What do HOA fees get you in NYC?

[+ BenjaminNicholas]

$4k is becoming a deal for Manhattan and it gets much worse as you move closer to the park (or Park Ave).

 

What you're really paying for is what the airline industry lovingly calls not compromising the integrity of the front cabin

 

Setting an HOA high allows for a lot of board wiggle room, fewer special assessments and while top-tier, white glove buildings still have their fair share of behavioral problems, it immediately weeds out a lot of people who would simply never qualify.

 

Here in Dallas, a high HOA runs about a quarter-to-half of that and gives you a much newer, nicer building.

[KeepItReal]

also, it's likely that labor is not the biggest expense - we have common areas that are mortgaged and need to be paid for (and cleaned and cllimate controlled) collectively including a lobby, stairwells, hallways, a bike room and a storage room, and we also have three retail space that needs to be paid for when there is not a tenant - recently, a restaurant space we had was vacant for over a year, and they pay a lot of rent - rent that we have to make up when they are not there - and all of this is in addition to real estate taxes

 

...

 

the way i look at it is comparing my experiencce with my brother - he lives in a huge house in the woods of new hamsphire for which he pays a mortage. he's got a huge yard - that he has to mow, fertilize, and water - and he has to purchase and maintain the equipment to do it - he's got a big patio in the back and a long driveway - both of which need to be cleared in the winter of snow and ice - he has to heat and cool the house (which he pays for, and which involves at least 3 vendors - the oil people, the electric company, and the people who maintain the system) and not only does he have to take care of all of the maintenance of the house - cleaning the bathrooms, doing laundry, cleaning windows, fixing broken things, etc - all of which require cleaning supplies, screws, nuts and bolts, etc - he pays his own real estate taxes, take his garbage out, chase down packages that need signatures because he's not home when they deliver, pick up his dry cleaning at the cleaner, rake leaves in the fall, etc - he pays more than i do because he not only has to pay for supplies and maintenance, then he has to do it himself, so his nights and weekends are disproportionally full of the taking care of his house and yard - at both a finanancial and physical cost - all to live in the woods where everyone is in bed by 8pm because they're exhausted from yardwork

Both of these options scare me - I am too thrifty for real estate. Maybe I can find myself a nice overpass somewhere???

 

[Gadfly22]

Of course "official" reasons for high HOA / property taxes must by law be given but we all know there is one and only one reason for them - Keeps out the riff raff!

[+ Reisr30]

Well that area in general along with the Columbus Circle area.

 

It depends on the building CPW has some of the most expensive and exclusive buildings in NYC (e.g. the Dakota, the Beresford, 15CPW).

 

I agree with @Eric Hassan, you pay for the building, services/amenities and location. I grew up in Manhattan on the UWS (e.g. doorman, valet parking, concierge, gym, etc.) and it was a wonderful place to live but yes very expensive; I was glad I didn’t have to worry about the costs but I can tell you my parents thought it was well worth it.

[Gadfly22]

Both of these options scare me - I am too thrifty for real estate. Maybe I can find myself a nice overpass somewhere???

 

That would cost you 100K in NJ! (Assuming its under the TP or GSP) Wait no probably more, several years back a bum offered to sell me his cardboard box for 100K and prices must have gone up since then! He was a good salesman too. He pointed out that the up front cost may seem high, but no electricity, gas, or property tax. (cuz the streets belong to the people!)

[spider]

Of course "official" reasons for high HOA / property taxes must by law be given but we all know there is one and only one reason for them - Keeps out the riff raff!

 

If you want to call running a balanced budget “keeping out the riff raff” go right ahead. The fact is that every penny is spent to maintain the building to keep up the value of the building to ensure downstream sales and to supply the amenities and service we were promised when we bought, with anything left going into the reserve. There is no “anti riff raff” line. Sorry.

[LookingAround]

If it is a Co-op, it could be the underlying mortgage. Co-op shareholders make payments on a building's mortgage and the size of the building's underlying mortgage affects the monthly maintenance fee. It could include taxes, which can be high in NYC. It could also include some high end amenities like a pet spa, heated floors, heated and air conditioned parking garage, or salt water swimming pool.

I looked at the original listing. It’s a COOP. This post explains why the $4k is so high. Unlike a condo the buikding’s mortgage is folded into this. In a coop you own shares in the building not your unit as would be the case in a condo. You’re also paying taxes for the building folded into that. The COOP explains it. This link explains it.

 

https://www.google.com/amp/s/www.brickunderground.com/buy/why-are-maintenance-fees-so-different-in-nyc-buildings?amp

[thickornotatall]

I guess if I wanted to live in NYC, the Bronx seems to have much better deals. And no HOA!

https://www.zillow.com/homedetails/27-Sigma-Pl-Bronx-NY-10471/29854580_zpid/

I always liked The Grand Concourse area of the Bronx...Massive apartment buildings with huge rooms. A wide boulevard lined with trees. I know it's run down now but I remember visiting relatives in the height of the 60's. Close to train stations to midtown....

 

https://untappedcities.com/2015/08/03/10-pre-war-apartment-house-gems-of-the-south-bronx-nyc/

[Guest]

...the way i look at it is comparing my experiencce with my brother - he lives in a huge house in the woods of new hamsphire for which he pays a mortage. he's got a huge yard - that he has to mow, fertilize, and water - and he has to purchase and maintain the equipment to do it - he's got a big patio in the back and a long driveway - both of which need to be cleared in the winter of snow and ice - he has to heat and cool the house (which he pays for, and which involves at least 3 vendors - the oil people, the electric company, and the people who maintain the system)...

 

Of course, I would expect your brother to pay a lot for maintaining a huge yard, driveway, etc.. He's one person living with a huge yard and a long driveway. My guess is that your yard and driveway are a fraction the size of your brother's, AND you're dividing the cost by 130 people. You SHOULD be paying many times less than he is per month on maintenance. My guess is you're not. Sorry, but the math just doesn't add up.

[mike carey]

Of course, I would expect your brother to pay a lot for maintaining a huge yard, driveway, etc.. He's one person living with a huge yard and a long driveway. My guess is that your yard and driveway are a fraction the size of your brother's, AND you're dividing the cost by 130 people. You SHOULD be paying many times less than he is per month on maintenance. My guess is you're not. Sorry, but the math just doesn't add up.

I read Eric's comments rather differently than you, perhaps I was missing the point. I took his point to be that there is sticker shock in being presented with a monthly HOA bill when people living in stand-alone houses have no such bill. While houses have no equivalent, if you add up all the necessary expenses in owning and maintaining a house it can come close to or even exceed HOA fees over time. I say over time because it may be possible to defer payment for housing maintenance. For example, you pay a monthly contribution in your HOA fee towards expenses like roof repairs or painting that may be years off, whereas if it's your house you don't need to find the money until the work is required.

[Guest]

I read Eric's comments rather differently than you, perhaps I was missing the point. I took his point to be that there is sticker shock in being presented with a monthly HOA bill when people living in stand-alone houses have no such bill. While houses have no equivalent, if you add up all the necessary expenses in owning and maintaining a house it can come close to or even exceed HOA fees over time. I say over time because it may be possible to defer payment for housing maintenance. For example, you pay a monthly contribution in your HOA fee towards expenses like roof repairs or painting that may be years off, whereas if it's your house you don't need to find the money until the work is required.

The point, to me, is whether or not those HOA fees are reasonable (and over 10X what I pay for in my HOA fees). The point is that living in a stand-alone house with a yard SHOULD have higher expenses than living in a huge building with 130 units. One roof for 130 units as opposed to one roof for one unit. Should one not examine the issue of whether the fees are reasonable and well-spent?

[spider]

The point, to me, is whether or not those HOA fees are reasonable (and over 10X what I pay for in my HOA fees). The point is that living in a stand-alone house with a yard SHOULD have higher expenses than living in a huge building with 130 units. One roof for 130 units as opposed to one roof for one unit. Should one not examine the issue of whether the fees are reasonable and well-spent?

 

Of course one should examine the issue of the fees being well- spent. Every owner receives a copy of the budget every year, with a line by line breakdown, there isn't much if any fat, and when I have the stomach to attend a board meeting (they tend to turn me to drink) options for everything that rises to any level of expense beyond minor is thoroughly discussed. Sometimes our manager points out that in some cases a slightly more expensive option means working with a known top quality contractor and the result will be much longer-lasting, other times he says "it doesn't really matter, take the low bid on this one." There is no waste and certainly no scamming. Everything is accounted for and we receive an end of the year line by line accounting of the actual expenses. But, stuff pops up, when the garage door breaks in the up position in the middle of the night you need an emergency repair and overnight security since the entire building is now open to the world - not a good thing in the big city. A few of those a year add up. I think I live in a well managed building.

 

My monthly HOA fees when I moved did add up to less than the expenses of living in the house. To get there I did need to add in the then much lower city property taxes, but adding it all up - garbage, water, utilities are much less - partially because basic cable and internet are in the HOA dues, no lawn care service, fewer miles driven every day, etc. I know some of those savings aren't directly related to the housing unit, but they are all part of my monthly outlay. Now, my taxes have risen steeply, so that probably changes the numbers a fair bit, but I'm settled for what I hope is life, I'm paying the bills and have money extra every month, and so no future that includes living under an expressway, so life it good and I don't think about it. The mortgage will be paid off in a couple years, and that's when life will REALLY be good. The best part is that except for things between my walls - the exact phrase is that I own everything from the inside of the drywall - everything is taken care of by the building and when I close my door to leave on a trip no one knows I'm gone.Those things are worth a lot of money for people who don't have the time or interest in puttering all the time.

Edited June 11, 2019 by spider

[+ Eric Hassan]

Of course, I would expect your brother to pay a lot for maintaining a huge yard, driveway, etc.. He's one person living with a huge yard and a long driveway. My guess is that your yard and driveway are a fraction the size of your brother's, AND you're dividing the cost by 130 people. You SHOULD be paying many times less than he is per month on maintenance. My guess is you're not. Sorry, but the math just doesn't add up.

 

i don't think you fiully grasp the reality of living here and i think you're more committed to being right than understanding. also, your math is way off.

[+ FrankR]

The point, to me, is whether or not those HOA fees are reasonable (and over 10X what I pay for in my HOA fees). The point is that living in a stand-alone house with a yard SHOULD have higher expenses than living in a huge building with 130 units. One roof for 130 units as opposed to one roof for one unit. Should one not examine the issue of whether the fees are reasonable and well-spent?

As folks are so fond of saying here in the North East Corridor: It is what it is. (Shrug)

[mike carey]

i don't think you fiully grasp the reality of living here and i think you're more committed to being right than understanding. also, your math is way off.

Ouch!

[marylander1940]

As folks are so fond of saying here in the North East Corridor: It is what it is. (Shrug)

 

And is up to us to decide to live here or not.

[Guest]

i don't think you fiully grasp the reality of living here and i think you're more committed to being right than understanding. also, your math is way off.

Well, it's not up to me to justify those fees. No one here, certainly not you, has provided any kind of even rough accounting to explain a $4000/month fee, which doesn't even include taxes or homeowners' insurance. To just say "your math is way off" without providing any real figures doesn't address the issue in the least. You're essentially just saying "You're wrong, you're wrong, because I say so. Nany-nany boo-boo." At least Spider has provided some insight into some unexpected expenses that one might encounter, such as the garage door breaking down, although of course that still doesn't come close to explaining those fees. Nor do I have any understanding why a co-op would still be paying mortgage on a building that's 80 years old. Aren't most mortgages for 30 years? To say that the fees are there to "keep out the riff-raff," as one poster suggested seems kind of silly. A unit price tag in the millions would seem to do that, and that just begs the question: if the fee is really just to deter non-rich people from buying in, where is that money going? To the directors of the co-op? To relatives of the directors, with lucrative contracts? I'd really love to know.

Again, I'm not thinking of moving to Manhattan. I don't see the appeal. I was just curious, and was simply astounded at what seemed like really absurd HOA fees.

[+ bashful]

smaller places (as measured by square feet) pay less because they own less of the building

 

Not the case in Illinois. Often, percentage of ownership is based on pre-construction prices. Since higher floors usually have higher prices, a 1,200 square foot floor plan on the 25th floor will have a higher HOA fee than the same 1,200 square foot floor plan on the 4th floor.

[cany10011]

Well, it's not up to me to justify those fees. No one here, certainly not you, has provided any kind of even rough accounting to explain a $4000/month fee, which doesn't even include taxes or homeowners' insurance. To just say "your math is way off" without providing any real figures doesn't address the issue in the least. You're essentially just saying "You're wrong, you're wrong, because I say so. Nany-nany boo-boo." At least Spider has provided some insight into some unexpected expenses that one might encounter, such as the garage door breaking down, although of course that still doesn't come close to explaining those fees. Nor do I have any understanding why a co-op would still be paying mortgage on a building that's 80 years old. Aren't most mortgages for 30 years? To say that the fees are there to "keep out the riff-raff," as one poster suggested seems kind of silly. A unit price tag in the millions would seem to do that, and that just begs the question: if the fee is really just to deter non-rich people from buying in, where is that money going? To the directors of the co-op? To relatives of the directors, with lucrative contracts? I'd really love to know.

Again, I'm not thinking of moving to Manhattan. I don't see the appeal. I was just curious, and was simply astounded at what seemed like really absurd HOA fees.

 

 

I‘m on the board in my building. The HOAs are derived from the annual budget, which is totally transparent and is available to anyone who is interested in reviewing line items. The only thing i can see “inflating‘ is the management costs from the property management company - but most of these are industry standards and nothing the board can really do except shop around.

 

Otherwise, everything is accounted for. You‘d be surprised how expensive things are. Repointing a landmark building will cost each unit an assessment of 200K to be paid over time. So, it is the cost of living in a desirable place. I don’t mind paying the HOAs - they are not used to “screen” out the undesirables. They are actual costs estimated from each year‘s budget. Each unit pays its a portion depending upon square footage (condominium) or percentage share (co-op).

Edited June 12, 2019 by cany10011

[+ Eric Hassan]

Well, it's not up to me to justify those fees. No one here, certainly not you, has provided any kind of even rough accounting to explain a $4000/month fee, which doesn't even include taxes or homeowners' insurance. To just say "your math is way off" without providing any real figures doesn't address the issue in the least. You're essentially just saying "You're wrong, you're wrong, because I say so. Nany-nany boo-boo." At least Spider has provided some insight into some unexpected expenses that one might encounter, such as the garage door breaking down, although of course that still doesn't come close to explaining those fees. Nor do I have any understanding why a co-op would still be paying mortgage on a building that's 80 years old. Aren't most mortgages for 30 years? To say that the fees are there to "keep out the riff-raff," as one poster suggested seems kind of silly. A unit price tag in the millions would seem to do that, and that just begs the question: if the fee is really just to deter non-rich people from buying in, where is that money going? To the directors of the co-op? To relatives of the directors, with lucrative contracts? I'd really love to know.

Again, I'm not thinking of moving to Manhattan. I don't see the appeal. I was just curious, and was simply astounded at what seemed like really absurd HOA fees.

 

first of all, i never said i pay 4000/month

 

second of all, if you read my posts completely, you would have seen that i gave clear examples of unexpected expenses, aliong with an extensive breakdown of what the money we pay covers and i stated at least once that it covers taxes, and it happens to cover the insurance for the building, but not the individual units

 

third of all, there is no way in hell i am going to give "real figures" in a public forum - i came as close as i will to that by stating we pay almost as much in fees as we do in mortgage -

 

fourth of all, i maintain that you don't live here, haven't actually read or understood my responses, and are convinved that you are right and that i - someone who actually lives here and has an understanding of what i'm paying and paying for - don't know what i'm talking about, but you go on and be the expert

 

fifth of all, all of this - to me, at least - boils down to what i choose for my life, and if you don't like it, or think it's stupid, or think i'm wrong, that's fine, but if you want to keep arguing about it, you're going to have to do it without me

[+ SundayZip]

I've been on the board of my condo association for over 8 years including several years a treasurer. I've also been active in a consortium of HOA board members and have had opportunity to learn how other associations operate. I have yet to encounter an association that is not 100% transparent with its budget and spending. There's a couple reason for this: 1) state law requires HOA's to be 100% transparent with budgets, spending for ongoing operational expenses and for reserve funds. 2) There are always a handful of owners who demand transparency and want to dig into the details.

 

There will always home owners who complain that their association is over-spending and needs to do a better job of cutting costs, but those tend be owners who don't bother to understand the annual budget and ignore monthly financial reports that are made available to all owners. Owners who say that an HOA's costs or dues "should" be lower, generally don't know what they're talking about (often making statements similar to those by @Unicorn).

 

I don't have statistics on this, only lots of anecdotal evidence, but a very common reason for an association to have higher than average dues is failure to keep up with ongoing repair & maintenance or failure to maintain an adequate reserve fund. Board members don't have enough backbone to overcome resistance from owners who don't want their dues to ever, ever increase. All of a sudden they have huge, high cost projects and no money to pay for them. They are then forced to dramatically increase dues. I've seen this play out in several different ways.

- Special assessments against all owners that are either collected as a lump sum or via periodic payments added to the monthly dues. This is what happened to a 28 story condo building that failed to bring it's elevators up to code until the city assessed large fines.

- Postpone projects and then massively increase annual contributions to reserves (ie, massive increase in dues) until it has enough money to pay for the projects.

- Take out a bank loan and then increase dues in order to repay the loan plus interest.

 

I'm not saying that I know the reason for the high dues at 1140 5th Av (first link that @Unicorn posted) but there are explanations that make sense. I read somewhere that average dues in NYC is $1.73 per square foot. The unit at 1140 5th Av is $2.46 per sq ft. On the other hand, the other link that @Unicorn posted (1255 5th Av) is $1.27 per sq ft. Show us their financial reports and we can all stop speculating.

[spider]

Condo fees vary for many reasons but a couple typical ones include;

 

Age of the building. The older the building the more things break and at a certain point major things need replacing. An old developer trick is to under set the HOA dies after they’ve cheaped out on construction. When a certain percentage of units are work an actual owners association takes over, the developer is gone, and the HOA realizes that the dues can’t cover ongoing expenses so they go up and the a double whammy can be at after a couple years major flaws begin to appear. I know one new building that had to replace all the balconies as they were falling off. You can sue the developer but often they’re no longer around, having closed shop and resumed business as a different entity.

 

Amenities. Door staff adds a lot, do you pools and elaborate exercise rooms and dog runs and common deck space with grills and who knows what. A movie room. A party space complete with kitchen. They all add up.

 

Level of maintenance. You can cheap out and pay for a minimal staff or have a multi-person maintenance staff cleaning and polishing all the time.

[LookingAround]

You guys keep talking about condo fees but this is a coop. Apples and oranges.

[+ Charlie]

Nor do I have any understanding why a co-op would still be paying mortgage on a building that's 80 years old. Aren't most mortgages for 30 years? .

The fact that a building is 80 years old doesn't mean that it was mortgaged only once, at construction. It is probable that ownership changed hands multiple times, and the building has had multiple mortgages. Many older co-ops in Manhattan were not originally co-op, but were built as rental apartment buildings that turned out not to be profitable when rent controls were instituted, so the owners turned them into co-ops so that the individual apartment owners would assume responsibility for the underlying mortgages through HOA fees. I lived through one such conversion of a building in which I had been a tenant.

[+ SundayZip]

You guys keep talking about condo fees but this is a coop. Apples and oranges.

 

Probably more like Oranges and Clementines. They are both a form of common-interest ownership of property (residential property in this discussion). The ownership of common elements and individual units is structured differently, but both are governed by a collection of owners and the owners deal with an (almost) identical set of budget and cost challenges.