With condos dominating the market and commanding higher prices, some co-op boards have turned to new and in some cases offbeat measures to boost their coffers and lower their monthly maintenance costs. From investing in commercial property to renting out rooftop space, the buildings are changing their ways to contend with the economic challenges. And with Local Law 97 fines looming if they fail to reduce their buildings' carbon emissions under prescribed caps, many co-op boards are shedding old ways of running their buildings and embracing progressive approaches.
“We often see, you know, Google programmers on the board,” Tina Larsson, the co-founder of the Folson Group, a co-op and condo consultancy, tells The Real Deal. “They’re not interested in doing things the way it’s always been done.”
Frederick Peters, president of the real estate brokerage Coldwell Banker Warburg, tells The New York Times, “It used to be just lawyers and accountants. Now they want architects, landlords, engineers — people who know how to get repairs done, and know who will do the best job the cheapest.”
Many of those co-op boards have adapted to today's financial pressures by easing rules on subletting, down payments and pets while looking to pad their accounts through mortgage refinancing, lines of credit and alternative revenue streams. Basements have been turned into for-purchase storage units. Rooftops, in some neighborhoods, welcomed billboards to collect advertising dollars. Telecommunications and media companies like Verizon and Spectrum signed decades-long leases to install transmitters on unused roof space. Some co-ops are collecting rent for rooftop solar panels installed and owned by energy-efficiency companies. The clean electricity generated by the solar panels is injected into the formula used to compute the building's carbon emissions — and can help reduce or eliminate fines under Local Law 97.
Spurred by rising property taxes, a soft real estate market, proliferating local laws, high interest rates and stubborn inflation, today's co-op boards are learning that old ways of doing business are no longer enough. The times demand creativity and decisive action. Of today's co-op boards, Larsson of the Folson Group says, "They want progress."
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