High Maintenance Coop

Where is all the money going? If you don't have lots of staff, it's going to taxes, debt service, maintenance, and utilities.

Get yourself and other upset people onto the board and turn around the finances.

You get the financial statements every year, right?

Do you have an outsize number of shares?

You don't mention whether you have staff (doormen, super, etc). Keep in mind that both labor costs and real estate taxes have gone up dramatically over the past few years. Also, in a smaller building you have fewer shareholders to cover costs. You mention you have a three-bed, three-bath--is it a combo of smaller units? If so that can also kick the maintenance higher as each original unit would have had been assigned shares as a stand-alone apartments when the building was first converted.

Has your board described what the maintenance is going towards? Is it primarily operating costs? Are they trying to beef up the reserve fund? Did you have or are you expecting major outlay for capital projects?

Is the $6,000 inclusive of tax? In looking at real estate recently, ~$6K all-in seemed to be the norm for many 3BR/3BA on the market?

Seems to be more the norm in high tax buildings closer to the park. If the building is east of 3rd avenue, 6k seems very high to me. What is the location within UES?
Also, need to clarify that this is not a land lease building?

The 6k is inclusive of tax . I feel like we spend too much on labor - we have a doorman, live in super, handyman plus a porter. Seems excessive to me.. this is not a land lease which is why it’s very annoying bc I feel like the maintenance is like a land lease building. Also we pay the management company 75k a year - is that high comparatively?

not a land lease - which is why its infuriating. We have 4 people working during the day - a live in super, a handy man, a porter and a doorman. I'm not sure we need that many people... Also we are paying the management company 75000 a year - i'm not sure if that is high or low?

fuzzy, How about getting on the board and then convince majority of the shareholders to reduce staffing? A lot of people just complain rather than taking action which will take time and effort. You are complaining as if the board members are not paying their maintenance.

$75,000 / 60 units = $1,250 per unit annually for the maintenance company. That's less than my experience, but I've only lived in smaller buildings so we didn't have economies of scale.

Again, I'd go back to the financials. Instead of telling us how you feel about the labor expenses, quantify them. I'd caution you that some of your neighbors may like having a high level of service and wouldn't be on board with losing a porter or a handyman -- I'm assuming this staffing level has been consistent for some period of time.

Regardless, the single biggest line item in your budget is going to be real estate taxes, so even cutting your labor expense by half (which isn't realistic) will have a far smaller effect on the bottom line (i.e. your maintenance).

my building's management fee: $87,000. 200+ units, full service building (16 staff) . The management fee is fairly low on our list of concerns.

management fee of 75k seems in line. I think usually it is 50k-100k in Manhattan.

actually, for a 200+ units, 87, 500 is probably in line.

Fuzzy, How long have you owned your apartment? What was the maintenance when you purchased?

60 units is small to have a handyman but as flarf says, others in your building might be happy paying for this.

Fuzzy, if you pie chart it, what's the percentage of maintenance that is spent on taxes/labor/utilities (heat/light/extermination)/building upkeep?

The answer is to do the work.
Review the budget, which you are sent annually and probably ignored for years.
Prepare to spend a weekend going over it line by line.
Everything will cost more than you expect, if you’ve not been on a board, but get an idea of the big buckets. If you have multiple years of budget, look for where the increases are coming from.

Staff will probably be 1/3 of your budget, at that building size.
Being a coop and Manhattan, taxes could be 1/4-1/2.
You will likely find about 80% of the budget is pretty essential with very little room to play.
A smart board can annually find small savings to offset increased costs and keep maintenance growth to a minimum.

That said, your recourse is to join the board, or enlist others financially responsible to join the board and vote the existing board out.
What you will likely find, is that lot’s of people have complaints but no one wants to do the work.
You will also find that whoever new gets voted in finds new things to waste money on.
It’s like congress - once in power, few says no to spending.
Spending is sexier to advertise to residents than savings.
Complaining in forums and sending crank emails to the managing agent / board won’t get much done, though plenty try that.

I was a member of a previous board that kept increases to an average 1% for 3+ years, the thanks we got was a smear campaign and threats of litigation from a few squeaky wheels.
Once I left, the new board went crazy on amenities spending and I expect a 5-10% increase in the new year.
Even on a $1M budget, we did things like moved board meeting agendas to PDF only when we found out it was costing us $500 in printing per year. Re-negotiating $1k savings with the internet provider for all the lines building uses, threatening to fire a bad vendor and negotiate $4k savings with them instead, etc etc.

Exactly.
"What you will likely find, is that lot’s of people have complaints but no one wants to do the work."

As a shareholder, then a Board member, and now president (I drew the short straw), I always encourage everyone who wants to see changes or is just upset about how things are run in the building to join the Board. The job is hard work, unpaid, and often thankless.

+1 on everything steve123 wrote.

I have spent an enormous amount of time on the governance of my own building, and what I have found is that everybody wants to spend money on their personal priorities while fuming about others’ priorities. This is the essence of democracy.

I personally organized shareholders because I was apoplectic about increasing debt service cost at the expense of human service. I was in favor of a whopping assessment to pay down the underlying mortgage, plus an increase in maintenance to spiff up infrastructure.

I was transparent about my priorities, as were other shareholders who stepped up, and I am pleased to announce that our shareholder engagement increased tremendously with five out of seven board seats turning over over two annual meetings.

The good news: While it took two years of a lot more interaction with my fellow shareholders than I would have preferred, we now have transparent and democratic governance. That has made me feel a lot better about my building.

The bad news (just for me): Nobody cares about mounting debt and crumbling infrastructure. The majority of shareholders have made clear they are fine mortgaging the building down to nothing and fixing only those infrastructure issues that manifest as emergencies. While that is not the way I run my personal life, I have made peace with the preferences of my fellow shareholders and we are all actually friendlier/stronger for having had the discussion.

Thanks Ali for sharing. Fortunately, in my building, the board members all agree to make sure any building infrastructure issues are addressed right away and common areas are in good condition and we pay for it via assessments.

The devil is in the details: “the board members all agree to make sure any building infrastructure issues are addressed right away.”

The board whose overthrow I orchestrated swore that to be the case.

However, our building was hit with a $93,000 “emergency repair” in 2019 that would not have occurred had the board been taking care to make sure infrastructure issues were addressed “right away.”

When I questioned the board on the nature of the 2019 $93,000 “emergency,” they assured me they had no inkling of the condition that resulted in the “emergency” prior to 2019. I pointedly asked each member if they had read the FISP reports as they were periodically issued. They all assured me they had, yet were left speechless when I produced the 2013 and 2019 FISP reports and asked them to explain themselves anew. The 2019 FISP report made a direct connection between the board’s ignoring a preventive repair recommendation in the 2013 report to the “emergency” that was highlighted in the 2019 report.

Here is the take of just one person who has spent a lot of time on building governance: I do not
believe there are (m)any buildings in NYC whose boards are comprised of individuals who have the skill set/time/inclination to run their building efficiently. Accepting this inefficiency is just another of the many trade-offs one makes to own in New York.