building at 35 Sutton Place

@steve123 - exactly.

@30yrs - your proposed solution does nothing for the individual who just wants a place to live within walking distance to their office and has no interest in perpetuating discriminatory practices.

@30yrs I already have a day job. I don’t want to be structuring $500mm real estate transactions in the little spare time that i have.

I just want to be able to purchase a housing unit I like and can afford without having to guess where i need to donate and how much in order to get accepted (or get rejected anyway because i am not a nepo baby and did not go to the “right” preschool or whatever).

Then move to Larchmont or Greenwich or Southampton and buy a house on an acre of land with a nice fence. Or a townhouse if you really want the city.

Meanwhile I talked today to a smart guy who was about to buy a coop on Sutton. Had no idea what he was getting into! Thought they basically worked the same as a condo.

They are supposed to work similarly and in many cases they do. This is a local problem that outsiders are entirely unaware of.

Nada, I do itemize. (or at least my accountant does.) Many of my charitable contributions are driven by my clients guiding me to causes that are important to them -- the latest was an attorney who pushed me towards MSK. We're buying a condo now, but I have owned multiple co-ops and I find it tough to believe that any board I've been in front of would have any political reactions to that being a "right" or "wrong" charitable choice.

I dunno…

Donation to cancer center => affinity towards cancer victims => cancer in the family, or increased risks thereof => financial burden to shareholder => financial burden to coop => reject.

Creepy.

Good on you for donating more than $18k/yr like clockwork. But an apropos reading could be: $25k/yr charitable giving on $250k/yr income => overburdened financially => reject. Or $25k/yr donations done annually instead of large slugs via DAF => wasting $9k/yr after-tax on $130k/yr in after-tax income => financially irresponsible => reject.

Creepy.

Judging people by reading into their spending habits gleaned from tidbits of their records makes for fun gossip, but when you start exerting power over their lives based on such assumptions, well that’s just … creepy.

Re: "Meanwhile I talked today to a smart guy who was about to buy a coop on Sutton. Had no idea what he was getting into! Thought they basically worked the same as a condo."

That reminds me of the financial genius who ended up losing over $1M in capital on his purchase in our building because he did not understand the coop thing. When you see something that seems too good to be true, it usually is.

Awful lot of strawman examples here that aren't applicable to the vast majority of cases, and the most likely ones where discrimination is likely to be happening.

If you're donating cash, there is no place on the 1040 or Schedule A that identifies to whom you have given money (and a supporting schedule is not to be submitted). The only thing reported is the total amount (Schedule A, line 11, for those playing along at home). If you've donated non-cash (typically property and securities) you have to disclose where it went (Schedule 8283) and how the valuation was derived. I'd suggest that a missing 8283 in a board package would not be noted, unless the amounts were truly material (perhaps >50% of claimed amounts on Sch A, line 14) - most boards aren't going past the 1040 or Schedule A, and that's mostly to look at unusual income sources.

(In case you're structuring the purchase of 405 E 54th (referenced in 30's link), please consider the plan of the G line, with the kitchen in the bedroom. Truly unique - should command a significant premium!)

No Form 8283 => donating cash instead of appreciated stock => financially irresponsible (if you had appreciated stock but didn’t donate it) or financially irresponsible (because you don’t own any stock).

>> most likely ones where discrimination is likely to be happening

Strawman perhaps, but normalizing such behavior just results in different forms of discrimination. Is belonging to the $18K+ donor club really different than belonging to the Union Club? What are you saying about those who (say) choose to support their communities in other non-1040-visible ways, such as non-deductible political contributions or simply financially providing for extended family in (say) the homeland from which they hail.

All I hear is "I want, I want, I want," coupled with "and I should be able to sit on my couch in my underwear and be able to find it."

If you want those things the are readily available. Just buy a Condo. But if you want a low price because there are hoops to jump through, and you want them to be the hoops you like rather than the hoops from existing clubs, then the only answer is to start your own club. No one is forcing anyone into these buildings. People are whining they they can't get CHEAP REAL ESTATE. And the reason it's cheap is because of the hoops. So people want the benefits without the qualifications.

Let's remember that if the only thing which was done was to remove all these hurdles, it wouldn't be cheap anyone and these same people wouldn't want it anymore. YOU CAN'T HAVE EVERYTHING.

If you want cheap Real Estate and can pass the current Boards, you already have that. If you want cheap Real Estate with a different set of arcane rules, the only choice is starting your own club. If you want an apartment with no rules, you already have that - it's called a Condominium.

But what you don't get is cheap Real Estate BECAUSE OF THE HURDLES and then say "but I want it with no hurdles" because simply removing the hurdles will make it not cheap Real Estate anymore. Schrodinger's Real Estate.

@30yrs I already have a day job. I don’t want to be structuring $500mm real estate transactions in the little spare time that i have."

Then don't. And also stop whining about not receiving the benefits. I know people here generally think Real Estate Brokers get paid for nothing. Personally, I HAVE done such deals, and I've gotten paid (handsomely) for it. Don't tell me how you don't want to do it "because you work for a living" (implying I don't) and then also tell me how you "deserve" the same deal as people who will and have worked for it. It sounds like some entitled brat who grew up with participation trophies wondering where their trophy is for doing nothing.

Do you have the slightest concept how much work goes into every single deal where we buy something below market? Or that we need due diligence on about 100 properties for ever one we buy? Or do you think guys like us show up at foreclosure auctions and Oprah stands in the Rotunda saying "And here's a deal on a property for you...and here's a deal on a property for you... and here's a deal on a property for you." If you don't want to work for it then STFU and take what you get in return for no work.

"Donation to cancer center => affinity towards cancer victims => cancer in the family, or increased risks thereof => financial burden to shareholder => financial burden to coop => reject."

huh?

>> Personally, I HAVE done such deals, and I've gotten paid (handsomely) for it. Don't tell me how you don't want to do it "because you work for a living" (implying I don't) and then also tell me how you "deserve" the same deal as people who will and have worked for it.

I don’t think people are asking for broker/RE professional-level deals here. I think people just want to be able to purchase cookie-cutter apartments listed on streeteasy.

>> So people want the benefits without the qualifications.

No. People 1) want to know what the qualifications are and 2) to make sure these requirements are consistent with fair housing laws and are not discriminatory.

>> If you want cheap Real Estate and can pass the current Boards, you already have that. If you want cheap Real Estate with a different set of arcane rules, the only choice is starting your own club. If you want an apartment with no rules, you already have that - it's called a Condominium.

No, you don’t. In the Sutton Place/Midtown area there are very few condo buildings of the same type as the coop buildings (older, with fewer amenities). You have either ultra-luxury new construction condos on billionaires row, or older stock coops. I am just not interested in golden toilets and pet spas on premises, or billionaire row pricing.

At the time when i was shopping for a place, i found three or four older, no frills condo buildings in the neighborhood, and they were priced similar to coops. The issue was, there were only a few apartments for sale in those condos and none of them were 2brs. Majority of available for sale housing in midtown east and sutton place is coops, and arbitrarily excluding various categories of people from living there is not okay in 2024 in my opinion.

"In the Sutton Place/Midtown area there are very few condo buildings of the same type as the coop buildings"

Isn't that the same in most places? But you do have options like 444 East 57th Street, a prewar Condominium. You may not like the options, but they are there. Apartments generally come off the rack, especially if they aren't brand new. You don't get to pick everything you want and then have it exists where you want it, for the price you want, etc. Like when people call and ask for prewar alcove studios.

Or when we used to advertise in the Sunday New York Times. People would call and expect everything (prime location, low maintenance, etc). And if there was one thing not on their list they wouldn't even view the unit. And when asked they would come up with a list similar to unrealistic people listing "what I need in a husband/wife." And if you told them "that doesn't exist" they would say that they know they do because "I've seen them."

Firstly, you have to wonder if they actually saw one why they didn't buy it. But secondly what they meant was that they saw ads and conglomerated them. They saw one with low maintenance, another which was large, another with a view, etc. But they didn't actually see units which met all their criteria in their price range. Because if they had they would have bought it.

In a lot of cases those who get rejected had some clues it was going to happen but insisted on doing things their way. And this conversation reminds me of that. But if you want to pass a Coop board, try to figure out what THEY want to hear (not what you want to tell them) and tell them THAT (even if it's not exactly the truth).

30yrs, in your estimation, is coop compliance with fair housing laws too much to expect / desire?

FTR, while reading into personal characteristics via charitable contribution declarations on a 1040 may lead to effective violations of fair housing, I mostly just fine the practice creepy. I have no interest in old, cheap coops — nor old, cheap condos — but simply think it’s inappropriate behavior from closed-minded busybodies who think too highly of themselves and their own personal interests.

>> No. People 1) want to know what the qualifications are and 2) to make sure these requirements are consistent with fair housing laws and are not discriminatory.

Well-said.

+1 on what Krolik said, and what nada quoted: "No. People 1) want to know what the qualifications are and 2) to make sure these requirements are consistent with fair housing laws and are not discriminatory."

If I were a person foreclosed from an entire neighborhood because of an immutable trait, discrimination based on which is prohibited by law, I would be furious. I don't know how prevalent this type of discrimination still is; I know it is not present in my building, but I have no doubt it is alive and well in any number of buildings.

"30yrs, in your estimation, is coop compliance with fair housing laws too much to expect / desire?"

I think the whole discussion is unrealistic. Even if the person meets any guidelines -and this is where I think all proposed laws so far fail - they aren't outlawing interviews and Coop Boards can reject because "we just didn't like their personality." And unless (as actually occured in a case) one of the Board members writes a note saying "black person" it's really tough to prove. And since a lot of "No Blacks, No Jews, No Gays" (or whatever) actually accepted one or more of the groups "not allowed" how do you make a convincing argument in court that those groups groups are banned if they can even point to one who is a shareholder?

And I'll repeat that a significant amount of Board rejections occur due to attitude. You see it right here any time someone posts that they were well qualified so the Board had no right to reject them. But just a Board getting a whiff of that same attitude can lead to rejection. Which isn't a Fair Housing violation. So when someone proclaims themselves qualified and immediately goes to illegal discrimination, it might just be people declaring themselves qualified leads those same people to not try hard enough to kiss the Board's asses hard enough to get accepted.

I apologize to Krolik in advance for picking on them here:

There are some Boards who would reject them simply based on their posts on this forum if they were able to connect the dots to IRL identity. And AFAIK that wouldn't be a fair housing violation.

And if a Board rejects without an interview I think it's hard to make an argument that there wasn't something in the applicant's "paperwork" the Board didn't like (or they objected to the price, or they had some issue with the seller, or, or, or). There are just to many "legitimate" (in terms of what they are legally allowed, not a value judgement of whether or not they should be allowed) reasons they can reject on. Remember the "business judgement" rule and how wide a latitude they have, or the Pullman decision where courts can't even examine facts to determine if a Board was acting in good faith.

You would basically need to throw out everything about Coop government and start over, and I just don't see that happening.

"If I were a person foreclosed from an entire neighborhood because of an immutable trait, discrimination based on which is prohibited by law, I would be furious. I don't know how prevalent this type of discrimination still is; I know it is not present in my building, but I have no doubt it is alive and well in any number of buildings."

I find this logic faulty, because we know they aren't foreclosed from an entire neighborhood because there's at least one building (and I suspect many more) that don't engage in this type of discrimination.

There's an awful lot of dogma in this thread, as well as starting out with falsehoods and then building entire logical arguments based on those falsehoods.

steve123,
Which figure do you think more accurately represents reality:
1) An article from 2015 discussing a potential sale worth over $500 million, or
2) The actual 2016 sale for $390 million?

Of course numbers appear in the City Register which don't reflect the actual transaction so there is probably no way of knowing with certainty.

I think the discrimination that goes on in the bulk of board turn downs is legal; in my building's case, it is discrimination based on the amount of money someone has pure and simple. Rich people only want to live with other rich people in theory. However, in practice this is nonsense because some who were rich when they entered the building are not rich in today's terms, and I find it annoying that they are in a position to turn down those who have more resources than they currently do. Were I an up-and-coming young professional with resources and potential greater than those of many who live in these buildings, I would be annoyed that I was being turned down, so I understand Krolik's frustration.

On the other hand, @30 years, I do see your point: The whole coop thing is what it is - inefficient, unfair and ridiculous. That is why coops are so heavily discounted. I am one who knowingly signed up for the coop nonsense because the discount was too large for me to discount (pun intended). There are many for whom no discount would be enough.

Nevertheless, I would still be annoyed that I was not eligible for the discount that others got through no effort of their own. While what goes on may not be illegal, it is patently unfair and not grounded in reason.

MCR,
While I agree with everything you wrote, LIFE is unfair. That doesn't make it illegal. I would love to have been gifted a huge trust fund (rather than working since I was 8 years old and opened my first business), live in a multi-million dollar home through nothing I did myself, eat out at Per Se, Gramercy Tavern, etc every night of the week, have a Mercedes, a Ferrari and a Land Rover, buy multiple $300 bottles at clubs every night, etc.

Instead I live in a relatively cheap rental, cook pretty much all my own meals and almost never eat out, drive a 2010 Camry (although probably the best 2010 Camry in NYC), and when I go out it's mostly to places where I don't pay for shit due to the last 40 years of building up a certain reputation and following (although that makes going out more like work because I need to be "on" and in character).

And yet I'm privileged enough that I probably have it better than 99% of people. So I could complain about how "unfair" it all is while pointing to those who were just gifted a better life than me. Or I could look at all those LESS fortunate than me and STFU.

So when I see people complaining about how unfair it is that they don't get to buy their million $++ apartments in exactly the neighborhood they want, in exactly the building they want to be in, at the price they want to pay, and then renovate them to exactly their vision, while many of them are also talking about removing rent protections from people who who have been in the same units they have occupied for decades, and saying THEY don't have any rights to stay in the same neighborhood and it's fine if THOSE people are forced into the street because they can't afford current rents (just a different type of economic discrimination) it really rubs me the wrong way as some entitled BS.

@30yrs - I hear you. Many complain about those things that unfairly adversely affect them, without factoring in all the things that unfairly benefit them. I feel like life is unfair, but I feel that has net/net worked out to my advantage (I am the beneficiary of lots of unfairness while also being adversely affected by some unfairness, but the benefits in my case outweigh the adverse effects in my opinion). I have gotten better at compartmentalizing in the past few years and try hard (though I don't always succeed) to confine my comments to the particular thread at hand. Then again, when a thread gets as long as this one, who knows what lurks dozens of comments above such that your comment on rent stabilization may well tie directly to a comment in this thread.

As an example, the top 2% of asset holders in the US, which starts at about $2.5 million and sounds like just about anyone who even applies for one of these Coops has benefited inordinately by ZIRP, which was paid for on the backs of the other 98% through inflation and other byproducts aren't complaining about how unfair that is (and in my personal opinion any valid cost/benefit analysis would show the net good to society is way further in the negative due to ZIRP than Coop discrimination). Don't get me twisted and try to claim that I'm saying this makes illegal discrimination ok. But what I am saying it that groups which are extremely benefited by "unfair" policies don't exactly hold the moral high ground when the vast majority of total "unfairness" has benefited them and they complain about the relatively small amount of unfairness which goes against them because they feel they are entitled to win at everything, everywhere, every time.

I will also point out that "fairness" can be totally subjective and is subject to changing social norms. For example you have two groups currently, one who believes bakers should be required to bake wedding cakes for gay marriages and one who thinks that forcing bakers to make cakes for gay marriages is "unfair" because it makes them violate their belief systems. Personally I don't see how we legalize gay marriage and then decry that being enough of a protected class to call the the refusal to bake those cakes illegal discrimination. But most decisions are "unfair" to the loser. And look at all the illegal discrimination against protected classes which is allowed in 2 family houses. How is that "fair"?

To clarify, people are pretending that what I'm saying is that illegal discrimination is fine, when that's not what I'm saying. The claim being made here is that if an applicant feels in THEIR opinion that they are qualified that rejections must be for illegal discrimination. Then following up with the claim that minorities are foreclosed from buying in the entire neighborhood.

But then the truth is that we have a Board Member from a Coop in the neighborhood who believably states that they will reject people, but not due to illegal discrimination. This in and of itself invalidates the entire argument which starts from the point that all these rejections MUST be due to illegal discrimination while presenting ZERO actual evidence and ignoring that there are any number of valid reasons for rejection and presenting this straw man that opaqueness MUST be due to discrimination when in fact many times it's because you can't codify "it depends on how we feel" especially when dealing with non-professional Board Members who can't even really read a financial statement. You can say "then they shouldn't be reviewing purchase applications" but that just totally ignores reality.

And to some extent these arguments run counter to our entire justice system. The argument is akin to making an allegation of wrongdoing by Boards without any evidence, and saying that it's up to them to prove themselves innocent, rather than the presumption of innocence and the need to prove guilt beyond a reasonable doubt. Kind of witch trial-ish.

>> I think the whole discussion is unrealistic. Even if the person meets any guidelines -and this is where I think all proposed laws so far fail - they aren't outlawing interviews and Coop Boards can reject because "we just didn't like their personality." And unless (as actually occured in a case) one of the Board members writes a note saying "black person" it's really tough to prove.

I find the “why bother trying” line of reason vacuous. The same could have been said about corporate hiring, fair housing in non-coop rentals and sales, etc. When the laws go on the books, people start getting more concerned about their behaviors. Legal advisors explain how to steer clear of potential violations. Board members behaving with impunity start getting shut down by others. “That’s nice that you feel every young family that wants to buy happens to seem like they would place undue strain on the building’s common elements, but I don’t want a public record of such rejections lest my ass get sued”. People will be less willing to let questionable behavior slide. That’s how the real world tends to work.

complex tax codes are good for the lawyers accountants, lobbyists, politicians and bureaucrats .

>> But what I am saying it that groups which are extremely benefited by "unfair" policies don't exactly hold the moral high ground when the vast majority of total "unfairness" has benefited them and they complain about the relatively small amount of unfairness which goes against them because they feel they are entitled to win at everything, everywhere, every time.

You know I hold the same views as you on what I, some years ago, started calling the “whiner class”. But like a broken clock, every once in a while they might be whining about something legitimate.

MCR, remind me what the issue that was holding up approval from one of your board members for a perfectly qualified, checks all the boxes, former childhood resident? And what was the resolution?

Shareholder just moved in. The stated reason for hold-up was questioning the valuation of an asset on the financial statement. It was ridiculous because the asset in question was superfluous. Speculation on this board was that board member who was holding up the transaction did not like the price. We overruled his ridiculous request for more information and approved the transfer.

one for the good guys

Why didn't they let Buddy Fletcher buy more apartments in the Dakota?

I think the issue with BF and The Dakota was they did not want one shareholder to hold the large percentage of the corporation that he would have held had he been allowed to purchase yet another unit. If that was the case, I could understand that denial.

MCR, thanks for the reminder on your coop.

That was not the issue with BF and the Dakota. The board rejected because of his financials:

https://archive.nytimes.com/dealbook.nytimes.com/2011/02/02/the-money-manager-who-is-suing-the-dakota/

In a statement, the board of the Dakota said it had not yet reviewed the lawsuit, but that “Mr. Fletcher’s application to purchase an additional apartment in the Dakota was rejected based on financial materials he provided.”

And whatever irregularities they found and disclosed as part of their defense in the lawsuit led to his hedge fund’s unraveling:

https://www.vanityfair.com/style/scandal/2013/03/buddy-fletcher-ellen-pao

>> As the Dakota board would tell the court, Fletcher’s application had been rejected because the co-op’s finance committee—a group of high-powered financiers and lawyers—had concluded that Fletcher could not afford the apartment. Far from being a successful hedge fund, Fletcher’s F.A.M., according to the Dakota, was overstating its assets and losing money. But that was only the beginning. The Dakota lawsuit—which is winding its way to trial in New York’s State Supreme Court—set in motion a series of events that have put Fletcher on the ropes financially. Today, F.A.M. is being sued by three Louisiana public pension funds trying to recover $145 million; his main hedge fund filed for bankruptcy; others were ordered liquidated by a Cayman Islands judge; and aspects of his business are under investigation by the S.E.C. and the F.B.I.

Longtime friend of Buddy, but not his broker on that (or any other) deal.

Tragedy. And his ex wife wrote an editorial in support of Elizabeth Holmes. But then there's the former Secretary of State.

>> Longtime friend of Buddy, but not his broker on that (or any other) deal.

Yes, I recall. With the perspective of 10 years since it all went down — the lawsuit, the hedge fund’s issues, etc. — what is your take on it? We can all read the same press articles, the same court papers, etc., which doesn’t paint a positive picture generally. But in your head, you have to reconcile that against the friend you know.

Interesting read - I had not followed all that.

Let me get ONE more apartment then I'll stop my fraud.

MCR>> Interesting read - I had not followed all that.

I can’t believe you, of all people, missed that story!

@nada - Particularly since they moved into our SF building after they sold the St Regis apartment.
The part of the article that I liked the most was about how it was the Dakota board's sophistication in looking at the finances that sparked the downward spiral. Oh what I wouldn't give to have a board that could read a financial statement.

I am counting down the days until the term of my current board duty is up. I feel like I get dumber every time I have to sit through a meeting - hours of my life I will never get back.

I got back on the board to help the one board member who does all the work, and while this term has been productive, I just don't care enough to spend precious time doing work for neighbors who don't share my personal values. There are some shareholders in the building who would likely be excellent at managing the building, but sadly they aren't the ones who want to be on the board.

Strangely, members of condo boards I’ve interacted with have broadly been anywhere from extremely capable to “Uhh, do you know who you are, and why are you wasting your time on this?” I have always been appreciative of their efforts and (frankly) patience to deal with it all on the condo’s collective behalf.

That part of the BF saga always struck me as bizarre. Why lock horns with a board that has you dead to rights, when locking horns means forcing them to publicly expose you on something they would’ve been advised to otherwise stay quiet about.

@nada - I would bet money that those on the boards in buildings where you have lived are significantly more capable than those on the board of my building for any number of reasons. I would be delighted if I thought the majority of our board was actually interested in the collective's best interest as opposed to their own. I can't help but notice that the majority are entirely passive unless a given issue is likely to affect them directly. If anything involves reading an attachment, forget it. They ask the Managing Agent to explain everything, and the Managing Agent will just shoot from the hip because they don't care. Every meeting is painful, and it 100% comes down to the quality of board participation and oversight. They will listen to reason if you gp through the painstaking process of spoonfeeding them, but I refuse to do that public service for a community that I see maybe 30 days a year.

UESer, i am sorry to hear about your experience. We recently closed in building and am baffled by your situation. I had debt (mortgages on other properties) and we took a mortgage (max allowed) to buy here. The board didn't question our financials, which other than debt sound similar to what you stated