Bad economic news is pretty much inescapable these days. You can’t turn on the TV without hearing about another round of layoffs or plummeting consumer confidence. The stock market is a roller coaster, retirement funds are shedding value, the housing market has gone mad and each day seems more uncertain than the last.
Given all that, it’s no surprise that co-ops and condos throughout the five boroughs are taking a new look at the way they do business—and so are the service providers and vendors with whom they work. The signs of changing times have been on the horizon for months now and seem to be growing more prevalent and pervasive.
Signs of Change
“The first spark that caused a lot of our co-op clients to really think about the cost of their buildings and doing business was when oil prices spiked this past summer,” says Manhattan-based attorney Adam Leitman Bailey. “Then doing the year-end financials, they noticed a big decrease in sales and not as much revenue from flip taxes. They started asking themselves, ‘How can we save money and get in better fiscal shape?’”
Mona Shyman, vice president of the Federation of New York Housing Cooperatives & Condominiums (FNYHC), and a management consultant, agrees. “As far as business goes, everyone is looking to save because no one knows what’s going to happen. Boards are being much more careful in how they spend money and how they enter into agreements. Boards are shopping around more before making purchases and making decisions.”
In fact, the recession is affecting how entire industries do business. “The recession has significantly impacted the insurance business for co-ops and condos in many ways,” says Sean Ahern of the firm Jacobson Goldfarb & Scott Inc., in Holmdel, New Jersey. “With the stock market floundering, insurance companies imploding right before our eyes and investment income becoming increasingly elusive, insurance analysts agree the soft market is over.”