Co-Op Expenses

Cutting staff is tough for a variety of reasons. We have doormen (union) half the time and security guards (non-union) half the time. Some of our security guards are pretty terrible (literally are asleep when I leave early for the gym). When I spoke to a member of the board about it and suggested we not have night staff to save money since they don't do anything anyway, he said that the sponsor would see that as a reduction in services and could sue us. If your building still has unsold shares owned by the sponsor, this might play into whether you are able to reduce your staff...

There is nothing you can do about the salary expenses for a co-op or condo. Salaries are the bulk of your budget since the rates/benefits are defined and mandated by the union. Once you have a particular slot for staff on the books, it is virtually impossible to get the union to allow you to drop the position.

A group of neighbors petitioned to have a handy man added to the staff. With union benefits and mandated base salary, this would have resulted in an additional staffing cost per year of 80K. That would have resulted in an average PERMANENT maintenance increase of $60 per month, more for the larger apartments, less for the smaller ones. Of course, every time the union contract was renewed with a salary increase, the maintenance would increase again.

The residents reconsidered and voted down the proposal.

As for our phone bill, it went up astronomically one year. We traced it back to the phone at the doorman's desk. One of the staff was making regular calls outside of the country. The phone bill went down when we billed the person back for all these calls.

I have no idea how you could be running $1500/mo phone bills. I suspect you have multiple lines and probably have cell phones for one or more staff, but phone lines are cheap and should not have gone up in prices. The insurance issue is more difficult to gauge given the years in question bookend Hurricane Sandy. Did you have some unusual issues or claims, are you in a flood zone, change coverage, etc. In general, insurance prices have not gone up much, but it is hard to generalize. Whenever I ask friends or colleagues about the insurance on their buildings it seems to me that most are vastly underinsured, but my efforts to get my building to increase coverage have been unsuccessful.

All that aside, if your revenues did not increase, the 7.5% increase in expenses you reference over a 5 year period is not all that crazy if you have significant staff with wage and benefit increases.

my mid-sized co-op spends $4k a year on phone and communications (presumably, the cost of printing and distributing those little notices that say when the boiler is going to be out). $20K is insane.

The only reason people buy Co-ops is because they can't afford to buy in Manhattan. It's that simple. Co-ops prices are cheaper by 50% compare to a condo but they get you in the monthly maintenance. Just like Allan, he might only have 300K for that down payment but for the same 1,200 square feet unit it would require him to fork out 600K.
Allan might have the cash to make the money payment but poor Allan don't have the cash for down.