Manhattan Co-Op Maintenance Fee Raises

You should figure out how much of the raise is from taxes (almost entirely out of your control) vs. everything else. If the "all else" bucket is rising 6% / year absent any good justification, that would seem high to me.

Thank you, Freebird!

Someone with a clue how to read financials can look at them and pinpoint exactly why they are going up- could be uncontrollable issues like taxes (stated above) or choices like revamping elevators. You can decide if you like the reasons or not, but you need to pinpoint the reasons first.

Speaking as a board president, I can tell you that a number of things could be going on here.

-- Higher taxes
-- Higher utility bills
-- Raises in the compensation packages for building staff.
-- Board could be trying to build up your reserve in anticipation of a future major expense (new roof, new windows, etc.) and is trying to fend off future monthly assessments. Five years of 6% increases is a hell of a lot less painful than a year of assessments that equates to 12 months of double maintenance payments.

I dunno, there is a tipping point. I would rather have 12 months of assessments than five years of compounding 6% on my maint which can only go up but pretty much never go down and ultimately depress my unit's market value.

Speaking as a small building president / treasurer / de facto manager, our costs have definitely gone up by 5% or more this year compared to last.

We have not raised maintenance just because it's a chore. We tend to raise maintenance 10-12% every five years, rather than raise a few percent each year. Normally, it takes quite a deficit to convince my fellow shareholders that a maintenance increase is truly necessary. (Basically, we have to be an operating loss from all required fees before they will concede we have to raise maintenance.) We then normally raise maintenance to levels we think we think are sufficient to meet expenses 2-3 years out.

We have the maintenance v. assessment debate in my building, too. Many are obsessed with keeping maintenance low and want to assess for everything (including real estate tax increases, if they had their way). They want to run the building at break-even, or a slight deficit, and then "assess" a 13th month each year for reserves. So far, I've been able to hold them at bay -- this makes no sense and furthermore makes it looks like we're hiding something and/or are incompetent. For a small building, our financials are very good and will become excellent over time once we pay off our underlying mortgage. I'd rather have a responsibly managed building than a low maintenance building, but maybe that's just me. :)

I would rather have 12 months of assessments than five years of compounding 6% on my maint which can only go up but pretty much never go down and ultimately depress my unit's market value. "

The preference depends largely upon the demographics of your building.

"Rich" people can afford periodic -- almost routine -- assessments that approach or even exceed the size of their monthly maintenance payments.

Most "regular" people, though, don't have that kind of flexibility in their household budgets.

Yet again, Matt is spot on.....................

Yet again, Matt is spot on.....................

Sorry for the double post -- I'm blonde.

Nice way to cut off part of my quote, where I said there is a tipping point - meaning there is a sliding scale as to which to prefer. And who ever said anything about assessments the size of MT pmts. Its just a scale with many factors as to which is better (e.g., a percent increase over 1K is much different than 2K, what is your horizon if you plan to sell, etc. The 1%er vs everyone else point of view is a somewhat narrow minded analysis.

The 1%er vs everyone else point of view is a somewhat narrow minded analysis."

And yet quite accurate

If you have union people on permanent staff in the building, you have to count on at least a 3% increase per year to cover their contract. Above that, your building may be tacking on extra for anticipated heat/electric/insurance rate or usage increases plus some planned projects.

I bypassed buying into one building because they had not given any significant maintenance increases in years and wound up tacking on whopping increases recently. Why? They hadn't done any maintenance on the building for over 20 years to keep maintenance low. They had to replace the heating system, do façade maintenance, repair the terraces, and upgrade the outdoor walkways and lighting. They were projected a 9% increase for the upcoming year to cover loans for this work. Since they hadn't worked on the hallways and windows in more than 20 years, I passed on this one.

6% isn't unreasonable.

Did you spend the time to review your buildings financials before posting here?

If you have delayed maintenance etc then probably trying to catch up but treasurers don't increase co-op fees on a whim.....

6% every year would make me wonder how good a job the board is doing at keeping expenses in check.

Utilities seem to be a big area of complacency. I'm always amazed at how many buildings I see with incandescent bulbs in the common areas that are on 24 hours a day.

I had my lawyer look at the financials, as that is not something I am an expert in. I did do some quick calculations to look at expense increases, and nothing was over 4% YoY.

If the total's been going up %6 per year, but no single item has ever gone up more than %4, then the co-op is probably accumulating cash to build up the reserve.

The biggies in the budget are taxes and labor. In my co-op they account for 75% of the total. Over the last five years taxes have gone up 37% and labor up 21%. The budget's gone up almost 29%.

Our switching out the light bulbs, reducing the gardening expense, etc., are good for their own sake but don't make a dent.

lad said: "I'd rather have a responsibly managed building than a low maintenance building, but maybe that's just me. :)"

It's not just you. I feel the same way.

"Our switching out the light bulbs, reducing the gardening expense, etc., are good for their own sake but don't make a dent."

Amen to that.

For the love of God, please bring back the incandescents.

LED bulbs shaved almost 2% off our annual budget. Payback period was about three months. Hallways are cooler in the summer and the color temperature is identical to the incandescent bulbs they replaced. We did a trial on the ground floor for a month and not one person noticed a difference.

This will be our first full winter with upgraded boiler controls. The last couple of months of the previous heating season were very promising in terms of energy savings. Payback period here is on track for 1.5 years.

Sure, taxes are the biggest piece of the budget, but that's not an excuse for ignoring everything else. These are recurring savings that keep more cash in shareholders' pockets every year. I'd be pretty annoyed if I lived in a building where the board ignored easy opportunities to save money with no detriment to the tenants.

"We did a trial on the ground floor for a month and not one person noticed a difference."

Interesting. When we replaced the incandescents with CFLs, we got nothing but complaints.

Now we have gone back to the warm natural light of white hot glowing metal filaments, the way God Intended.

I'm not sure religion has anything to do with lighting choices.