Co-op owners, hang onto your hats and wallets

You’re in for a rough ride.

If you have already received notice of a January maintenance increase, maybe you’re thinking of moving.

Don’t bother: Thanks largely to property taxes, most residents of co-ops and condos in New York City face a punishing boost in their monthly housing costs as early as next month.

If you own an apartment, look at the column labeled "Class 2."

Do the rates depress you?  It gets worse if you go farther back in time: When it became clear to me that my own maintenance likely would go up 8-10 percent, I decided to see whether my building on Manhattan’s Upper West Side was atypical.  Based on my casual survey of a few property management companies, my neighbors and I are not alone.

One call I made was to the Council of New York Cooperatives and Condominiums, which seemed like the most logical source of such information.  Unfortunately, I was mistaken.

“I’ve heard of everything from 2 percent to 15 percent,” said the woman who answered the phone, reluctantly giving only her first name and virtually no other information.  Since she has a far loftier position than receptionist, I won’t embarrass her any more than necessary by identifying her.

Elliman Property Management and Akam also proved to be strangely close-mouthed.  Cooper Square Realty said it was too soon to have useful numbers.

But Michael Wolfe, president of Midboro Management, which numbers 78 buildings in its care, was responsive.  Having completed budgeting for those in the majority that run on a calendar year, he reports an average maintenance increase of 5 percent.  Says Wolfe:

Although the real estate tax rate imposed by the city is less than originally posted by the Department of Finance many months ago, real estate tax increases remain the driving force behind the increases.  Other factors include: (1) Water rates have increased 25% over the past two years; (2) [The labor union] contract expires in April and (3) Utilities rates continue to be volatile.

At the smaller A.J. Clarke Real Estate, Vice President Michael Rothschild says maintenance fees will be rising 5-8 percent on average for the properties that the company manages.  He explains that the way taxes are levied–based on a five-year average way too complex to explain here–buildings are always playing catch-up.

“The taxes are just a killer,” Rothschild declares.

The City Council has raised the ceiling for quarterly payment of property taxes from $80,000 to $250,000. Cooperatives with assessed value averaging less that $250,000 per unit and condominium unit owners with assessed valuation of less that $250,000 may pay property taxes quarterly.  Entities with higher assessed valuations may pay semi-annually.  (You can find everything else you wanted to know and were afraid to learn on the city’s Web site.)

Assume that the maintenance of a two-bedroom apartment in a modest building has been around $1,600 a month.  If the maintenance rises just 5 percent in January, that translates to an $80 slap in the face each month, or nearly $1,000 a year.

Homeowners holding onto their budgets by a thread can complain about maintenance fees all they want, but you can be sure they’ll never go down, at least not in my lifetime.  And I expect to live a long time.

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Malcolm Carter
Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022

M: 347-886-0248
F: 347-438-3201

Malcolm@ServiceYouCanTrust.com
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