35 Sutton Place...coming soon

why does 10B think they can get a premium over 16B?

How strict is strict?

Congrats Ali - This board has discussed that building quite a bit over the years and it seems to be one that has adapted well. I am sure you will move the apartment quickly.

Re Sutton Place in general: There are exceptions, but generally I think the "strictness" of boards in our neighborhood is exaggerated. A lot has changed over the past few years, as evidenced by downpayment requirements being reduced in most co-ops.
People either love the neighborhood or would never live here. Most buildings are co-ops and the population is less transient than most of Manhattan. It seems to be generally out of favor currently, but we love it. Feels like there is a glut of apartments on the market now. Price / sq ft is among the best in the city and apartments are larger than average. I always think the large % of estate sales keeps prices lower here (apartments need renovation, sellers often not price sensitive).
Based on my experience (former board member, not an agent), buyers are often (usually?) empty nesters, also seeing a lot more young families recently who appreciate the space. Still get pied a terre buyers but feels less so than a few years ago.

* to clarify, I am a former board member in this neighborhood but *not* in this building

@Rinette: Because 10B is an actual 2 BR, rather than a 1BR with no LR and a big EIK? (Neither are setting records for speed of sales.)

etson, it has taken a broker from one of the top three brokerages three years to sell a different unit, partly because there has been at least one turndown. And a friend of mine from one of the other three major brokerages, someone who I have worked with, and trust to know how to deal with boards, has also had a turndown. So... while I have not yet met the board, and look forward to doing that and working with them... I would classify that as "strict."

The combination of a 1960 building, estate condition, and strict board who turns down due to price seems like the worst of all worlds.

The building description starts by pointing out where the building is not: "a short walk to 5th Ave." Actually it's a 21 minute walk of almost a mile. Why not embrace being Roosevelt Island without the tram? It's quiet, the views are good, and the hospital is "a short walk".

I find the whole strict board turn downs on price & all the shenanigans that go on to mark up fake prices amusing.

Why not take the fake contract price including renovation credits, transfer tax credits, mortgage rate buy downs, etc to the extreme? How about structuring a contract price that builds in a charitable contribution, which the buyer can deduct, lol.

It's all just numbers on a computer screen anyway. Money isn't even real.

On the other hand, as I've pointed out before, in other markets this kind of painting the tape is illegal and does result in fines or jail. And yet real estate remains immune to such regulation..

Steve, It will help your frustration to think of each real estate transactions as akin to a private company changing 100% ownership. Each piece or real estate is different including the same line in the same building. So comparing it to say a transaction of 1000 shares of a public company with exactly the same 10mm share outstanding is just tormenting yourself.

Each piece OF

The choices of those who elect to live in coops with inflexible board always stokes some passions here. To each their own. Apart from being in estate condition, another issue that I have noticed looking at places in this vicinity is that a lot of apartments that were renovated were done in a style that would require a full re-do.

Perhaps a more interesting topic (albeit not this building), is how long some of these place have languished on the market, particularly in places like One and Two Sutton. One of those apartments is quite attractive, but has been listed for 1.5 years with no price adjustment.

Why do people not make the flip tax payable by the seller or list the apartment net of the tax? Many sellers of expensive apartments probably face capital gain taxes and would be better off with the money coming off the sale rather than the purchase. And flip taxes annoy me as a prospective purchaser.

Best of luck to you, Ali. Hope you reel in a big one.

@steve123: What is the deal with transfer tax credits?

When you live in a "restrictive Co-op" it doesn't just restrict you, it restricts your neighbors as well. It baffles me that people on this forum refuse to accept that for some people that's a feature, not a bug. I think for some people here their apartment is a multiple of their net worth, for others it's equal to their net worth. For them maximizing the value of this asset is paramount. But if your apartment is 5% of your net worth it's not that big a deal, and you may have other considerations.

Ali,
In your best guess, have the turndowns been due to the board not accepting the reality of price decline in that neighborhood for coops? Perhaps I am wrong, but I feel that in 90% of the cases for US buyers (ex musicians and actors), the decline is due to purchase price of buyer's financials (post-close liquidity and income) in coops.

"etson, it has taken a broker from one of the top three brokerages three years to sell a different unit, partly because there has been at least one turndown. "

30, the number of people for whom being trapped in a highly illiquid coop is a feature rather than a bug is rapidly declining. Back in the day it was a feature because your job was for life, your company stayed in NY, your kids went to Trinity just like you did, your apartment cost $100k (or say $500k on today's money), and your coop was a status symbol. Times have changed. People move jobs. Companies leave for Connecticut. Alumni kids don't get into Trinity. The apartment now costs $4m and yet isn't a status symbol bc trophy buildings now are all condos.

Exactly right and except may be for a few buildings. Of course, now the prices are rather attractive for the stuffy Park Ave estate condition coops.

“your coop was a status symbol”

Congrats, Ali. I love the area and price per square foot, but sadly we did not have the assets to pass those kinds of boards when we were looking. In the future i would consider that area again if we ever feel compelled to move. I do find maintenance in many buildings to be unacceptably high.

George,
I don't disagree. And in fact I have advised buildings for over 3 decades on reducing their cash requirements. However, the majority on this forum seems to want all Coops to have Condo rules, but in the real world Condos have been acting more and more like they are Coops. And my point remains that there are many people who still want to be in buildings which have some kind of restrictive rules. Many Coops should be looking to reevaluate their criteria. But they shouldn't be looking to throw the baby out with the bath water as many on this forum would suggest. They just need to adapt to the times. Especially for relatively "shitty little buildings" on the Upper East Side, which really have little business being on the high end for various requirements. However even in those buildings I'm only about the majority of shareholders Don't want to change.

I think 16B has a better layout for empty nesters.

I think people in more restrictive buildings want their neighbors to be like them. In New York a generation ago that meant very discriminatory practices -- many of my Jewish friends, for example, grew up on the West Side because there were many East Side buildings that Jews couldn't get into.
Those days, I believe, (and am thankful) are pretty much gone.

However, many co-ops still have an arduous screening procedure, which people who don't want to go through it see as a form of discrimination in and of itself.

For one thing, co-ops can still screen for "lifestyle" -- one of the big examples being that they turn down rich people who say they're going to be primary residents in cases where the board thinks those people are lying. We've seen a couple of complaints like that on these boards on other threads, and in at least one case, the potential purchasers were indeed lying, and were just mad that they got caught out.

Another example, which a lot of young people run into, is that there's inventory in need of a refresh, if not a complete gut, and the co-op screens, not just for a buyer, but for a buyer who they think will do the renovation using contractors, and at times, that are acceptable to the building.

These kinds of issues can generally be hashed out pre-purchase, but as technology changes, more and more of that communication goes through managing agents who are (understatement times 1000) poor conduits of communication.

Unlike most brokers who tolerate/expect a 10-20% failure rate, my business model is such that I can't afford turndowns, and I take a lot of pains to avoid them. However, that frankly alienates the clients ("I work very hard at a fancy job and I'm a good person with friends who like me; I don't understand why I have to 'campaign' to buy this apartment -- that's not the way it works on TV") and it's not fun to be in a service relationship where the clients that you are turning yourself inside out for disdain you. (Some of this is the nature of modern work; everybody who's in law/medicine can feel free to give me an "amen" here.)

What's more, even for the clients who are a great fit for me, and appreciative, the fairways are getting narrower every year. I had a turndown Downtown (Downtown, for heaven's sake!) that took me several months to reverse, and it turned out that the original issue, which neither the selling shareholder nor the managing agent nor the TV-friendly brokerage on the other side had communicated correctly, is that the board was afraid that the buyer was going to throw out-of-control parties because a previous owner in the building had. (My buyer won't, and the board gets that now, but oy, that was months of work.) Similarly, I heard an anecdote of another Downtown turndown where the issue was clearly not the buyer's resources, but the board's fear that the buyer was going to bring chaos into the building.)

So yeah, co-ops arduous.

The reward for co-op purchasers is that you can get inventory that you can't always get if you're purchasing a condo (35 Sutton has lovely river views, for instance) and also a level of care at your residence that most condos can't deliver.

Maybe it's different at a really high-end prewar conversion like the Apthorp -- perhaps 300 can speak to that -- but generally if you want your mail handed to you...or if, what did mcr just do for her building? have a flue person AND an engineer AND an architect check out the fireplaces ... you're going to have to buy a co-op.

The #1 thing I think the buildings could do, honestly, to make that process easier is to speak to brokers more, and more directly.

ali r.
{upstairs realty}

I get that managing agents are C- students at best, but I also wonder why we shouldn't just blow up the entire system. Apply Fair Housing laws to coops, make them justify any turn down against a set of pre-published objective criteria, and eliminate anything that might identify the buyers (name, race, religion, age, etc). In many states, even "love letters" from buyers to sellers are banned because they could result in discrimination. Yet here in deep-blue Manhattan, people will fight till they die for the right to discriminate.

>people will fight till they die for the right to discriminate.

No. This isn't a problem people care about. And doesn't require an outside solution, certainly not a government-led solution.

@front_porch,
A good many people preferred the West Side to the East Side. I never knew anyone who wanted to live on the East Side but couldn’t. The artists whether writers, actors, theatre people all wanted to be on the West Side. Some examples: David Mamet, John Lennon, Yoko Ono, Philip Roth, Mia Farrow, Faye Dunaway, Martin Balsam, Issac Bashevis Singer, Betty Friedan, Byron Browne, Lee Strasberg.
To be able to walk to Lincoln Center, or even to see a Broadway Show, or hang out in one of the all night chess houses, where devastating conversations went on, I can assure you these people including myself wanted no part of the stuffy East Side. Let’s not forget the West End Cafe. And to add all the lectures and off off Broadway plays one could go to. The West Side was vibrant and creativity flourished. Let’s not forget the beautiful pre war buildings, and the parks and transportation. Actually I wasn’t aware that there was such discrimination. Woody Allen lived in an east side penthouse, but he was always seen on the West Side with Mia. When I came of age in the sixties was the time when Jews in this country began to flourish big time. But even so before.
I did see Maestro this evening; Bernstein did have a penthouse on the East Side. But he certainly wasn’t stuffy; an example, he did throw a party for the Black Panther Party, and no one objected, it was even the inspiration for Tom Wolfe to write Radical Chic and Mau-Mauing the Flak Catchers.
At that time many Jews became part of the Civil Rights movement.

StreetSmart, I love the West Side, but that's a choice, one that wasn't available to many of my friend's parents, despite the fact that it was available to Woody Allen and Leonard Bernstein.

https://www.wnyc.org/story/restricted-co-ops-the-gentlemens-agreement/

“Everybody knew money in avant garde New York” Saul Bellow”

The joke is on them cuz it's restricted
https://youtu.be/6ALod2XWaQ4?feature=shared

Rinette's "we're fine, leave us be" comments are what was said by the good ole boys down south when the yankees came to eliminate their peculiar institution, desegregate their schools, and enforce voting rights. More recently, same as Penn and Harvard said when their antisemitism was exposed. NY coops are a last bastion of racists and bigots, and they don't want anyone telling them otherwise. Even if their moose heads are Jewish.

@Front_porch
That article was written in 1969.
Nevertheless to think that Jews were forced to live on the UWS is a generalized statement that is incorrect. All the Jews I mentioned in my thread never moved from the UWS.

The anti semitism of the elite universities were decades in the making. Many Jews and even non Jews
have canceled their donations. The US government via Federal contracts and grants have donated over 30 billion to elite universities. That could very well change. Columbia University and NYU receive hefty property tax breaks. That too could change.
Some people just recently have noted that elite universities make people stupid. David Mamet has recently urged people not to send their children to elite universities.
If this keeps up elite universities could very well be canceled.

the poor poor defenseless, choiceless people with large downpayments and excellent credit scores attempting to buy into New York co-op real estate.

I am curious how those restrictive coop buildings will evolve in the future. Will the people on the board eventually worry that the restriction that they have being enforcing for their lifetime would backfire themselves when they are going to sell?

In this market, higher and higher maintenance, building gets older, more costly regulations, unreal extreme renovation cost, already made Manhattan real estate a giant illiquid asset, now as a potential buyer, I also start to worry about my exit challenge- what if I cannot find a perfect new buyer that the board likes, to take over this hot potato when I am ready to move.

I am also wondering what is going to happen to the renew of building mortgage, which has been growing gradually, and eventually the bank may re-evaluate the risk and illiquidity of it, when the increased interest rate expense on top of the already high maintenance, which makes the total projected maintenance close to the market rents, which means the property value is zero in theory.

when the banks start to refuse to roll the mortgage, or charge very high interest rate for renew the mortgage, when building insurance start to charge higher premium, and when many of these costs can not be transferred to the renters (as the renters can walk away), but the coop owners can not

Sean,

If a new condo in the same location as a coop is $2k per sq ft, land cost is probably close to $1k. That is your floor. Since building something in NYC has a huge DOB regulatory and compliance cost not the mention difficulty in building in a dense area, making repairs to existing buildings rather attractive and coops are there to stay as long as there is final residential demand to live in Manhattan. Try buying a condo in prime UES west of Lex below 90th and above 64th and you will realize that stuffy coops in that area after 20-30% price decline over the last 10 years are good value relative to the rest of the city.

What you seem to be expressing is general negative view of all NYC real estate not just coops. There is Nada on this board who finds fancy high-end rentals at sub 2 percent cap rate. Nothing wrong in joining him.

Are you guys also against HDFC Coops?

Sean, I got curious and searched for condos for sale west of Lex on UES. 3Bed 2.5bath+ under $5mm. Got only two listings. So there are limited alternatives besides coops in that area.

I am mainly looking around 90th to 96th areas, where there are some older and cheaper condos. However, the monthlies of upper east (regardless of coop or condo) really scares me away, and coop with so many restriction (can only sell to buyer the board approve, can not sublet...) makes it even worse. I am more and more looking for renting now , but the choices are very limited.

the rents are actually reasonable, considering the high monthlies, however the choices are very limited.

Sean,
It all comes down whether you have an option to rent an apartment for multi-year lease (min 2 years unless it is rental building who would usually renew your lease as per the market) substantially similar to what you would like to live in. Otherwise rents being reasonable can't actually be tested. The only true low cap rates (good deals) are in ultra-luxury (basically $8+ per sq ft/month and large 2000 sq ft+ renovated apartments from what I see. Rental buildings tend to cramp too many bedrooms into small square footage with relatively low/mid-end finishes. Of course, if you are flexible in your budget and location, it is easier to find a rental deal.

General information relative to a previous post, Woody does not like the West Side.

He liked Mia who chose to live on the West Side.

She probably wanted to get as far away from her and Ol' Blue Eyes old place at 530 E. 72nd Street as possible.

Sort of humorous that we have folks in this post wondering why anyone would want to live in a staid, restrictive coop, and then one post down folks in a complaining that their millennial coop neighbor installed a camera in the hallway that draws further comments that millennial techies are the worst neighbors, explaining the case for staid, restrictive coops.

The most prestigious co-op in Manhattan at least a generation ago was the Beresford at 1 West 81st Street which went co-op in 1962, home to Tony Randall, Beverly Sills, Helen Gurley Brown, Mike Nichols, Issac Stern, and Jerry Seinfeld.
However there were other prestigious buildings: such as the San Remo where Mary Tyler Moore lived, the Dakota, where Lauren Bacall and Humphrey Bogart lived and then Jason Robards, and as mentioned before John Lennon, Yoko Ono.
The Majestic is across the street. There is the Ansonia, the Wedding Cake building of the Upper West Side which had hotel services swimming pools, several restaurants, meal service. Musicians were also attracted there.
The Eldorado went co-op in 1982. I sold someone’s tenant’s rights there. It was a nine room apartment facing the park which had an insider price of $115,000. Eventually the building was renovated. It is my favorite Art Deco building in New York.
Alwyn Court on West 58th Street, another historic sought after building. I believe the Osborne is across the street.
The above are the most impressive historic buildings in the city.

A generation ago? What about 10 Gracie Square, with Gloria Vanderbilt and the former first lady of China ? John D. Rockefeller's home, 740 Park? River House, home to Kissinger and a Rothschild? "The pinnacle of luxury living," 820 Fifth, where billionaires lived when there weren't billionaires on every corner? 960 Fifth?

Again, not hating on the West Side, but I don't think that even those really gorgeous buildings were the pinnacle of where NY Society lived/desired to live.

@sport - I think techbros are annoying, but I don't really believe in living somewhere that gets to decide who is let in like some sort of nightclub / country club.

Buildings should simply have house rules, with associated fines, and strong enforcement.

I don't believe a building should make presumptions about peoples future behavior based on inferences into their character based on their race/gender/age/marital status/kids/pets/education/employment/family/etc which is clearly what goes on at some coops.

Everything aside from the written financial rules are a smokescreen that allows illegal but unattributable discrimination. The idea that a large percent of housing in Manhattan and in many cases the lower priced housing works this way is a problem. Would rather see NYC progressives go after that than stuff like non-competes or mandating more DEI kayfabe.

Steve,

While I agree with you that coop/condo approval should be with tranparent written rules rather than with unsaid discrimation by the coop board, I alway wonder about the power of coop/condo to enforce behavioral rules.

Enforcing the rules is very difficult when it comes to noise etc.

Perhaps noise, hallway camera peeping are just a cost of living in multi-family one needs to make peace with if there is no entry discrimination outside of reasonable written public financial requirements (call it max 30% down, some reasonable income/carrying cost ratio, and 2-3 year of maintenance in liquid assest).

"Buildings should simply have house rules, with associated fines, and strong enforcement."

We were not talking about NY high society, we were talking about the UWS and

the fact that Jews as you stated had to go there because they couldn’t get into

your parent’s building or other East Side buildings, and yes one could get the

impression from you that it was not a very good option. Now you choose to talk

about the fact that privileged people lived and do live on the UES, true, but not

everyone wants to be in the company of privileged people. All they have to do is

be born to be the pick of everything. And by the way Madoff lived at 740 Park

Ave. And if those beautiful buildings were not the pinnacle of where high

society desired to live; does high society even billionaires set the standard as to

where one should want to live. If you say no, then what was the point of this last

thought.

These beautiful buildings that I mentioned are historic treasures and the fact

that high society does not inhabit them does not diminish them.

The following is what David Mamet said about the UWS just about a few weeks

ago:
“I grew up in a tiny Jewish enclave on Chicago’s South Side. When I first saw

New York in the sixties, I was awed as by no subsequent marvel of nature:

stretching from north from Columbus Circle, up the West Side was a Jewish

Metropolis. New York in my lifetime had always been a Jewish city.; the rhythms,

the accent, the humor always felt to me like home. The populace, of whatever

ethnicity, was formed or noodged by Yiddishkeit, much as the Chicago of my

youth was by the culture of the Irish and the poles.

The New York Times and the New Yorker were run by Jews; they were both our

Rialto and our Bible. New York Theatre, in my lifetime had always been Jewish.

The playwrights were Miller, Odets, Elmer Rice, Ben Hecht, Sidney Kingsley, and

later Arthur Laurents, Lillian Hellman, Neil Simon, Woody Allen, Norman Mailer,

Wallace Shawn, and myself.”

As of late, Mamet has been writing about the Middle Eastern War, or Gaza if you

will. The foregoing was an introduction by Mamet made to prove a point.

But this doesn’t sound like a person interested in high society. Not everyone

wants to be in their company although I am certain that even high society would

welcome them, especially Mr. Mamet.

But that said, speaking about restrictive co-ops, you never mentioned the

egregious discrimination on their part towards the blacks which I still believe is

still going on, and while I do not believe your parents had black friends, but who

knows, nevertheless in talking about restrictions, it is imperative that this

discrimination be mentioned.

Leaving aside discrimination debate, how do the prices per sq ft look like in top 10 most expensive per sq ft coops on the UWS and on the UES?

Listing comparios of what is worth:
Coops 4+bed, 3+bath
>$20mm 18 coops UES. None on UWS.
>$15mm UES 26. UWS 4
>$10mm UES 40. UWS 8.

So clearly more wealthy people on UES vs UWS if one were to go by simply the number of expensive co-op listings.

Condos and Coops 4+bed, 3+bath
>$20mm UES 34. 8 on UWS.
>$15mm UES 43. UWS 23
>$10mm UES 73. UWS 38.

So clearly more wealthy people on UES vs UWS if one were to go by simply the number of expensive condo + co-op listings.

@ streetsmart - I'm in agreement.

@300 - difficulty to enforce rules doesn't make arbitrary pre-crime judgement a better solution.

In near 20 years in NYC I've lived next to / above / below all sorts.. teachers, bankers, techies, trustfunders, rappers, religious leaders, stay at home moms, euro expats, magazine editors, real estate brokers, various creatives/artists, and just about everyone in between. Straight, gay, European, American, Asian, Black, White, Hispanic, single, married, childless, young, old, and many other adjectives we may be forgetting here. Dozens of people.

There are only two people, that if I knew everything I knew now, sitting on a coop board with perfect foresight, I would reject to be in my building. Certainly other people annoyed me from time to time, but nothing to make me need to veto living next to me, let alone veto from the whole building.

Sitting on a board you do not have perfect foresight, and it is doubtful that my two worst ever neighbors resume or interview would give up the game such that a coop board would have rejected them. Both cleaned up nice, had more than enough money, etc. One was the child of a socialite and the other had a last name that implied some ancient nobility. They were both young singles.. but that takes you right into illegal discrimination.

However both of them were so flagrantly disregarding all house rules that the entire floor was in revolt, knocking on their doors to shout at them, taping complaints to their doors, putting in complaints to board, and they were subject to numerous fines. No gray area whatsoever.

Most of the stuff that's gray area is people who are too sensitive and should considering moving to the countryside if they can't tolerate the existence of neighbors and shared walls/floors.

As I've said before, the entire purpose of Coops is discrimination.

And no one touched my HDFC question.

Two things I can see getting to me: noise and cooking smells. Cooking smells could be discriminatory if you live next to people whose cultural cuisine involves a lot of fried fish or the use of esp fragrant seasonings (garlic, spices, etc). So I don't know how you regulate that. I guess you just live with it and try to wangle dinner invites :)

@30yrs Do HDFC regulations require more transparency when rejecting a offers? Or are their applications purely income/asset based? I can't see why anyone would be opposed. Maybe as an investment they're somewhat more illiquid, but as places to live who would mind? As an aside: one of the nicest places I've seen is HDFC but it's a walkup - a huge risk as you get older.

When discussing East Side as a bastion of privilege, is that shorthand for 'East Side west of Lex'? Yorkville is home to a lot of worker bees. Same with large swathes of Lenox Hill east of Lex. Prices there are actually lower than anything you can find on the West Side - or that's what I have found.

MTH,
HDFCs, in my experience are far more opaque (obviously not all of them, just like non-HDFC Coops they run the gamut). I've seen the process take 6 months, a year... They just wait until the buyer gives up. I've seen sales go through 4 or 5 buyers without ever getting a Board rejection, or an interview, or even giving the buyer an application to fill out.
HDFC Coops are bastions of "people like us" the same as stuffy UES Blueblood Coops. I've seen various types of discrimination there, too. But not the same type of concern over it. I'm not sure if Uptownspecialist will weigh in because he has to deal with these people all the time, but it would be interesting if he would give some unfiltered analysis.

I've seen incredible amounts of corruption, self dealing and outright theft in HDFC Coops, as well as severe mismanagement. The amount of which has been widespread enough the DeBlasio administration proposed institution of monitors. And there are significant number which have been cheating the system by not collecting flip taxes, a large percentage of which are supposed to go back to HPD to keep the program solvent.

streetsmart, I did not grow up in New York, but both my parents were actually quite involved in the Civil Rights movement.

@streetsmart: Actually, Bernie Madoff lived in one of the penthouses at 133 East 64th (PH was built as a duplex, so not some afterthought of a unit). He was president of the co-op board for a while.

Thanks Aaron,
Actually Madoff’s middleman and ex financier, J. Ezra Merkin I believe lived at 740 Park Ave.

Yes Merkin was (still is?) at 740 -- Don't know if he rebuilt after his sauna fire? Did he win his lawsuit w/ his insurer?

@30yrs. good to know...and also kind of disappointing since the whole idea was to make homeownership more accessible. Sounds like a mess. The idea of snobby HDFC coops admitting only "people like us" raised a chuckle, though - I don't think of living in an HDFC building as conferring elevated status. I guess people will grasp anything to claim a higher 'station' in the world. I have heard that HDFC management can be amateurish and that you really have to exercize due diligence going in.

@Aaron
Haven’t seen any news as to the outcome.

>The idea of snobby HDFC coops admitting only "people like us" raised a chuckle, though - I don't think of living in an HDFC building as conferring elevated status.

That's not his point. Holy cr@p.

Amateurish and/or criminal board activity certainly isn't limited to HDFC buildings, and any buyer, at any level, should exercise quite a bit of due diligence. The comments on many threads from this board clearly show that.

Repeating:
*HDFC Coops are bastions of "people like us" the same as stuffy UES Blueblood Coops. I've seen various types of discrimination there, too."

okay, now I am dying to know more. The HDFC racket is new to me. Please elaborate.
As far as stuffy UES coops, I don't think many have sufficient demand to sustain discrimination nonsense; I believe anyone who has the money and wants to prop up the illusion of a certain price point can live in any of them.

@Multi,
I was not talking about discrimination towards blacks limited to the UES, I was talking about discrimination towards them in New York City.

Isn't that the main point of the in person board interview, to check your skin color/ethnicity? That's the impression I got. They look at your financials before they grant the interview. All of that part is pretty colorblind.

>check your skin color/ethnicity

this is overstated. They want to check your class and behavior.

one time we had a new purchase in my building and I was the only board member available for the "interview."

I asked our president , why are we doing this anyway, what at this meeting will affect our decision? He joked, "Its to make sure they dont have 2 heads, but lets be honest, even that wouldnt be a reason."

Just old rules and bylaws too lazy to change.

I dont mind that there are buildings with racists, and who may not like jews like myself living with them.

It assembles them all in specific places and reduces the odds they end up living next to me.
As a co-op is a business, I'd both rather not be a business partner with , let alone live with them.

@truth - the problem with being ok that some racist boards exist bc you wouldn't want to be their neighbors is that the board is not the same as the entire building.

Given the low engagement in most buildings elections/politics/management, its entirely possibly to have pretty normie building represented by racist board.

You really only need 3 board members in a building of 250 units to be racist enough to flunk people in the board interview.

steve123,
Apply that to financial matters and tell me what you think the odds are of self dealing by Coop Boards are?

In the last Coop I lived in, the maintenance absolutely needed to be increased because it wasn't even covering expenses. But 3 out of 5 Board members had their units for sale, so lower maintenance was in their self interest. And when I brought this up in an Annual Shareholders meeting, the Board President asked me if my calculator was broken and the Managing Agent and Accountant claimed that I had my facts wrong.

At the following Annual Shareholders meeting, the new Board President started with "WE discovered that the maintenance doesn't cover our expenses so a maintenance increase is absolutely necessary."

Do most boards outsource annual financial audits?

As for the composition of boards, it sounds like most human organizations. It's often the loudest, the most incurious and insecure, ideological and simply power hungry that rise to the top. If it's a volunteer position, add to that the most idle and meddling. But who can blame people for not joining? It doesn't sound like a barrel of laughs.

@30 - oh I know. We had this in my condo. New couple took over board (yes 2 people from same unit), changed management company and auditors. They ran a 20% budget deficit in their first 6 months by dipping heavily into the reserve and the very delayed audit didn't really call it out without a careful reading (most of my condo is financially illiterate).

@MTH - yes they outsource audits - but they are the ones hiring the auditor, so what kind of results do you think they get? It's like GFC era credit ratings agencies.

The board continues to be re-elected as they switch management & auditors every 1-2 years, and release the audit later and later, often 75% of the way through the year, post election.. and only after chasing. So the incentives are what they are.

@Steve
My comment was only half serious and I had the upper east side gold coast in mind with my comment.
As a very young child living on the wrong side of Queens Blvd (by Lefrak City), my family was looking to move to eastern Queens. My dad was looking hard at Whitestone and when asking the agent if there are jews in the neighborhood, she responded, "no , you dont have to worry about them here." So we ended moving to Bayside instead. Im thankful for that as Im convinced I would have been much less successful in life if I grew up in whitestone.
I heard this story much much later in life though and as part of the reason we moved from the first neighborhood was that I would tell my parents other kids wouldnt play with me because I was jewish. Something I dont really remember.
Not that I was immune from experiencing anti semitism in junior high as well and Ive developed quite a thick skin to it. I think there is such a thing as growing up "too soft" which is not healthy either.

As for your 250 unit building example, I dont know, it seems it would be quite hard today to turn down anyone who is financially acceptable. There are just too many kinds of people in NYC for people to really care about someone's skin color, heritage, or sexual orientation.

On a personal level, my bias going forward in life is to make sure I dont live below or next to a multibedroom unit which could have running screaming kids. :)

And sorry to the board for not reading everything. Im just now catching up on the HDFC conversation.

What did "people like us" mean?
Skin color? Culture? Worker in blue color union? Age? Politics?
I could just as easily see prejudice based on not being a fellow teacher or city employee. Is that better or worse bias?

Agree. I think that probably reflects thinking of 80-90 percent of stuffy coop boards. They may care about professional success (ex possibly actors, musicians) financials more than anything else. But these days you can just get a condo as there is plenty of supply.
——
There are just too many kinds of people in NYC for people to really care about someone's skin color, heritage, or sexual orientation.

@ MTH: "Do most boards outsource annual financial audits?"

Well, yes, because an audit is, by definition, independent, so cannot be done by the board. In the best of all worlds, an audit is also not done by the company doing the accounting or taxes, so any irregularities there are brought to the attention of the board. (Hint: Read carefully the accountant/auditors statement of what they actually did to gauge their independence and ability to identify/report problems.)

And, as Steve said, the board hires the accountants/auditors, so there's a problematic dynamic there. This is a known conflict in the auditee/auditor relationship, and larger companies have ways of making the audit work performed truly independent and informative (e.g., via having audit committees with independent directors, etc.), but these aren't typically available to smaller organizations, who then must rely heavily on smart board members and "high standards of commercial honor" (as my industry likes to say).

truthskr10,
In HDFC, yes to all of that.

Aaron2,
To follow up on my example of my old building. At the second Annual Meeting after the Board President announced "We discovered that maintenance didn't cover expenses," I was furious. I pointed out I had brought the issue up at the last meeting, the then Board President asked me if my calculator was broken, and both the Managing Agent and Accountant said I was wrong. The Managing Agent has already been fired by the co-op. I demanded that the accountants be fired for cause. The Board President said no because she hadn't seen emails between the account and the old board pointing out that maintenance didn't cover expenses.

So the accountant knew I was right and bald faced lied in the annual meeting, and the new board wanted to keep them because they were willing lie to shareholders to protect the Board.

HAD seen emails

We have been previously turned down by a predominantly Jewish board. Potentially for not being Jewish and white enough. I am not okay that I am not able to buy a place I can easily afford in a location that is really convenient for me and has a great school, just because someone does not like my/my partners ethnicity/skin color. Yes, there are other buildings and there are condos, but once you filter by location, school district, apartment size and price, it is not an infinite supply, so I don't want someone's racism to dictate my purchases.

_______
I dont mind that there are buildings with racists, and who may not like jews like myself living with them.

It assembles them all in specific places and reduces the odds they end up living next to me.
As a co-op is a business, I'd both rather not be a business partner with , let alone live with them.

Sounds like coop buildings can become mini-ghettos by race, religion, class, whatever else. Redolent of junior high only with more serious repercussions for families who are just trying to find good schools.

krolik, aren't you (by my standards anyway) young though? Do you actually think you would have gotten that turndown if you applied now, more established in your career, and presumably richer?

A lot of my clients are members of "protected classes" and I get them into aspirational co-ops, but one dimension of their applications isn't just race/religion/whatever makes them think they're subject to discrimination... it's that they're under 40, and their post-closing liquidity isn't anywhere near what older candidates bring to the table.

@30yrs: In a higher stakes environment, that could be the beginning of a basis for a lawsuit for fraud, or professional malpractice. But an accounting firm isn't required to state that maintenance doesn't cover expenses -- only accurately present the income and balance sheets that accurately reflect balances (from which a reasonable reader could see that I < E).

@krolik

Im surprised to hear that. (AND SORRY) Were they orthodox?

Maybe they were/are indeed prejudice.

also

Maybe they didnt like your financial package.
As a board member and while we havent turned anyone down in the 10 years Ive been on the board, one we almost did. Without going into details, the package was just enough to handle everything but uncomfortable if they had an emergency come up. And like magic, they added an additional asset account that made an emergency comfortable.
Anyway, not everyone measures what that emergency level backup should be to the same level. There can be legitimate disparity and gray there.

Aaron2,
But 8n th

Aaron2,
But in this case they flat out stated that income was covering expenses in the Annual Shareholders Meeting while at the same time writing emails to the Board that it wasn't.

@truthskr
They were not orthodox, but there were a lot of older people in that building, so probably quite conservative. I researched the board and their backgrounds. The president of the board was over 90 at the time, and most board members own multiple units in the building. The unit i tried to buy had three board rejections in a row. I guess no one measures up to the backgrounds of those already living in the building. For example, board president went to Dalton private school followed by an Ivy college where she met her husband. Her self-made husband was promoted to CEO after only 1 year at his daddy’s company where he started as a Vice President right after college. He sold the company by 30 and after that held honorary gov’t roles like ambassador, etc.

Another former colleague of mine managed to get approved and bought a unit in the building (she is actually junior to me in her career, so there might have been a trust fund involved). She is also not black or brown, which probably helps.

In my opinion, we could easily afford the place with enough in the bank left for emergencies (also applying the same emergency fund/savings test to people in their career prime as to retired people is nonsense. The probability of partner and i both getting fired/laid off and not being able to find work for two years is zero, and we could pay mortgage and maintenances on a single income easily). The fact that we did not get to buy the place is plain discriminatory.

>> krolik, aren't you (by my standards anyway) young though? Do you actually think you would have gotten that turndown if you applied now, more established in your career, and presumably richer?

Two promotions and couple of years of savings later, maybe not. But now i would not apply as i already got a place at a building with a more sensible board. Also interest rates are now 7%, and the purchase no longer makes sense. The seller missed their chance. The apartment was still on the market last time i checked.

@Krolik They sound pretty snooty. Sorry you had to go through that :/

Are we still waiting for the big reveal?

>> ...it's that they're under 40, and their post-closing liquidity isn't anywhere near what older candidates bring to the table.

So I am curious, how common are delinquencies in condos, where there is no post-closing liquidity requirement. Does this requirement exist in coops for purely discriminatory purposes, or is truly it protecting shareholders from harm? From what I can see, delinquent shareholders in my current coop, as well as the one i was denied from, tend to be long time residents on fixed income... screening for post-closing liquidity is unlikely to prevent this (30 years down the line).

Condo foreclosures are rare in Manhattan below E96/W110 but they do happen. Delinquencies (call it more than 6 month outstanding) on common charges are more common than one would think even though they are still miniscule percentage wise - guessing 0.5% or below at any point of time.

Page 51/2 has some data on delinquent taxes. On a relative basis, Class II condo delinquencies are 5x that of coops. Of course, coops deliquency is expected to be much lower than condos as coop can have a delinquent share holder but the coop will still pay its taxes with other footing the bill temporarilly or so they hope.

https://www.nyc.gov/assets/finance/downloads/pdf/reports/reports-property-tax/nyc_property_fy23.pdf

The report also seems to have a rather strict "delinquency" criteria. Basically anything over due to "delinquent". So in reality a lot of people pay up.

"Property tax delinquencies reflect the amount of property tax that is due but not yet
collected. "

Interesing article. In most cases, I would think it is a lack of willingness rather than ability. Coops screening process may be (at least meant to be) helpful in reducing delinquencies due to a lack of willingness as well as ability by requirements like "primany residence" and "liquidity".

https://alblawfirm.com/press-mentions/condo-boards-collect-arrears/

@Krolik - Re: condo delinquencies
I sat on a board for 2-3 years of a N BK condo.
We had owners that were like 1/3 investors, 1/3 trust funders, 1/3 working stiffs.
There was never a single true delinquency, and I saw all the reports monthly.
At most there were 2-3 people who had their auto-pay setup and were always paying monthly, but from the purposes of when the report was cut for the meeting, appeared late. We even got fines paid immediately despite argument because most people were on auto-pay..

One of those things that makes me even more cynical about coops high financial bars.

@300 - glancing over Krolik's good point which is - what does entry gates on financials due to prevent coop residents for life from being delinquent in their retirement? I see this as less of a problem for condos as ownership is more transient and people have options like renting out their unit in retirement.

Steve, What did you think of data from NYC on delinquent taxes - condo vs coop?

@300 - As you pointed out, isn't the delinquency of taxes irrelevant since coops will generally cover the taxes to prevent the unit being seized? "5x higher" also is the most inflammatory way to slice the stat when we're talking 0.8% vs 3.7%, with the 0.8% being artificially lowered by coops paying?

That 3.7% seems pretty similar to the 3-3.8% range for 1/2/3 family homes. That is - 3~4% seems like the natural rate for people who actually have to pay their real estate taxes directly. Coops on the other hand pay on your behalf since they collect it as part of your maintenance right? And then coops even cover shortages to maintain their right of seizure?

What % of tax delinquencies do Coops cover, 25/50/75% ? Is it the majority of cases so that they protect themselves? Let's take the reported final delinquency rate to the city & then different % assumptions for how much coops actually pay on delinquent owner behalf.

0.8% final delinquency, if coops are covering only 25% of cases, then payer delinquency is 1.1%.
0.8% final delinquency, if coops are covering 75% of cases, then payer delinquency is 3.2%.

So in reality the actual payer delinquency could be closer to a 1~2% difference between coops and condos right?