8% Maintenance Increase

taxes and union increases along with insurance are hitting everyone hard....mine went up 6%....seems like many buildings are being assessed higher value by nyc....not sure if its a scam to get more $$$$$....where in nyc are you?

We are in the East Village. And the letter hinted pretty openly that we should expect further increases. This is the 3rd increase in a year......

Your coop raised maintenance 3 times within a 12 month period? That is highly unusual. Increased typically come once a year if needed. It is hard to give constructive advice/feedback though without more info such as: number of units in the coop; amount of reserve funds; range of current maintenance (are we talking $400-$1000 or $5000-$10000? Obviously a $200 increase means much less in the later example); are there any special assessments in place. Essentially, what is the overall financial health of the coop and competency of the board? Have you attended annual meetings and are the explanations offerred consistent with well-thought out analysis and exploration of options concerning the building's finances?

I do know that for people attempting to refi, they are now looking much more closely (actually that's a euphemism, since they used to not look at all) at the building's budget, and are almost universally requiring that 10% go into a building's reserves, which is, I think, a bit high. That may be part of the board's decision to increase maintenance, especially if reserves were low to begin with.

They raised it year end 09, then June this year and now December again.

We have 100 units, about a $2m reserve fund, and I think most people's mainteance ranges from $800 (junior ones) to $2000 (two bedrooms). Mine personally has gone from $660 in August 2007 to now almost $1000.

No special assessments. I have no reason to doubt the competency of the board, but at the same time no reason to trust them. Additionally, I do have reason to believe that most people dont really mind maintenance for the reason that about 60% of residents are elderly and have long been around, therefore they probably have no mortgages. However, the other 40% of us are young singles/families and I know I can't be the only one who is pissed about this. I just don't know what to do about it.

wait...didnt bj and ph say their maintenances hadnt budged for a least a year??
this shit will be happening with great regularity upcoming
watch the ownership cheaper relative to renting as people get fed up with expense increases like these...here we go

cheapen

Wbottom, my maintenance has indeed been flat since 2008. As I said before, I know they will eventually have to increase, but for now we're in pretty good shape. Not sure what your point is.

Wbottom - I am pretty fed up, I have to admit. I think I'm almost livid.

i feel your pain techno--and your increases feel extreme, esp in light of the 2mm reserve, which indicates a prudent board--one would think, in a case like your bldg, tenants would demand serious detail on expenses from the board--is your annual mtg coming up? obviously re-review your last financial stmt thi that's history at this point--i believe you can get the last several board mtg minutes from the managing agt, which should include detail on expenses

bj...flat since 2008 is either fantasy or one in a million exceptional, or is based on a drawing down of reserves, or your underlying mtge was a complete POS that finally was refi'ed--it's not a mystery that operating expenses have jumped hugely of recent--if you think flat since 2008 is anything but incredible, youre nuts

now's the time when other agendized bulls chime in that their has also been flat since 08--hilarious

Maintenance is one of those things where most people know the price of everything and the value of nothing. We just had an 10.5% increase in maintenance, and I'm thrilled about it. The board is taking steps to reduce the building's debt while boosting reserves. (Plus there's a nominal real estate tax increase.)

We're up to nearly $1,300 for a one bed + den in a walk-up building with zero amenities (I do mean zero) and no utilities except cold water included. High, but not so high that it makes the apartment unsellable. I feel fortunate to live in a building that has a long-term plan and a board that is willing to make tough, even unpopular decisions. It does us no good to have $1,000 maintenance but total reserves of $15k (as has been the case in the recent past) and balloon loans that create $30k in closing costs alone every 10 years.

The building will be in great shape in 5-7 years and excellent shape in 10-15 years because of the current board's actions. If I go to sell my apartment in 7 or 8 years, I don't have to worry about prospective buyers' attorneys telling them that the building is looking at underlying mortgage interest rates that are 4-5% higher and closing costs in excess of the reserve fund balance.

http://www.crainsnewyork.com/article/20101201/REAL_ESTATE/101209988#

Wbottom, it ain't fantasy, and I highly doubt it's that much of an exception, though I've never said I think that's the norm (that's entirely your conjecturing). Certain line items have indeed increased, but our new management company (for which we're also paying more) has more than paid for itself by generating savings in other areas. And again, I'm not bullish on NYC real estate - the agenda seems to be yours.

lad, like buying Yahoo, I will pay you the value of cash on its balance sheet $1 for $1, so I'll buy your apartment for $30K, unless of course interest rates are at 20%, then I'll discount your locked cash value of your coop buy 20% per annum......

yeah, but my coop will invest the cash! nope the last condo board meeting about the reserve, they took 2 yrs to decide to go from .50% income to a "riskier" 1%.... flmaoz.... I believe MY MONEY belongs to me.... the bldg got problem, LET THE ASSMENTS begin!

"forced savings!" another reason to be landed gentry!

Wow, with a 2m reserve, I'm surprised they are raising the maint. in a building that size.

lad - you are correct that you wont have to worry about a lousy reserve fund but you (and I) would have to worry about a buyer who sees that he is going to have to outlay $1k or more *just* in maintenance when there are no corresponding amenities. If I was a buyer for a onebedroom - which is what I have - and I saw $1K+ just for maintenance in a building with no amenities, I'd give serious pause.

Well, hopefully people will let it rip at the annual board meeting.

techno, sell as FORCED SAVINGS!

HIGHER MAINTENANCE IS GOOD! FORCED SAVINGS! I can't believe Doug HEdding or Babs Corcoran (in-vitro baby making borker) hasn't started a new marketing campaign.

Don't everyone go buying the high maintenance ones, leave one for ME..

Having recently bought, we didn't see much in the way of large one bedrooms with less than $1,000 in maintenance, at least not where we were looking in Chelsea/West Village.

I've owned fee-simple property before. I look at maintenance as all of the bills I don't have to pay individually in a co-op:
1) No real estate tax bill ($600 per month)
2) No property insurance bill ($100 per month)
3) No water bill ($50 per month)
4) No ordinary building repair bills (average out to $50 month)
5) No separate savings account for big expenses ($50 per month)

That's $850 per month right there. Plus I'm paying about $400 per month on principal & interest of the underlying mortgage, which of course I knew and calculated ahead of time.

Maintenance does hit you in the face, but it's the cost of property ownership. In this metropolitan area area, I think you'd be hard pressed to find homeowners who aren't paying an average of $800-1,000 per month in taxes, insurance, and upkeep when you average out the repair bills.

I will say this, though -- we deliberately sought out non-doorman, low-amenity buildings because maintenance/CCs can't hide the cost of those services the way that rent does. I'm not willing to fund some union workers' cushy medical and retirement benefits when my own private sector benefits are being scaled back.

Lad - where did you end up buying? I lived in Chelsea/WV for a decade before moving over to the EV. I still miss it - you guys have great restaurants over there....!

NO NO NO, BIG FKING difference btwn owning shelter based asset as a bubble is forming and one that is in the earliest stages of decline... BIG BIG BIG fking difference...

It's like having sex with a new model as she is rising thru the ranks vs. one on the decline... have you had sex with a model?, yes, in concept, but that toothless, crack addict who brought 14 dildos to your room in Vegas... well... let's just say there was a slight difference....

WOW, I guess if I broke up your 24% interest on your credit cards into separate little items like:
1) boss bonus;
2) 2nd boss bonus;
3) cleaning lady;
4) nice office at CPS;
5) corporate jet;
6) corporate junkets.

it would hurt MORE... m'okay.... no longer in the realm of reality bubble buyer... pls tell me you locked in at 4% and are thrilleD!!!!!!OMFG

bj..that your new managing agent has found expenses to cut, such that those cuts have yielded emough cash flow to cover the more costly managing agent, as well as increasing expenses; says that sumpin was rotten in denmark previously--as in your maintenance has stayed stable, cuz you were getting fleeced before

again, not typical of well-run buildings--hope you dont have to sell soon--your board's minutes through this period would likely be pretty scary to a prospective buyer

six seven--i like you much better in gray--the 14 pack has surpassed bunchy rainbow thong

very funny

Look: maintenance is not a mystery. The building's financial statement will reveal where the money is going. Any of those figures can be explained at the annual meeting. Because of rising taxes, water/sewer fees, union labor pay scales, most buildings have had to impose annual increases of 2-10% for the last few years. If you already had a building mortgage in place that made sense, and you are operating without amenities, and there are no other revenue streams for the building like retail space or rental lockers etc, the only recourse to balance higher expenses is higher maintenance. And when you say "no amenities", that usually isn't really true: a live-in super is an amenity of sorts; the laundry room is an amenity, too; so is free bike storage. These things either cost money or the loss of potential revenue. I agree that a mid-year increase is odd, but annual increases are not strange, so lumping a late 2009 increase in with a late 2010 increase and calling it 2 increases within a year is kind of shading the truth a bit.

Bottom line: none of this needs to be a mystery. Read the financial statement and see if it makes sense. If not, ask a board member if they could answer your remaining questions.

Wbottom, you're just making lots of conjecture without knowing what you're talking about, unfortunately. There have been shifts in costs, but not nearly as massive as you're inferring. The previous management company was unusually cheap, but we essentially got what we paid for. It's a no-frills building, so not that hard to run, but a more well-equipped management co, like the one we have now, is able to get us some savings on electricity, gas, and things of that nature. Our maintenance is rather low, so I don't think anyone is getting fleeced. I also am on the board, so I can tell you the minutes are not "scary."

How do you get savings on electricity?

My coop implemented changes that saves us $10,000/yr on electricity. Use of flourescent bulbs and newer fixtures in halls was most of the solution.

cc, switch to more energy-efficient lighting (which makes a surprising difference) and lock-in longer-term rates with ESCOs.

Not to be difficult but this type of lighting is hardly brand new.

And...your building doesn't use con Ed?

You should request how much the taxes have gone up and also, what labor costs are the they talking about since you only have doormen who are in unions...their wages would rise once a year only...also ask why money from the reserve fund isn't being used to offset the additional coss.

Using reserve funds for operating budget is BAD BAD BAD policy in a coop. Reserves are for emergencies and capital projects. You do not pay the light bill from a reserve fund.

lad - 1) No real estate tax bill ($600 per month)

for a 1 Br, that's a very hefty sum of money for yrly taxes (7,200). more like $300 per month for an older structure.

technologic - it seems that your maintenance is still within a good range. you were unfortunate to pay a premium for having low maintenance and not getting for nearly long enough to make it worth while. somethings you can't predict. having your maintenance raised twice in one yr (2010) speaks to the board's inability to create a budget and stick to it.

my old coop had to raise the maintenance a few times while i was there. when i moved in, a new super started there. now that the imbecile super got a better job in Chelsea, the new one saved the building over $50K in heat costs alone. that avoided a maintenance increase. it took him a few hours and adjusting a few malfunctioning radiators, so that the rest of the building didn't need to feel like they were in a sauna.

If you don't care about light quality LED bulbs save a fortune.

technologic, you really can' look at a single year. What's been the average increase over the last 3-5?

RS - I've only been a resident since 07, but I checked the board minutes before I bought the place and until then the maintenance charges were small, like 2% or so each year. I think 08 was the year it started heading toward 4 or more percent, and then this year is 8%. No end in sight apparently......

Call and ask.
Maybe its capital improvements. The key is to find out if the funds are being spent wisely and efficiently.

Mine's going up 5.25% for 2011. From 2003 to 2011 it's averaged 6.5% per year.

So much for the CPI

i'm fairly certain that in NYC real estate taxation looks backward by a couple of years, rather than present day. so although property values may be decreasing, taxes will continue to increase. in a couple of years they ought to decrease again, but by that time the city may have raised the basis level so no benefit might be seen.

Wbottom, I've got a million. Dildos that iz.

Yo ar!

CPI? What's CPI got to do with shelter based bubble assets? Nada you tool.

And to all the landed gentry crying. If an extra 8% in maintenance is starting to hurt, LIC was always an option. FlmaOz.

nwt, that seems high. i know kylewest keeps saying that there is a new norm in maintenance costs, but i have to wonder how that new norm affects people who have been in apartments for a long time. technologic assumes the old-timers are okay with it because their mortgages are paid down, but did they expect such large maintenance costs post-retirement? and the costs have been escalating rather wildly. 6% a year times 5-10 years makes for a very different change, particularly in a world of no interest.

I wouldn't have guessed 6.5%, but dug out an old check register. $1388 in 2003, $2300 in 2011. That's for a 1350-1450 ft² 2/2, so still not bad. Or so I tell myself....

tech..$1000 for a 1 bed is considered average....your mtce at 660 was really low before....but now you are in the market range and if you bldg has a 2 million dollar reserve fund you have nothing to worry about........if you really think that people would not buy a 1 bed apt with $1k mtce or more than you are not up to speed as to what 1 bed mtce is in manhattan.....i wouldnt worry much if i were you.but i agree its unusual to change the mtce 3 timex in 1 yr.

Monthlies increasing...rents, at what market will bear, flat...rent/buy will converge via cheapening of sales prices

There has to be a segment of Manhattan real estate where renting and buying come closer. Personally I think there will always be a premium on owning in that segment.
But the higher end segment, I don't know where that segment is, perhaps beginning at $1-2MM (yes a large range), Manhattan is a premium, in-demand product. As wealth becomes more concentrated in the upper end both in the U.S. and globally, that will benefit some select cities in the U.S. and globally, with Manhattan as one of the top few.

Hats off on the model analogy, w67th. Truly the work of a mad genius, fully freed from the shackles of society.

The tax portion alone has increased significantly for many buildings.

Hey maybe you should all install clap ons on the hallways. That ought to save you an add'l $10K.... clap on clap off, the clapper. It'll be fun for the kids.... "honey go outside and clap on the hallway lights bf mommy needs to throw out the garbage."

Is insurance cost down for next year?

should have bought in a building without an underlying mortgage.

our small co-op (8 apartments) doesn't have a mortgage and we have enough people in the building that we should fingers crossed have to take one out.

though i would feel more comfortable if we had a bigger reserve fund etc.

8 apartments. Reserve fund earns nothing. As long as the reserve fund is big enough to compensate for budget uncertainty, you may be better off. You can always assess when the need arises. If the 8 of you keep a bank account ready, its the same thing.

why does the money earn more sitting in one person's bank account rather than in the reserve fund?

We're boosting our maintenance this year by .75%.

Yes, the shareholders love us.

:))