Sep 15, 2014

Location Affordability by Household Type

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The Citizen’s Budget Commission (CBC) has issued a series of reports comparing New York City’s affordability to that of the 21 largest cities in the country using a concept of “location affordability” developed by the U.S. Department of Housing and Urban Development (HUD). 

Location affordability includes the cost of transportation as well as housing, usually the two largest items in a household’s budget.  According to HUD’s Location Affordability Index (LAI) that measures these two costs, a household paying more than 45 percent of their income for these costs is overburdened. 

The CBC found that the combination of New York City’s high rent and extremely low transportation costs brought it to the third most affordable city of the 22 measured.  The CBC then measured the location affordability of 7 different rental household types in New York City.  The 7 household types were categorized into two groups, moderate-and middle-income households, and low-income households.  

For household types in the moderate- and middle-income group, location costs ranged from 27 to 37 percent of income, which are all below the 45 percent affordability threshold.  This ranks New York in the top 6 most affordable cities for each moderate- and middle-income household type.  

For household types in the low-income group, location costs were much higher, with all three household types exceeding the affordability threshold.  Location costs ranged from 47 percent of income for a “Low-Income Family”, to 101 percent of income for a “Very Low-Income Single Worker”, or a single person earning a wage at the national poverty line. 

Despite these high percentages, New York City still ranks relatively high compared to the other 21 cities in affordability for low-income rental households, with all three household types ranking within the top 6 most affordable.





 source: Mike Slattery, Senior Vice President
 REBNY Research Department



Sep 14, 2014

498 West End Avenue | Rentals to Condos

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498 West End Avenue
498 West End Avenue

A century-old handsome limestone and brick rental building located between West 83rd and West 84th streets on West End Avenuue is converting from rental units to three to five-bedroom condominium residences designed by CetraRuddy.

West 84th Street | Edgar Allen Poe Ct
  
















Approximate asking prices will start around $3 million and go up to more than $10 million. Sales are expected to launch this month. The building is expected to be completed by spring of 2015.

Included in the conversion will be a 4,000-square-foot rooftop addition that the Landmarks Preservation Commission approved. Developer Samson Management acquired the 12-story rental property in 2012 for $52.5 million.

Manhattan New Developments and Conversions 


Sep 12, 2014

New Construction: UWS | 210 West 77th Street

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210 West 77th Street
 210 West 77th Street

An 18 story, 25 unit 1/2 floor and full floor condominium residences are being designed by Thomas Juul-Hansen for developer The Naftali Group.

Units range in price from $4.9 million to $12 million from 2,058 square feet, for 1/2 floor unit to a  4,919-square-foot 5BR/5.5BA "townhouse" duplex with a 1,280-square-foot terrace. 

There will also be a $10 million full-floor 4BR and a $7.05 million half-floor unit on the 10th floor. 

Building amenities will include a 24-hour doorman, roof terrace, fitness center, party room, and bike storage. The kitchen features Miele appliances, Everest Grey quartzite countertops and backsplashes, white lacquer cabinetry, 2 sinks, a separate wine cooler and a vented overhead fan. All units also have Whirlpool washer/dryers and 5" white oak floors.



Sep 11, 2014

"People Fleeing Lower Manhattan Faster than the Titanic"

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 "People fleeing lower Manhattan faster than the Titanic"

Headlines I remember during the fall of 2001. I will always remember that sunny September day 13 years ago, all the innocent lives lost and all the heroes who sacrificed their lives to save others.

Tribute in Lights | Remembering 9/11

I remember getting a call the night before from my friend Richard Hack informing me that his bestseller Hughes: The Private Diaries, Memos and Letters was being released on September 11, and he was being interviewed with Matt Lauer at 8:36 AM tommorow on the Today show. I should watch the interview and meet later for lunch. While he was being interviewed live on the Today show the first plane crashed into the World Trade Center.  I went up to my roof and saw the horrendous horror with my own eyes.

Today there will be videos all over the internet and broadcast and cable networks with images and videos of the former World Trade Center Towers exploding and collapsing. I will not post them here. The images and the smell in the air are still vivid in my memory as if it was yesterday. Instead this post is about New York's Comeback.

I also remember the spirit of the fellowship and unity that brought New York together in the wake of the September 11 attacks. The resilience of all New Yorkers who were determined to come back from this unthinkable event stronger than ever. And we did!

Since September 11, 2001, the number of people living in Lower Manhattan has nearly doubled. In fact, Lower Manhattan has added more people over the past ten years than Atlanta, Dallas and Philadelphia combined.
New World Trade Center | Lower Manhattan
In re- sponse to the attacks, New York City has been a national leader in implementing more stringent building safety requirements. These include wider emergency exit stairs to make evacuations quicker, the installation of photoluminescent strips to make building evacuations safer and the full sprinklerization of office buildings to better safeguard property and protect lives.

Today Lower Manhattan is full of new housing, restaurants, hotels, bars, parks, schools, open spaces and new businesses big and small.

We Remember - We Never Forget - We Rebuild-  We're Stronger - We're Better - We Live in an Age of Terror - We Help Each Other - We Look Out For Our Neighbors -  For or Fellow New Yorkers and Fellow Americans. - Prayers and Thoughts to Those Who Lost Their Lives and Loved Ones.

God Bless New York and God Bless America!

photos/911-museum

Sep 10, 2014

Manhattan Monthly Market Report | August 2014

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Sep 8, 2014

Affordable Housing More Complex than a "Poor Door"

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To understand "affordable housing" in Manhattan, you must understand our housing market.  Manhattan is a unique place in the real estate universe. Not only does it have a large rental market (approximately 75% of the available housing units vs. about 5 - 10% in other markets), but it has  housing ownership and other important differences that are unique often puzzling and peculiar.

Approximately 70% of the housing inventory available for ownership in Manhattan are in coop apartments that converted from rental buildings. Coops are private corporations governed by a board of directors that can pick and choose who can live in their building. The coop board has the right to reject any potential purchaser for any reason other than housing discrimination although they are not required to give a reason for rejecting a purchaser. The rest are condos, and townhouses. 

Most new construction developments are condos or rental buildings. It's important to understand our peculiar housing market to understand the complexity, history and politics of "affordable housing" in NYC.

 Low income rental section
Mayor De Blasio’s Housing Plan
Housing New York: A Five Borough, Ten Year Plan 
defines Affordable housing in NYC by the Area Median Income (AMI) as follows: 

Extremely Low Income (0-30% of AMI)
Very Low Income (31-50% of AMI)
Low Income (51-80% of AMI)
Moderate Income (81-120% of AMI)
Middle Income (121-165% of AMI)
    
The NYC Department of Housing Preservation & Development (HPD) is the City’s lead housing agency.
HPD does not market rent or sell apartments but HPD requires that subsidized apartments be rented through an Open Lottery System to ensure fair and equitable distribution of housing to eligible applicants.
 



With so few affordable apartments even qualified applicants still have to win a lottery. Some "affordable" buildings such as Penn South a limited-equity housing cooperative development located between Eighth and Ninth Avenues and West 23rd and 29th Streets, in Chelsea opens it's 14 to 15 year waiting list with a new lottery every ten years or so. You need to win the lottery to get on their 14 year waiting list. 
West 62nd Street entrance to rental building segment

The NY POST, who's owner billionaire Rupert Murdoch recently paid $57.25 million for a new Manhattan condo with  a separate private "ULTRA RICH elevator separated from "RICH" elevator never the less is the local NYC Madame Defarge selling papers by channeling populist rage with the headline and artist renderings of a luxury new building on Riverside Boulevard with captions: “RICH DOOR on Riverside Blvd.” and “POOR DOOR in back alley.”

The NY Post article has been picked up and mimicked all over the world. "The rich and poor residents of a building on Manhattan’s Upper West Side, in a high-end development called Riverside South, will have to use separate entrances to their homes."

The "affordable" rental section of the development will have an entrance on West 62nd Street.

It was interesting hearing the term used by local politicians since they know the game. They play the game. They make the rules. The city and state give out tax incentives to developers in exchange for building affordable housing units, parks even subways stations.  NY state is running a $multimillion ad campaign "NY State Open for Business" promoting tax incentives to businesses offered by the state.

NYC property taxes are complicated and difficult to figure out but owner's of condos and coops pay a much higher tax rate than owner's of houses. The co-op tax abatement was created in 1996 to help eliminate the significant disparity in taxation between co-op and condo apartments, which are generally assessed and taxed at 45 percent of market value, and single, two- and three-family homes (mostly in the outer boroughs) which are assessed at 6 percent a year.

While most coops and condo owner's have been receiving a 17.5% tax abatement since 1996 the law was changed last year.  The new law only allows the tax break only on a primary residence. Pied-à-terre, or units held solely in a trust or by a limited-liability company, no longer qualify.
The tax benefit (421A) bestows property tax breaks for up to 25 years on new multifamily buildings.  It was put in place in the 1970s to spur development. The idea was that developers received a tax abatement passed on to owners in new developments in exchange the developers gave back to the city by building a public space and/or affordable housing units.

To be eligible for 421-A in prime Manhattan neighborhoods, developers had to include affordable housing, at least 20%. The 80/20 model has been used by developers primarily on rental buildings for decades.  A developer could build a luxury building on Upper West Side and build affordable housing in the Bronx to get the tax abatement. Prior to 2007 421-A tax abatement's were given to practically all new construction. 

In 2007, Mayor Bloomberg cracked down on 421-A. The tax breaks were applied to more NYC neighborhoods, including upper Manhattan and the outer boroughs. Developers could no longer build affordable housing in outer boroughs but had to build in same community as the luxury building.  The inclusionary housing mandates that the affordable units be in a separate building, in the same community or they can be clustered in what the city calls a building “segment,” which then has to have a separate entrance. Hence "Poor Door" 


The Ashley Market Rental building



The Ashley 400 West 63rd Street
Regardless of income renters and owners are often separated by a different door, separate building or segment of a building when a development has both a rental component and condominium. Hotel condos have separate entrances for condo owners and hotel guests. 

In fact right next door north of 50 Riverside Boulevard is The Alden at 60 Riverside Boulevard built by the same developer Extell. Right behind the Alden is it's sister rental building, The Ashley with a separate entrance at 400 West 63rd Street "the so-called back alley" The market rate rental apartments in the Ashley primarily have north, south and east views. The Alden condominium with the entrance on Riverside Boulevard features many units with west facing direct Hudson river views.






In the 1940's 50's and 60's the government built affordable public housing called "Housing projects".  NYCHA was created in 1934. There are deteriorating housing projects all over the city. The Riverside south project is located between Riverside Boulevard and West End Avenue. An exciting new neighborhood that didn't exist 15 years ago.

One block east of West End Avenue is Amsterdam Avenue. Amsterdam Houses a NYCHA housing project has 13 buildings, some 6 and some 13-stories high on 9.49 -acres. The 1,080 apartment complex houses an estimated 2,382 persons. It was completed in1948 located across Amsterdam Avenue from Lincoln Center and is bordered by West 61st and West 64th Streets, from Amsterdam Avenue to West End Avenue in Manhattan.

13 building housing project | Amsterdam Houses

Amsterdam Houses

















Amsterdam Houses were built more than a decade before the vast urban renewal program in the 1960's that included the new Lincoln Center for the Performing Arts and the eight Lincoln Towers buildings on 20 acres in the west 60's between West End Avenue and Amsterdam.

A separate door for the low income subsidized rental section of a brand new luxury condo located in a prime location or the alternative a door to a NYC Housing Authority project. In my opinion inclusionary housing with mixed incomes in new developments from the private sector in a new neighborhood is the future of affordable housing and a better option for new generations of low income New Yorkers than public housing projects from a bygone era. 

Bottom line 55 brand new affordable units available for low income households previously not available. I applaud Mayor Bill De Blasio's ambitious plan Housing New York:  A Five Borough, Ten Year Plan, to build and preserve 200,000 housing units, including 50,000 new affordable housing units. I hope he accomplishes this goal.

I hope more affordable housing becomes available for Moderate Income (81-120% of AMI) and Middle Income (121-165% of AMI) A "Middle/Moderate Door" and more affordable housing programs for  home ownership. 

Photos courtesy of: ©Mitchell Hall

More reading about affordable housing home owner opportunities:

HDFC Coops | Affordable Home Ownership
HDFC Coops | Facts vs Myths
HDFC Coop Income Standards
NY Tax Abatement's for Going Green
421-A Tax Abatement
HDC Affordable Condos & Coops


Aug 28, 2014

NYC - Location Affordability

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Mike Slattery, Senior Vice President, REBNY Research Department published very interesting numbers in the REBNY Reaserch newsletter. The Citizen’s Budget Commission has issued a series of reports comparing New York City's affordability to that of the 21 largest cities in the country.  
They also compared the competitiveness of New York City using a concept of “location affordability” developed by the U. S, Department of Housing and Urban Development (HUD) which includes the cost of transportation as well as housing, usually the two largest items in a household’s budget.  According to HUD’s Location Affordability Index (LAI) that measures these two costs, a household paying more than 45 percent of their income for these costs is overburdened.

New York City has the sixth highest housing costs of the 21 major cities (See Figure 2 below).  However, New York City has the lowest annual transportation costs of the cities surveyed, primarily the result of the majority of commuters using public transportation (See figure 3 below). 


 



















As a result, based on HUD’s LAI New Yorkers devote 32 percent of their income to housing and transportation, well below the 45 percent level established by HUD to signify an affordability problem.  Of the 21 cities surveyed by the Citizens Budget Commission, New York City was the third most affordable location according to the HUD LAI (See Figure 6).
 

Aug 20, 2014

New Construction Update: UWS | 80th and Broadway

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2234 Broadway
Friedland Properties is planning to put up a 20-story mixed-use building at 2234 Broadway at West 80th Street on the Upper West Side where a 2 story commercial building now stands according to TRD.

The 2 story commercial building was formerly the location of Lionel Leisure City and Filenes Basement.

The landlord and developer has requested a demolition permit for 2228-2236 Broadway. TRD reported the tower planned for the site will include retail space and luxury apartments. The residential units will be either rentals or condominiums and most will have balconies.
requested a demolition permit for 2228-2236 Broadway; the tower planned for the site will include commercial space and luxury apartments. The retail portion will cover two floors above ground and two floors below. The residential units will be either rentals or condominiums and most will have balconies.  - See more at: http://therealdeal.com/blog/2013/11/06/friedland-slates-mixed-use-tower-for-80th-and-broadway/#sthash.HMl8KLcb.B2fnjYrx.dpuf

2228-2236 Broadway

Freidland properties also developed the nearby Larstrand at 227 West 77th Street, a 20 story, 181 luxury rental apartment building at Broadway at 77th.

Larstrand 227 W 77th St.


The Larstrand features a mix of studio, one, two and three bedroom
rental apartments.
Friedland, both a landlord and a developer, has requested a demolition permit for 2228-2236 Broadway; the tower planned for the site will include commercial space and luxury apartments. The retail portion will cover two floors above ground and two floors below. The residential units will be either rentals or condominiums and most will have balconies.  - See more at: http://therealdeal.com/blog/2013/11/06/friedland-slates-mixed-use-tower-for-80th-and-broadway/#sthash.HMl8KLcb.ZcsJVJ2B.dpuf
Friedland, both a landlord and a developer, has requested a demolition permit for 2228-2236 Broadway; the tower planned for the site will include commercial space and luxury apartments. The retail portion will cover two floors above ground and two floors below. The residential units will be either rentals or condominiums and most will have balconies.  - See more at: http://therealdeal.com/blog/2013/11/06/friedland-slates-mixed-use-tower-for-80th-and-broadway/#sthash.HMl8KLcb.ZcsJVJ2B.dpuf
The residential units will be either rentals or condominiums and most will have balconies.  - See more at: http://therealdeal.com/blog/2013/11/06/friedland-slates-mixed-use-tower-for-80th-and-broadway/#sthash.HMl8KLcb.ZcsJVJ2B.dpuf
Friedland Properties is planning to put up a 20-story mixed-use building at 2234 Broadway at West 80th Street, where a two-story commercial property now stands.
Friedland, both a landlord and a developer, has requested a demolition permit for 2228-2236 Broadway; the tower planned for the site will include commercial space and luxury apartments. The retail portion will cover two floors above ground and two floors below. The residential units will be either rentals or condominiums and most will have balconies.
- See more at: http://therealdeal.com/blog/2013/11/06/friedland-slates-mixed-use-tower-for-80th-and-broadway/#sthash.HMl8KLcb.dpuf
Friedland Properties is planning to put up a 20-story mixed-use building at 2234 Broadway at West 80th Street, where a two-story commercial property now stands.
Friedland, both a landlord and a developer, has requested a demolition permit for 2228-2236 Broadway; the tower planned for the site will include commercial space and luxury apartments. The retail portion will cover two floors above ground and two floors below. The residential units will be either rentals or condominiums and most will have balconies.
- See more at: http://therealdeal.com/blog/2013/11/06/friedland-slates-mixed-use-tower-for-80th-and-broadway/#sthash.HMl8KLcb.dpuf
Friedland Properties is planning to put up a 20-story mixed-use building at 2234 Broadway at West 80th Street, where a two-story commercial property now stands.
Friedland, both a landlord and a developer, has requested a demolition permit for 2228-2236 Broadway; the tower planned for the site will include commercial space and luxury apartments. The retail portion will cover two floors above ground and two floors below. The residential units will be either rentals or condominiums and most will have balconies.
- See more at: http://therealdeal.com/blog/2013/11/06/friedland-slates-mixed-use-tower-for-80th-and-broadway/#sthash.HMl8KLcb.dpuf
Friedland Properties is planning to put up a 20-story mixed-use building at 2234 Broadway at West 80th Street, where a two-story commercial property now stands.
Friedland, both a landlord and a developer, has requested a demolition permit for 2228-2236 Broadway; the tower planned for the site will include commercial space and luxury apartments. The retail portion will cover two floors above ground and two floors below. The residential units will be either rentals or condominiums and most will have balconies.
- See more at: http://therealdeal.com/blog/2013/11/06/friedland-slates-mixed-use-tower-for-80th-and-broadway/#sthash.HMl8KLcb.dpuf
Friedland Properties is planning to put up a 20-story mixed-use building at 2234 Broadway at West 80th Street, where a two-story commercial property now stands.
Friedland, both a landlord and a developer, has requested a demolition permit for 2228-2236 Broadway; the tower planned for the site will include commercial space and luxury apartments. The retail portion will cover two floors above ground and two floors below. The residential units will be either rentals or condominiums and most will have balconies.
- See more at: http://therealdeal.com/blog/2013/11/06/friedland-slates-mixed-use-tower-for-80th-and-broadway/#sthash.HMl8KLcb.dpuf
Friedland Properties is planning to put up a 20-story mixed-use building at 2234 Broadway at West 80th Street, where a two-story commercial property now stands.
Friedland, both a landlord and a developer, has requested a demolition permit for 2228-2236 Broadway; the tower planned for the site will include commercial space and luxury apartments. The retail portion will cover two floors above ground and two floors below. The residential units will be either rentals or condominiums and most will have balconies.
- See more at: http://therealdeal.com/blog/2013/11/06/friedland-slates-mixed-use-tower-for-80th-and-broadway/#sthash.HMl8KLcb.dpuf

Aug 15, 2014

NYC Residential Building Permit Comparison

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REBNY Research department (Real Estate Board of New York) compared the peak year for housing production (new units of housing permitted) before the recession (generally 2005-2008) in New York, San Francisco, Boston, Seattle, and Washington D.C. with their housing production in 2013. 
 
New York City has by far the largest population and the most housing units of any of these major U.S. cities.

Of these five cities, New York is the only city whose production has not reached its pre-recession peak.  However, building permit levels are on the rise in NYC for 2014, up almost 2,500 units from the same time last year.  

If NYC experiences the same level of increase in building permits in the second half of 2014 as it did in 2013, its annual total will compare positively with the average annual new housing unit permits we achieved in the last decade.  The last decade was the highest annual average in thirty years.  







Aug 6, 2014

Developers Build Affordable Housing

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Aug 2, 2014

Rental Season | Renting an Apartment in Manhattan

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Renting an Apartment in Manhattan, NYC
originally posted: Monday, September 12, 2011

Everyone wants their first New York City rental experience to be a positive one. As a current or future Manhattanite, you should familiarize yourself with the rules of renting in order to make your experience as hassle and worry free as possible. 

Carefully read any documentation presented to you by your future landlord before entering into any contract. Although many leases contain predominantly boilerplate language, in many instances clauses may be added to the lease contract that supersede or alter the lease agreement in some way. Such additions are called riders.

Also, the type of lease may vary. A Standard Form of Lease, for instance, may differ greatly from a Rent Stabilized Lease Agreement or a Cooperative Sublease Agreement. Take the time to read and digest the language of any documentation presented to you, and always ask questions should it contain something you don't fully understand.

Make a check list of information to bring with you in order to finalize your lease agreement. You will almost certainly need all of the following:
1.     A letter of employment and salary verification
2.     Bank account numbers (checking and savings), as well as any credit card numbers
3.     Current bank statements
4.     Contact information (names, addresses, phone numbers) of previous landlords
5.     Contact information of your personal accountant or attorney, if applicable
6.     Contact information of any personal or professional references
7.     Tax returns from the last two years
8.     Recent (current) pay stubs, typically from the last two pay periods
9.     Two forms of personal identification (driver’s license, passport, etc)
10.    40-50x the monthly rent in annual income is required.

170 Amsterdam Avenue
If you are relocating from outside of New York, prepare your funds ahead of time. Landlords will not accept personal out-of-state checks. Bring traveler’s checks or certified bank checks in amounts sufficient to cover two months rent, any brokerage fees, a credit check fee, and any additional fees such as a move-in/move-out fee or building application fee.

Once your personal and financial documentation is in order, you will then be prepared to view and select prospective apartments. Remember, your agent can provide you with a wealth of information to assist you in making an informed decision. Ask plenty of questions about neighborhoods, building types, public transportation access, or anything else that might be of interest to you.

When you have selected a suitable apartment, you must then fill out a rental application, or other applicable documents. Once you or your agent has negotiated agreeable lease terms, a credit report and reference check will be done.

Upon final confirmation, you will be asked to sign a lease and settle any outstanding applicable fees.

In Manhattan, residential real estate is made up of rental buildings, condos, condops, coops and townhouses. All can make fine homes and all are available for rent.

Please contact me to rent your Manhattan Apartment.

Jul 25, 2014

New Construction Update | Upper West Side

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219-223 West 77th Street
 New Construction Update | Upper West Side

Plans to demolish a five-story parking garage on the Upper West Side were filed with the Department of Buildings. The Naftali Group, a developer is expected to build residential condominiums on the site according to The Real Deal.

The developer is in contract for the site at 219-223 West 77th Street for $61 million, or about $792 per square foot. The garage also includes Alamo and National car rental services.

The 7,700-square-foot lot, between Amsterdam Avenue and Broadway, features 75,000 square feet of build-able space. The deal is expected to close by September. No brokers represented Naftali.

The Naftali Group is working on several condominium projects in Manhattan, including the nearby 25-unit property at 206 West 77th Street.

Jul 20, 2014

Q & A | What are Lot Line Windows?

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732 West End Avenue
Adjacent 736 West End Avenue lot line windows sealed off
Q: What are lot line windows? 
732 West End Avenue
Adjacent 736 West End Avenue lot line windows
A:  "A lot line window” is a window that is built on a side of a building that shares a boundary line with a neighboring property.  If the adjacent building is built up to or higher than this window, then the lot line window will likely need to be sealed off.  For this reason, lot line windows are not counted towards light and ventilation requirements. 

In condominiums and cooperatives, the offering plan will generally indicate whether there are any lot line windows in the building, and if so, which apartments may be adversely affected by the lot line windows.

Review Offering Plan, "Special Risks" section to determine if Lot Line windows are present.

If a building has lot line windows, it can be very difficult to determine the probability of whether the lot line windows will actually be sealed off.  Signs indicating that an adjacent property may be developed (i.e. vacant, adjoining lots or a rental building) could increase the probability that a lot line window may be sealed off.  An architect or attorney who specializes in zoning and land use should be consulted.

Jul 17, 2014

HDC Affordable Condos and Coops.

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Q: What is an HDC condo, coop, condop or rental building.

A. New York City Housing Development Corporation (HDC) provides financing for affordable housing.  

Strivers Gardens Condominium
HDC provides financing for large-scale developments, issues bonds and provides subsidy and low-cost loans to develop and preserve a variety of housing, ranging from large to small rental and condo, condop and coop home ownership. 

HDC-financed apartments are sold to low and middle-income households. They may have different income tiers within the building. Some apartments may have higher maximum income restriction than others. Often some of the original owners purchased their units through a city lottery.

HDC finances the construction of residential buildings. A portion of the unit is subsidized. In some HDC financed buildings if an owner sells a unit prior to the HDC mortgage expiration date a percentage of the unit's profits are paid to HDC. 

HDC approves the buyer's eligibility based on their current gross income. Income is calculated using annual gross (pre-tax) income, and also includes interest income earned from assets. 

Currently I have a  top floor 1 bedroom coop at  255 West 148th St. Apt 6C, The Washington a post-modern (built in 2004) six story 15 unit elevator coop through HDC. Maximum income allowed 255% of area median income (AMI) $214,750 =$214,750. There is no flip tax.

255 West 148th Street Apt 6C
I also recently listed a 2 bedroom 2 bath at Strivers Gardens Condominium at  300 West 135th Street A full service condo building with a garden atrium, state of the art gym, Zen Garden, resident lounge and On-Site Garage with valet parking. 75% of units at Strivers Gardens have an income max at 175% of Area median Income $150,325 (AMI) and 25% at 250% AMI - $214,750.

300 West 135th Street Strivers Gardens Condominium
HDC uses the proceeds from the sale of tax-exempt bonds to make first position mortgages and also uses its corporate reserves to make 1% second mortgage loans. HDC projects are aligned with the city's plaNYC green building policy. 

Jul 8, 2014

Income & Assets

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I'm often asked what a coop or an HDFC coop will consider or count as income and assets.
While assets are important most coops are only interested in liquid assets. 

Below is a list of types of income and assets. This is a typical example of income and assets.
Some forms of income such as child support may or may not count as income in certain coops.


 

TYPES OF INCOME AND ASSETS
TYPES OF INCOME

Salary
Self-employment earnings
Unemployment, Disability,
Worker’s Compensation
Social Security
Pension
SSI Interest
Welfare Assistance
Armed Forces Reserves
Alimony
Child Support
Dividends
Interest Income
Income from Rental Property
Scholarships and/or grants

TYPES OF ASSETS
Savings Account
Checking Account
Cash Value of Revocable Trusts
Equity in real property or
other capital investments
Stocks, Bonds, Treasury Bills, Certificates of
Deposit, Money Market Funds
Retirement Plans
Surrender value of life insurance policies
Inheritances, lottery winnings, capital gains,
Insurance settlements


 

Jul 1, 2014

Manhattan Market Report | Second Quarter 2014

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 Manhattan Market Report | Second Quarter 2014
·     
      Overall, the market-wide cost for Manhattan’s homes increased 20% in average sale price, 6% in median sale price, and 15% in average price per square foot versus Second Quarter 2013. The average price per square foot reached $1,286 this quarter, a new peak. 



Highlights of Manhattan Second Quarter 2014 Market Report:

·         Inventory Starting to Turn Around.  Although the number of properties listed for sale remains low (52% below the peak in Q1 2009), inventory rose for the second quarter in a row.

·         Limited Supply Buoys Prices.  inventory was up, but its overall continued depressed level maintained competitive conditions among those in the market to purchase.

·         Slower Activity in Bread-and-Butter Sales.  In Manhattan, one- and two-bedroom units are the primary drivers of residential sales activity, but they are occurring with decreasing frequency.  (see Sales by Price Category, p. 6.)  

·         Luxury Sales Grow Disproportionate.  Activity at the high end continued to be robust, and grew as an overall percentage of the market.  Properties above $3M now account for 12% of sales (up 3% from a year ago), and 26% of available inventory (up 4%).

·         Price Per Square Foot Sets New Record.  The focus on high-end sales drove the average price per square foot for Manhattan real estate up to $1,286.


The Second Quarter described signs of buyer fatigue and caution, particularly amongst prospective buyers of small units.  With prices at their peak, there is less incentive to become a first-time buyer, or to trade up from a starter home. 

Sellers act now and price it right. 

Each market segment and neighborhood has it's own nuances. If you're thinking about buying or selling a home, or would like to discuss the market or this report please contact me.
 

For the complete Corcoran Manhattan Second Quarter Report including neighborhood reports.














Jun 29, 2014

HDFC Coops Affordable Apartments No "But No Catch"

2 comments
Contrary to a recent article in the NY Times, most H.D.F.C. coops still provide affordable home ownership for low to moderate income households. Currently there is pent-up demand from qualified buyers for affordable apartments. Large affordable apartments are in extreme demand and sell quickly when priced right.

In my opinion the article in the Times is an urban myth perpetuated by it's reporter based on anecdotal evidence that may cause some consumers to make wrong real estate decisions.

I've been writing and publishing this blog about Manhattan real estate since 2006 as a transparent consumer service to help Manhattan buyers and sellers make informed real estate decisions. Having represented numerous sellers and buyers of H.D.F.C. coops in successful transactions, I would be remiss if I did not write this post.

I was surprised that HPD (New York City Housing Preservation Department), the city agency that administers H.D.F.C. coops was not included, quoted or represented in the article particularly since the new Mayor Bill de Blasio has made the goal of affordable housing a top priority of his administration.  

In my opinion, there is no "catch" or "bargains with a but" as the headline alludes and the article insinuates. Most of the HDFC listings the article included are anomalies.

The only 'But" and "catch" is when an H.D.F.C. unit is not priced right, not below market and not affordable for the intended low to moderate income buyer that can qualify for and needs a coop loan.

They are not "bargains" for low and moderate income home buyers that meet the maximum income allowed that will need to make monthly mortgage and maintenance payments but they are affordable. 

They are only bargains for fortunate cash buyers mentioned in the article that can also afford to purchase market priced apartments.

Like most coops, many H.D.F.C. coop boards use debt to income ratio to determine affordability. Typically, no more than approximately 30% of gross income should go toward housing expenses to be considered affordable. Most lenders will allow a significantly higher percentage than most coops.

NYC landlords use an income formula when renting an apartment: Income must be 40x rent. For example to qualify for a $3500/month rental apartment the tenant must have an income of $140,000.

30% of a household of 4 with a $140,000 income (165% of area median income) can qualify for a coop loan, with principle and interest payments plus monthly maintenance totaling $3500/month.

Do the math. If it doesn't work something is not Kosher.

With a 20% down conventional loan, a household of 4 earning the maximum $141,000 at a 4.5% interest rate $3500/month can afford a maximum price of approx $600,000 +/- with maintenance around $1000 +/- Households of 5 -8 people with a higher maximum income allowed can afford more. A 1 person household can afford less.

There is a correlation between household size, household income, apartment size, apartment price and affordability.

My advice to buyers looking to purchase an H.D.F.C coop: If you can find the same size non HDFC apartment in the same neighborhood in a similar building comparably priced then the HDFC is certainly NO BARGAIN. The HDFC coop should sell below market. Hence 'affordable'.

If a lender won't finance in the building or the coop won't disclose their financials that is a red flag. Why? The three largest banks in America (Citibank, JP Morgan Chase and Bank of America) are all eager to loan in H.D.F.C coops as long as the coop cooperates with lender and can meet FHA (Federal Housing Authority) guidelines. My preferred H.D.F.C. coop lender is Michael Most at Citibank

Comps (Comparative Market Analysis): Always compare apples to apples. Never compare apples to oranges when purchasing an HDFC coop or for that matter any apartment in Manhattan.

Apt 2E 3BR 2 Bath The Monerey Morningside Heights
There is no restricting an HDFC seller from trying to sell for what ever they want, other than possibly a resale cap in the coop's bylaws. Responsible HDFC coops want to remain affordable. During the board application process and interview the board can use their discretion to ascertain the purchaser's total financial picture and decide if the purchaser "fits in" just like any other coop.

My advice to HDFC sellers: Congratulations prices have risen in HDFC coops over the years. Priced right and marketed properly, listed with an experienced HDFC coop broker it will sell quickly to a qualified buyer providing the HDFC is well managed with good financials.

Like most real estate, the longer you've lived there, the more equity you will have accumulated. Since most HDFC coops are a form of limited equity home ownership a portion of your profits are shared with the coop in the flip-tax. Pricing an HDFC coop is as much of an art as a science, a skill that only comes with experience, knowledge and insight.

The flip tax in HDFC coops, unlike regular coops that converted in the 1980's wasn't to deter anyone looking to make a quick profit as the article states. You couldn't make a quick profit 30 years ago with an HDFC coop. You couldn't give them away. NYC HPD through an affordable housing program helped to rehabilitate the buildings, trained the tenants on home ownership and set the Coop up financially to be self-sustaining.

In my opinion, the reporter totally missed the point. NYC subsidized these apartments by selling them significantly below market prices, keeping the maintenance low with reduced property taxes. Instead she referred to them as "a small and quirky breed of co-op."

I've represented sellers and buyers in The Monterey, a Morningside Heights architecturally significant and sought-after HDFC coop, 45 Central Park North, Harlem's most distinguished and sought after HDFC coop on Central Park as well as HDFC's in Hamilton Heights, Sugar Hill, Manhattan Valley, Hell's Kitchen and the East Village

I've sold HDFC coops at record breaking prices while still maintaining the intent and spirit of affordable home ownership in NYC.
Central Park view from apt 3F 6.5 rooms at 45 Central Park North
I currently have qualified buyers with pent-up demand waiting for my next exclusive HDFC coop listing.

Full Disclosure: The Times reporter interviewed me for the article. It's the second time she interviewed me for an article and didn't quote me. The last time was about buyer's that ride their bikes to work. I can only assume that since my experiences with affordable HDFC coop's have been positive and rewarding for my sellers, buyers, coop boards and lenders, my quotes were not needed since the article's angle was about a a "But and a Catch"


More reading about HDFC Coops:

HDFC Coops | Affordable Home Ownership

HDFC Coops | Facts vs Myths
HDFC Coop Income Standards 
HDC Affordable Condos & Coops
The Flip Tax
Restrictive Covenants 

List your HDFC coop

Disclaimer: The opinions expressed here are those of the author and do not necessarily reflect the opinions or policy of The Corcoran Group.
Disclaimer: I am not a lawyer or accountant. This blog and my answers to questions are my opinions for information purposes only based on my experience as a NY licensed real estate associate broker and not intended as legal or financial advice and should not be used as a substitute for advice of legal counsel.


 
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