Maintenance Increases 2023?

You are lucky. We are in the range of double that as the labor and utility costs are way up.

Anything below inflation probably isn't enough.

For coops, all depends on real estate taxes, how much extra cushion you had in the budget the previous year.

Sure, bet that NYC isn't going to increase taxes on on Coops. I'll take the under.

4% here plus another assessment.

We did 3%

Our building just did sequential 20% & 5% plus an assessment because they spent 2/3 of the reserve during covid.. galaxy brain board. Too many residents living on mommy&daddy money to really be bothered to vote them out or complain. Maybe when the cashflow dries up and they need to get real jobs?

Meanwhile talking to one of my cousins, and his building has been doing below-inflation increases for years due to all the retirees in control of the board.. therefore they are operating at a deficit and spending down the reserve while scrambling to cut more services every year.

Begs the question - what % of buildings in the city are actually competently run, objectively?

Objectively meaning - healthy reserve, no operating deficits, no recent assessments outside "100 year storm" emergency scenarios, monthlies in-line with comps, no outstanding upkeep issues, and any board/resident drama being low-stakes stuff like color of drapes, landscaping choices and whether the doormen say "sir" or not.

Maybe 50%?

Steve,

You may be a little off in your "Objectively"

Most coops will have an assessment for facade work and major capital improvement projects as these are once every 5 year in nature and expenses can't be determined till the time your actual start doing it. Tax treatment of these "Capital Assessments" is also better for the owners when they sell.

Maintenance is expected to cover normal operating expenses plus say 5-10% surplus for minor capital improvements and unanticipated expenses. Unspent goes to reserves.

Reserves are really meant for significant emergency needs such as boiler breakdown needing a replacement, elevator needing a new cable and motor.

300 - I think the only part you are saying I am wrong on is the scope of the assessment frequency being 'no recent assessments outside "100 year storm" emergency scenarios'.

If we were talking every 5 years and for specific regular facade work that is predictable in timing but unpredictable in cost - sure.

If we are talking an assessment because "oops, we spent 2/3 of the reserve on.. stuff" then, no.

I completely agree reserve is there for unplannable emergency big ticket items like boiler/elevator/etc. It is not for things like doubling your landscaping spend, buying some furniture for the roof deck, and just general "spend first, ask questions later" behavior.

Agree. My test for financial management is whether the cash balance including reserves is stable or increasing over time.

Steve, I once owned in a building with a strong, effective board and an extremely competent resident manager, and the shareholders decided that the resident manager was too expensive and switched managing agents, and then a new crop of shareholders decided that the board's style of managing for the future was depressing our market value vs. buildings that have more of a style of managing for the present. So I don't know that winning is possible.

@front_porch

That’s one of my concerns !
Seeing the board burn years of savings in one term means no matter how responsible you are it only takes one bad election for your reserve to be converted into fun money.

Hey we got X million in the bank, why not spend it!

So what’s a ceiling on reasonable and prudent reserve beyond which you are just funding future potential waste.. possibly on stuff you don’t like or after you move on and sell?

Steve, Why don't you run for the board in your building? Most of the board seats have a limited time appointments.

@300 did it a few years
Choice or crazies in control vs being in control & dealing with crazies

I look at the current increases in dues as like a reverse “not be on the board” salary lol
I could save $Xk/yr if go back on board and crack down but the hourly ROI for that effort is meh

@300 did it a few years
Choice or crazies in control vs being in control & dealing with crazies

I look at the current increases in dues as like a reverse “not be on the board” salary lol
I could save $Xk/yr if go back on board and crack down but the hourly ROI for that effort is meh

I've seen tons of bad boards, mismanagement, etc in the last 40 years. But nothing compares to the mix of incompetence, malfeasance and outright fabrication/lying (including managing agent and accountant outright lying on annual financial statements) like in my last building comprising 3 1850s row houses on West 9th Street.

Like knowing the facade needed a $75,000 paint job in 2004 (visible from street peeling/spalling), not doing it, but saying there were no capital projects needed, and it turned into an $850,000 facade repair in 2016 (2X annual budget). Or when I brought up the maintenance wasn't covering expenses at Annual Meeting. President of the board asked me if my calculator was broken. Both managing agent and accountant denied it. Then the first statement at the next annual meeting by the new board president was "WE discovered that the maintenance wasn't covering expenses." And when I asked for the accountant to be replaced because of their prior statement the board president responded with "No because we saw emails between the accountant and the last board letting them know that."