any way representative of the norm. I'm just telling you what's happened. Did we initially set maintenance a bit higher than we should have? Arguable, but the board's always been in favor of building up reserves to a healthy level. And fellow owners have to be pretty happy when they've seen flat maintenance for 3 years.
We are in a new condo building. No maintenance increase this year. We were amazed that the sponsor actually overestimated 1st year expenses and we had a surplus. Probably won't last. The 421a abatement also helps.
actually, plow jop, a very pointful exercise--point being it is highly unlikley you are full of anything but shlt
but then youre an exceptionalist
anyway, yes, monthlies for both coops and condos have been ramping hard--tough for owners
Bottoms, serious question - what's the point of lying on an anonymous internet message board? Even more serious question - do you check for the bogeyman under your bed every night? There's always a chance.
@angel6969. I often heard it said it gets easier after the first swallow.
Whatz up wbottom, yo dwell.
six seven---youre here---kinda the same aint it?
Will wonders never cease on SE. We have a talking ape, and Wbuttocks knows how to spell numbers.
I'm proud to tell shareholders that we will decrease in 2012 because our reserve is high enough. We decide not to hold too much.
same shit same ole... yep... but I just gotta take a dump on the NYC RE bubble once in awhile... sorta clear the pipes as it were...
and clamidia states "robbing paul to pay paul.. .is A O. K.!!!!"Flmaozzzz
Bottoms, you're going to have a conniption, I'm sure, but my building is once again not raising maintenance. We did talk about adding a small, separate, and temporary capital improvement charge, as we have some beautification projects lined up, but are holding off on that for the time being. But I'm obviously lying anyway, right?
plow jop, ill give you this one: your exceptionalist building hasn't raised monthlies since you bought at peak roughly 3 years ago
has your building ever raised monthlies??
Bottoms, I bought at peak what? Peak of the general market in Manhattan? Timing is pretty meaningless compared to $. I'll give you this: you're correct in terms of timing, but have no clue in terms of pricing. But we've been over this before: you don't think the rent-buy ratio is in any way possible. That's fine, but it's nothing more than a case of you burying your little grey head in the sand.
but...back to your maintenance.
have the total costs of running your building stayed the same for the last three years?
cc, yes and no. Some line items have increased, others have decreased. For example, we gave the super a pretty nice raise, and got a much better (but pricier) management company. At the same time, we've made pretty significant savings on electrical (which, as you might guess, is a pretty hefty expense for most buildings) by switching to more efficient lighting, as well as getting better pricing on an ESCO (mostly thanks to the new mgmt co). We also actually negotiated a slightly lower rate when renewing with our mgmt co. We also expect to see some smaller savings by cutting on postage and going to email for all the routine stuff, as well as some other admin changes. I imagine some buildings gloss over this stuff, but you can find real savings, as the little things can add up if you're willing to make efficient changes.
so, in total its roughly stayed the same?
and, we're talking condo right, so taxes are outside of this number?
you do realize (unlike riversider) that the cost of heating (either oil or better yet natural gas) has come down substantially during this period?
Yes, in total maintenance has stayed the same. And yes, condo, so exclusive of taxes. But taxes have not increased appreciably in this time period either (whether there's an abatement or not):
As for heating costs, I don't recall what we budgeted off the top of my head, nor do I recall how much less we've been paying, but the trend is correct. What does it say about other buildings who've had to increase maintenance? Curious what other costs are increasing at a relatively quicker rate.
fyi, the tax increase problem comes when assessments are raised not just rates. and i assume you are in a relatively new building so long term maintenance issues have not yet arisen. manhattan co-ops with which i am familiar tend to have relatively large staffs often times because of long ago rent stabilized policies which means that labor as a percent of the total budget is probably higher than yours.
cc, agree, assessments are the other crucial piece to property taxes. I think most people are unaware you can contest as assessment (another benefit a solid mgmt co can handle for you). We haven't had to yet, but our assessment hasn't really budged yet.
And yes, absolutely we're a new building - as I said above, in no way do I consider what's happened with our building indicative of a norm. Older coops are very different ballgames. We're also fortunate to have a great super, and really have no reason to hire additional staff (the building is relatively small enough). Thanks for your insight.
plow jop, ill give you this, too: you bought a new construction condo in wburg at peak for all of NYC, but your $ were so good, your place is worth same or more than you paid.
but hey when i remember that youre an exceptionalist, it all makes sense
Bottoms, if it makes the world you live in seem like a better place, then yes, indulge in your repetitive, farkakte delusions.
Ours will be going up 5%.
Less than 1% on the co-op.
The board had put an assessment in place last year for special projects and to bulk up the reserve fund, and I think that that assessment is carrying some of the weight of a 2012 maintenance increase.
FYI, we were told that comparable buildings were seeing 7%, mostly due to RET increases.
Yup, 7.25% here, plus a 2 year assessment for brick repair.
Doesn't exactly help the rent/buy equation...
i'd think they'd be inversely related.
maintenance(& taxes) vs apt prices that is
9.5% increase here - disappointingly high, given the 6% increase last year. We have a seven-figure reserve fund, and we upgraded our hallways about two years back with a relatively small assessment and added a nice roof deck, so overall, I guess it could be worse.
That said, at some point, the increases will drive me to sell and move on... hard to see where it ends.
any explanations as to why so high?
That said, at some point, the increases will drive me to sell and move on... hard to see where it ends.
so I guess it is inversely related
When did "that said" become a sophisticated way to say "but"?
yada yada yada, if you know what I'm saying. Church.
dwell, the letter from the board cites the NYC property tax increase and salary increase built into the union contract. It all seems reasonable when explained, but after seeing maintenance go up for the past 4 years in a row, the total increase over time seems excessive.
apt monthlies seem to track college tuitions--they're on their own very special inflationary spiral
at least i get good value from the colleges i pay
of course, there are the exceptionalist owners who claim little or no increase year after year; based on installing poison lightbulbs in hallways, etc
im sure we'll hear from one shortly
arguably, the property tax increases are due to the real estate slump -- the City is trying to make up through property taxes what it has lost on real estate transfer taxes due to a lower volume of sales. (personal income taxes have essentially been flat).
If the need for tax revenue is really the driver, when owners like Lanzz sell, RETT goes back into the coffers, and there's less need for property tax increases.
DG Neary Realty
how is the city going to make up the loss of revenue from Wall Street bonus's plummeting?
Increase the PILOT in BPC.
I thought Cuomo ruled out a hike in property taxes ? or can NYC just do it independently ?
it was explained to me once that even though a property tax rate may remain unchanged, if a property's assessment is independently increased, the effective tax amount paid increases, thus getting around the cap on hikes?
Thanks for the info, Lanzz. Perhaps a tax certiorari proceeding could reduce the bld's assessment?
>the City is trying to make up through property taxes what it has lost on real estate transfer taxes due to a lower volume of sales. (personal income taxes have essentially been flat).
FP: how's about NYC cut it's budget & stop spending taxpayer $ on wasteful programs? I used to work for the Shity of NY &, believe me, the Shity feels very entitled to take tax it's citizens however much it can & spend that $ on whatever it desires.
Marco, NYC re tax is governed by NYC. I'm not sure what RE tax Cuomo was talking about.
birdier: bingo! you got it & that's the scam: government doesn't raise the tax rates, but does raise the assessment. Moreover, since the RE bubble has been deflating, practically ALL assessments should decrease, but the gov raises assessments. Gotta fight that via a tax certiorari proceeding.
RE is the cash cow prisoner of all municipalities: blds can't be moved out of the jurisdiction, so municipalities feel free to forever milk them via ever increasing RE taxes.
I am not pimping for any lawyers, but, FYI, if you're contemplating a tax certiorari proceeding, this firm specializes in it & I have used them with good results:
Goldberg Weprin Finkel Goldstein
1501 Broadway, 22nd Floor New York, NY 10036
here's some info on NYC tax assessment reduction:
lastly, if you want to do a certiorari proceeding, ya got contact your lawyer now because papers must be filed in February.
>I thought Cuomo ruled out
Bottoms, halogens and LEDs are poisonous? Interesting theory...
"Moreover, since the RE bubble has been deflating, practically ALL assessments should decrease, but the gov raises assessments."
Aren't the assessments based on comparable rental rates? If so, as long as rents are increasing you'd expect the assessed value to increase even if the actual property value declined.
Jordyn, yes. The city collects income-and-expense reports from rental properties, then uses those to assess co-ops and condos. http://www.nyc.gov/html/dof/html/property/property_condo_coop_comp_rental.shtml
got it plow jop--your building installed lcd's and halogen's and the electrical savings were so great as to offset the cost of installing new fixtures as well as these very expensive bulbs, so great that, acc to you, a net decrease in maintenance was effected, more than offsetting other costs which increased
the ridiculousness of this is what caused me to assume you were referring to a switch to mercury-laden CFL bulbs--which would also be ridiculous, but less so, more on par with most of your blather
for the record: plow jop bought new construction in Wburg at peak 07/08; apt is currently worth more than peak value; maintenance has gone up less than 1% since then--nice purchase plow jop!!!
Bottoms, you're in a "Bah humbug" sort of mood all year round, aren't you? Keep on hating/making up bullsh!t from that little hovel in the ground you call home. Look forward to more of it in 2012!
I'm no fan of Wbuttocks, but it never ceases to amaze me how he destroys bjw and bjw doesn't even seem to realize the extent of that destruction.
8% in our (large) coop accompanied by extending an existing assessment for the length of 2012. Due to RE taxes primarily. Big bummer.
However, on the flipside, the board has acknowledged the current environment (RE market, maintenenace increases) and made the sublet policy MUCH more favorable, which a few residents are already planning on taking advantage of, having pulled their apartments from the market already and decided to sublet this year. It is certainly true I live in a rather "relaxed" building - by Manhattan standards that is -- but I would not be surprised to see much more of this, i.e., boards realizing they are going to have to give residents something in light of the market and maintenance issues, and subletting is a pretty big deal.