In any business—whether it's a flower shop or a gas station—there are those who have more dollars to work with, and those who have fewer. It's the same for co-ops and condos. New York is home to a seemingly endless variety of residential buildings, from four-unit boutique co-ops with apartments selling for eight figures to more modest buildings with 40 units going for six figures apiece. Some buildings receive government subsidies, some are involved in federal funding programs. Still others have former U.S. presidents—or Hilton sisters—living in their penthouses. Up and down, from the highest financial peaks to the valleys below, charting the financial differences between the thousands of co-ops and condos in the five boroughs can be dizzying enough to require a few doses of Dramamine.
Knowing that every structure is different, the real question becomes, how do these buildings tackle the financial issues that each and every co-op and condo must face? From underlying mortgages to renovations and repairs to taxes, do higher income buildings really have a clear advantage over their less affluent counterparts, or are the differences not that different after all?
Contributing to the Greater Good
When it comes to assessments, it seems like the chasm between haves and have-nots might be fairly deep. Surely, a board can raise more revenue from a building full of hedge fund analysts than a building full of middle-class families.
"Properties with residents in the highest income brackets have the greatest financial ability to 'tax' for the financial needs of a property," says Jay Novet, founder of Budget Saving Strategics in Great Neck. However, "limits exist for going back to the well too often for assessments to increase the reserve fund or [address] higher maintenance costs."
Relying on the ability to increase assessments whenever and wherever necessary can get a board in trouble, though. "Regardless of income, human history has repeatedly illustrated that everyone hates taxes," Novet says. "Residents will simply toss aside the offending board and/or property manager" if they feel they are being over-assessed.