rental tenants in the building,” “as long as they respect that they’re living in a condominium building, rather than a college dorm or a fraternity crash pad.”

Better buildings won't have these negative tenant implications.
BUT, you don't to be an owner, i.e. someone with big $$ invested in your home, in a building where someone can just live there on a transient basis. It doesn't support the value of your apartment.

Some buildings that are investor buildings are built not to have people there all the time so suddenly flooding the building with renters who are there more often than investor owners will create more wear and tear than you'd expect. With value engineering, this problem will be highlighted within a few short years.

Nor will CO-OPs.

When I bought my condo in Connecticut in 1992 my complex had about 40% renters in it and thus I had to either get PMI (mortgage insurance) or have a higher downpayment. Banks don't like large renter populations in condo complexes and thus it's harder to get mortgages. Coming attractions.

No new co-op buildings come on to the market, so while it protects old buildings, it doesn't protect new developments.

In any case, in the next half dozen years there are going to be moves by a lot of lesser co-ops in Manhattan and out to convert to condo ownership. Now that they've figured out how to handle the value of the lease, the tax issues are not daunting. The types of co-ops I'm talking about are not the premium Park, 5th, CPW, WEA Emery Roth or Rosario Candella co-ops built for the rich, but rather the 50s, 60s, 70s, 80s co-ops / conversions by the sponsors. Today, few younger families want to get into the co-op messes out there, especially with such a diverse (divergent) set of living interests resident.

If you live in the Village, 61 Jane is a perfect example. Prime prime location, but younger doesn't want to deal with the politics. Google 61 Jane and this is the second article that comes up: http://www.thevillager.com/villager_77/womeninjanest.html who needs this?

thomtorp...read the article...i don't understand what a sad case of mental illness has to do with condo conversion.

Seriously, there are several different communities that shouldn't mix:

Long time owners with low basis
Recent owners
Renters

So long-time owners should never, ever be able to sell? Recent owners should be prohibited from ever buying from owners who have low basis? What exactly do you mean by "low basis"?

I'm with Julia. This is a specific and sad case that has nothing to do with condo conversion.

Prohibited, NO

I'm saying that recent owners should avoid like the plague a building with rental tenants and a building with long time owners with a low basis. And similarly, older co-ops should avoid selling to new owners who aren't putting a big %% down, especially considering the run up. The economic circumstances of low basis, low cash flow owners do not fit with new buyers, both ways. But whichever side of the ownership equation you are on, no one in a building they own should want many rental tenants.

You haven't explained low basis. Coops regardless of age usually require a minimum of 20% down - there are just not that many out there that will permit 10% down. I'm still not sure what you're trying to say about types of owners in coops, or how this applies to condo conversions. I don't disagree with you concerning high percentages of rental tenants, but you seem to be saying that it is impossible for people who have owned for a long time and have low ownership costs to live congenially with new buyers. On this you have not proved your point.

"Today, few younger families want to get into the co-op messes out there, especially with such a diverse (divergent) set of living interests resident."

What kind of "co-op messes" are you talking about?