Page 1 - CooperatorNews July 2021
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July 2021 
                             COOPERATORNEWS.COM 
and protesting them every year, for example? Another costly area is  
energy repairs, supply and maintenance, and service contracts. Th  ese  
should be evaluated every two to three years. Are rates competitive?  
Th  e same should be done with professional services like auditors, at- 
torneys, engineers, and architects.  Th  ere’s also the minutia—things like  
cleaning supplies. What’s cheaper? Mr. Clean versus Fabuloso, for in- 
stance. But boards should remember, you generally get what you pay  
for—especially with professional services—so don’t try to save a few  
NEW YORK 
THE CO-OP & CONDO RESOURCE 
COOPERATORNEWS 
205 Lexington Avenue, NY, NY 10016 • CHANGE SERVICE REQUESTED 
Like so many other communities through- 
out the United States, New York City remains  
segregated in many respects—racially, eco- 
nomically, and socially—but even so, the city  
has achieved a level of housing integration  
despite the systemic forces at work against  
it. In many neighborhoods, public housing  
stands next to luxury co-op and condo build- 
ings; neighbors share streets, parks, shopping  
districts, and to some extent even schools. 
Th  is integration has been fostered by  
public policy over many years, and ranges in  
scope from the micro (such as ‘80/20’ rental  
buildings  in  which  80  percent  of  units  are  
rented at prevailing market rates, with the  
remaining 20 percent reserved for lower-in- 
come residents) to mid-sized developments  
(such as income-restricted and limited-eq- 
uity co-ops and rentals built under the city’s  
Mitchell-Lama program), to massive, macro- 
level projects like Co-op City and Starrett  
City, planned and built from the ground up  
to create whole new communities meant to  
encourage people of varying backgrounds  
and means to live together. 
So what are the benefi ts of mixed-income  
housing? And what challenges arise in com- 
munities of diverse means in a city known for  
sky-high living costs and warp-speed gentri- 
fi cation? And what can we learn from it all  
as we move forward in post-pandemic New  
York? 
A Little Look at the Past 
Amid the strong social and political forces  
unleashed aft er the end of World War II and  
continuing through the civil rights move- 
ment, as well as changes in the urban fabric of  
America during the 1960s, a number of pro- 
grams were initiated to bring more diversity  
to the economic face of housing and neigh- 
borhoods in New York.  Two of the most no- 
table initiatives launched to achieve this goal  
were the Mitchell-Lama program and the es- 
Th  e vast majority of co-op and condominium boards are well intentioned and work dili- 
gently with their management and accountants to draft  and monitor their annual budgets— 
and recalibrate them as necessary. Despite their best eff orts to keep costs under control, how- 
ever, many communities fi nd that expenses oft en exceed their projections. Even in the absence  
of an unforeseen crisis or major repair project, it oft en seems like money is just leaking out of  
the system. Th  e question is, where does it go—and how can we plug up the leaks when we fi nd  
them? 
Financial Leakage Defi ned 
Avi Zanjirian is a partner at the accounting fi rm of Czarnowski & Beer and works with cli- 
ents in New Jersey and New York. According to him, fi nancial leakage is more oft en a result of  
inattention than of outright negligence or fraud. To fi nd these blind spots, “we look at it from  
an auditor’s perspective,” he says. “You might be paying electric, water usage, and repairs, and  
all are within budget. But at the same time, you may not be looking at all the line items regularly  
to make sure they’re working effi  ciently.” Zanjirian recommends taking a hard look at every  
line item in your budget on a year-to-year basis, and assessing whether you’re getting the most  
for your money (or even just getting what you’re paying for) from your community’s vendors  
and service providers. “Do you have the best vendors, contract terms, etc.?” Zanjirian says. “As  
contracts expire, you should be checking this.”   
Another factor Zanjirian points out is the popularity of using autopay systems to send out  
payment for recurring bills. While the convenience of a ‘set it and forget it’ payment option is  
undeniable, it can oft en mean that less close attention is paid to cash outfl ow every month. Th  is  
is why it’s important to periodically take a close look at your community’s accounts payable,  
as well as to conduct an end of year review to determine whether costs went up, and if they  
did, why? “It could be because no one negotiated a new contract or a misplaced charge,” says  
Zanjirian.  “In terms of metered services like electric and water, are meter readings estimates or  
actual? Too much stuff  is on autopilot.”  
He goes on to list other areas that should be scrutinized: “Are we looking at real estate taxes  
One  year-plus into the  largest public  
health crisis in a century,  
CooperatorNews  
spoke to real estate professionals across  
the geographic regions we cover to learn  
the eff ects that the COVID-19 pandemic  
has had on their specifi c areas. What we  
found out is that the co-op, condo, and  
HOA market has taken several twists and  
turns over the past year—and a lot of that  
movement depends on where you live. In  
fact, even within the same region, the pan- 
demic has had varying impacts in luxury  
sectors versus middle-market, as well as in  
urban centers versus more outlying areas.  
A number of tangential factors are playing  
into trends and forecasts as well, making  
for a patchwork of experience across the  
country. 
The Bounces 
Perhaps unsurprisingly, the biggest dips  
in property value and activity were seen  
in the second and third quarters of 2020,  
when the nation was experiencing its sec- 
ond wave of infections and states were in  
various levels of lockdown to contain the  
outbreaks. Realtors across the country  
were unable to show properties in person  
for months in many cases, and transac- 
tions were further hampered by limits on  
travel, gatherings, and long backlogs in the  
courts. In many U.S. cities, the civil unrest  
following the murder of George Floyd by  
Minneapolis police offi  cers last year also  
had a compounded impact on real estate  
in those markets—some of which is still  
felt today. Condos and co-ops struggled as  
dense urban living and shared spaces lost  
some of their appeal when less was known  
about COVID-19 contagion and vaccines  
were still a pipe dream.   
But all that is changing. According to  
Garrett Derderian, Director of Market In- 
telligence for property fi rm SERHANT.,  
the  bounce-back  is  apparent  in  Manhat- 
tan, where during Q3 2020, sales averaged  
10.65% below listing prices. Th  e average  
discount for condos was 11.78%, for co-ops  
9.55%, and for townhomes 18.94%. Since  
then, discounts have gotten signifi cantly  
more shallow. “Currently, we see discounts  
hovering around 8%,” says Derderian, “in- 
dicating the market is beginning to tighten  
Where Does It Go? 
Th  e Problem of Financial Leakage 
BY A. J. SIDRANSKY 
How Has COVID  
Aff ected the Multifamily  
Housing Market? 
The Answer: It Depends. 
BY DARCEY GERSTEIN 
Mixed Income  
Communities 
Fairness, Equity, &  
Neighborliness  
BY A. J. SIDRANSKY 
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