In today’s difficult economic times, more and more co-op and condo owners and boards are constantly on the lookout for new ways to improve their bottom line. It’s one of the many reasons that more and more renters are moving into co-op and condo buildings, mixing and mingling with unit owners and shareholders in a ratio unmatched in recent years.
“Since there is a glut of newly-built condo buildings, many have switched to rental so they can fill up the units,” says Greg Carlson, president of Carlson Realty in Queens and executive director of the Federation of New York Housing Cooperatives & Condominiums (FNYHC). “If the building is already a condo, the sponsor may rent out the existing units.”
Today’s circumstances also mean boards may be faced with new situations and have to take a creative approach to filling units or working with existing residents. “Any time you’re in an economic downturn, a board is going to have a dilemma,” says attorney Robert Braverman of Braverman and Associates in Manhattan.
He cites an example of a young couple who have purchased a unit, then find themselves wanting to start a family. In normal times, they would simply sell their unit or shares and move on. These days, though, if they bought at the height of the market, they may not be able to get their money back and in turn, may decide to rent the apartment out to cover the cost of their mortgage. In a co-op, they would have to approach the board to ask their permission to rent. In the past, that would be something “the board would usually be reluctant to do,” Braverman says, but in these cases, where families are simply getting stuck, “Boards are more likely to have sentiment for these decisions” and may give the young couple the OK to rent out their apartment.
“When the economy is booming, it’s very rare that you would see that type of behavior,” Braverman says.