New York City co-ops have been loosening up on some of their previously uncompromising standards to deal with the influx of condominiums that has brought about significant competition while they have come to mirror one another in terms of buyer appeal.
Numerous well-known and exquisitely designed luxury towers have sprung up in New York City, and the lines have become blurred for many of the city’s eager buyers who are trying to decipher the significant pros and cons of condos and co-ops.
To put this succinctly, condos do not require a board interview and, in general, allow buyers to put down less up front and finance a larger amount of the purchase price. Whereas with a co-op, you don’t own your residential unit; instead, you own a share of its managing corporation, and some of the monthly maintenance fees are tax deductible.
Co-ops, which have been notoriously stigmatized with rigorous board interviews, have been altering their admission standards, as applicants who have recently applied to known co-ops around the city attest in the New York Times. They now offer a more subdued, almost laissez-faire attitude toward new applicants, and this has been received as rather refreshing given the fact that co-ops tend to be more affordable than their counterpart, the condo.
On the contrary, condos have been requiring new fees and imposing additional restrictions, such as eliminating short-term rentals. Typically, and especially in the luxury- style towers that have become akin to New York City’s prime real estate, condominium owners see short-term rentals as diminishing the value of their residence, making it more of a temporary habitat where individuals are constantly coming and going. The alterations to their building requirements have been put into place to preserve each unit’s core value, and offset its limited reserve of funds.
The issue at the crux of the alleviation of standards is value, in that now applicants have the advantage of knowing in a shorter amount of time whether or not they pass the newer, friendlier version of the board interview. “So to enhance value, co-ops want to make the admissions process more user-friendly, without sacrificing the building’s financial and neighborliness requirements, because if a seller gets a good price for an apartment, that benefits the entire building,” Eva Talel, a partner at the Stroock, Stroock, and Lavan law firm, which serves the boards of more than 200 co-ops and condos throughout the city, told the New York Times.
The prestigious River House at 435 East 52nd Street has also eased its reins on the application process. Even though its co-op board president, John Allison, insists in the New York Times that their standards haven’t changed, he admits that they have arguably become more persnickety as they are scrutinizing applicants with a heightened focus on financials and the applicants’ level of friendliness, which would be a compliment to the building. This, Allison says has actually created a process that “has become easier than ever.”
The iconic New York City luxury co-op building perched over the East River listed the most expensive listing in the city back in September at a calm $130 million. The palatial 62,000-square-foot unit, referred to as “the Residence,” enjoys 30 rooms, eight bedrooms, and 10 bathrooms, as well as an 82’ swimming pool and full spa. Despite its luxurious standards, over the years there have been notable people who haven’t had the pleasure of passing their board interview. Just as recently as four years ago, the board began to reevaluate their standards fearing they might be warding off potential buyers. Thus came about their improved process, one that over the summer actress Uma Thurman astonishingly passed, considering that previously they were not cutting any corners for celebrities and had notoriously turned down Diane Keaton years ago.
Nonetheless, the hefty variety of chic condos which have been gracing the city continue to get snatched up—and the co-ops right along with them. Both are making changes to enhance the value of their properties and the benefits for their residents; and so far it’s been working since there doesn’t seem to be an easing up anytime soon in regards the erection of new properties—which includes another skyscraper by Extell Development in the near future. So far, buyers seem to be supportive of the changes: more condo listings are coming on the market at a quicker rate to keep up with the demand. Consequently, properties have been staying on the market a lot shorter with the average property reaching a sale roughly within 92 days of listing.