When buyers purchase apartments, they also purchase access to the condo or co-op’s shared amenities. Depending on the scale and financial demographics of the building, those amenities could be substantial; during the real estate boom of the early 2000s, free Continental breakfasts and in-house pet spas weren’t unheard-of. Even in more modestly appointed co-op and condos, pools, gyms, and so forth are often part of the package marketed to buyers. In a post-Recession economy however, boards in some buildings are re-evaluating the importance of certain amenities.
Boom vs. Bust
Not very long ago, condos did not offer amenities—unless “amenities” includes things like “elevators” and “functional heat” and “windows that open.” “Amenities are relatively new things,” says Elliot Meisel, an attorney with Brill & Meisel in Manhattan. When, say, Dorothy Parker was shopping for a new place to live, living spaces were pretty basic. With each successive economic boom, buildings offered a little bit more in the way of extras. “Most of these buildings that were co-ops and converted rental buildings didn’t have amenities,” Meisel explains. “Or they would have minor ones, like maybe a reading room off the lobby, or storage rooms. But very few buildings had anything like a gym or an exercise facility. In fact one of the first ones I recall doing was 1125 Park Avenue, where they built a basketball court and an exercise room in the basement. And that was carving out space that was previously unused or used as storage.”
After the go-go 1980s and the subsequent dot-com explosion in the early 2000’s, amenities became a way for smart developers to make their buildings more special. Pretty soon every building had to have a weight room, or a pool, or staff masseuse. That was the unspoken law of the land until the collapse of Lehman Brothers in 2008 and the ensuing Great Recession. Economic realities forced the pendulum to swing in the other direction, and boards began to ask themselves if all these bells and whistles were really necessary—because they certainly aren’t free.
“You have these first and second generation condos with gyms and bicycle rooms and various other amenities, and all of a sudden you have all these newer buildings popping up that have bigger fancier facilities and better lobbies,” Meisel says. “And so you have a conflict among the residents of the other buildings, which is, ‘Times are tight, we don’t have a lot of money, our common charges are going up because of heating costs and labor costs, and our real estate taxes are going up, we really can’t afford to keep it up.’ And then you have the other side, which is saying, ‘In order to uphold the values and the prices of our apartments, we can’t afford NOT to keep it up. We have to be competitive with all these new buildings offering these fancy amenities.’”
Cost & Controversy
Fancy doesn’t come cheap. With deluxe or high-maintenance amenities, “There is a cost, and they’re usually considered a pretty important part of the building,” says Robert Braverman of Braverman|Greenspun in Manhattan. “So at board meetings I often see issues with a pool, issues with a spa. Some of these amenities are operated by third party vendors, particularly pools and gyms. Pool operating hours are always something that people debate, because you need to have a lifeguard, and there’s a cost to that. So dealing with these things is a decent part of the board’s pie.”