By Anessa V. Cohen
Last June, I wrote an article regarding co-op buildings in our area. For those of you who have not read that particular article, I will briefly sum up what was discussed.
Buyers looking to purchase a co-op apartment in the Five Towns area must also deal with the realities of the features that the co-op buildings in this community have. Most are old buildings, built in the middle of the last century, comprising two floors each–all located in garden developments.
This might sound lovely when contemplating flowers and greenery on the outside, and most of these buildings with their gardens most certainly are lovely, but when a buyer realizes that certain features are missing from these complexes, uncomfortable compromises must be made if that buyer wants to proceed with a co-op purchase.
These garden-apartment complexes do not have elevators. People living on the second floors must consider carriages, walkers, wheelchairs, or simply carrying large items and even children up and down those stairs on a regular basis.
In addition, the garages in the basement–which include car garages and storage units–usually can be accessed only from the outside, via steep stairs, rather than by ramps or elevators. Forget about handicap access–it does not exist.
While some of these buildings have made accommodations for those wanting to install washers/dryers in their apartments, the majority do not allow it. Access to the laundry rooms must be had by going outside and up and down those steep stairs.
In my previous article, I spoke of small buildings in Israel that previously had no elevators but were now utilizing the new technology of smaller, more versatile, elevators. These had been very costly in the past, but had now become cheaper and could be installed today.
I suggested that the co-op boards of these garden complexes consider looking into upgrading their buildings. That would make them more valuable as well as more salable–especially the second-floor units which have become so difficult to sell, remaining on the market for long periods of time.
Soon after writing that article, I received a letter from a gentleman who owns one of these co-ops, advising me of the costs that the co-op buildings have in the course of the year to replace and repair plumbing, pointing of bricks, dry wells, furnaces, electrical wiring, roofs, and concrete surfaces–to name but a few categories which necessitate constant maintenance–thousands of dollars each year divided among the shareholders.
Although the letter was too long for me to reprint in total, I will reprint the couple of paragraphs regarding the upgrades I mentioned above:
“Your comparison of keeping homes up to date to keeping co-op apartment buildings up to date is just silly. Projects that cost a couple of thousand dollars at a single-family home cost many hundreds of thousands of dollars in a commercial building. Contractors jack up their prices exponentially when they quote prices for work at a commercial building.
“As an example, we recently asked our building engineering firm to estimate the cost of upgrading our plumbing, electrical wiring, and gas piping so that we could allow washers and dryers in our units. The cost they came back with was $5,000 to $7,000 per apartment pair. That is just the cost of bringing the infrastructure to the apartments. It doesn’t include any work inside the apartments. The cost to our complex would be between $200,000 and $300,000. The cost for one handicapped ramp is about $200,000. One elevator is about $200,000; we would need 12 of them, plus $200,000 times 12 to modify our buildings to accept elevators.
“We certainly could upgrade our buildings as you suggest. Of course, we would have to add a large assessment on top of our carrying charges. I know how much real-estate brokers love assessments.
“Most of our shareholders are not interested in selling their apartments. They just want to live and enjoy their homes. They just want to be able to pay their bills. The enhancements that you suggest would really be nice, but they are totally unaffordable.”
I thought long and hard about how to reply to this letter and how to counter these numbers that he had given me without spending many hours getting different estimates. While I had previously done some research on the pricing of elevators, and saw many new types of elevators that are considerably cheaper than the $200,000 per elevator that this gentleman had claimed, I know that $200,000 is the old pricing range of what an elaborate elevator for a multistoried apartment building would cost. Rather than arguing with the numbers given, I decided to answer this letter in a different manner.
My answer is as follows: Whether or not this project is one of great expense, it is one that is imperative for the future of all these complexes and needs to be addressed. It cannot be mothballed with “they just want to live and be able to pay their bills,” since any of them, at any time, might be the one trying to sell their apartment and then bemoaning the difficulty caused by nothing having been done.
So, that being said, . . . let’s say you have 8 apartments to each building. At $200,000 an elevator (with the proper configuration, I’m sure the elevators can be installed, with any modifications, for this amount), that works out to $25,000 per owner. The cost for a handicapped ramp to the basement serving an entire 12-building complex would be divided by 96 owners, so $2,100 per owner. Now, I add the $25,000 + $2,100 + $2,500 (washer/dryer upgrades per apartment) for a total assessment of about $30,000 per owner to upgrade the complex to modern amenities in the simplest form. This would translate approximately to $167 (plus interest) per month per owner over 15 years. If the complex took out a longer amortizing mortgage, it could even translate to less.
I think, given those figures, many of the owners might opt for these upgrades to better the quality of their life in their apartments, as well as to immediately raise the values of their apartments on the real estate market.
Surely those who are trying to sell their apartments only to hear potential buyers holding off on a purchase because of the difficulty of carrying things up and down stairs, having to lug their wash to the basement, or having to worry about steep steps to the basement when carrying things to and from the garage should be enough for these upgrades to be considered in a more serious vein. Otherwise, would-be co-op buyers will opt to rent rather than buy, since they gain little in amenities by investing in old infrastructure. v
Anessa Cohen lives in Cedarhurst and is a licensed real-estate broker and a licensed N.Y.S. mortgage originator with over 20 years of experience, offering full-service residential, commercial, and management real-estate services (Anessa V Cohen Realty) and mortgaging services (First Meridian Mortgage) in the Five Towns and throughout the tri-state area. She can be reached at 516-569-5007 or via her website, www.AVCrealty.com. Readers are encouraged to send questions or comments to anessa.cohen@AVCrealty.com.