Isn’t it about time for co-ops and Millennials to get together? First-time homebuyers in their twenties and thirties would seem to be a natural fit for co-ops – which tend to be cheaper than condos – if only co-op boards would loosen up on age-old restrictions. There are signs that this might actually be happening, Forbes reports.
Lisa Larson, an agent at Warburg Realty who serves on her co-op board, reports that her board is growing more lenient in an effort to attract younger buyers, many of whom are put off by co-op boards’ traditional demands. She reports that her board just chose to require only the first two pages of tax returns from potential buyers, without the tax schedules. The board also stopped requiring full bank and brokerage statements. Larson’s board now asks applicants to have a CPA sign the prospective buyer’s personal financial statements, attesting to their validity. As one board member commented: “It’s none of our business which stocks they invest in!”
“I’ve found that my Millennial buyers, facing the huge hoops they see as a barrier to co-op entry, are turning to condos as an alternative,” Larson says. “The co-op boards that have accepted this new reality and recognize that the value of their buildings depends upon adapting to it are slowly beginning to change decades-old rules. I’m finding that board members with Millennial-aged children are more open to changing. They are listening to their children, perhaps.”
Other areas where forward-thinking boards are changing include loosening restrictions on sublets, dogs, and baby stroller parking in the lobby. Some are even lowering the minimum down payments, a big challenge for many younger buyers.
“This generation of buyers doesn’t put as much value on buildings with lots of restrictions,” says Brian Lewis, a broker with Compass. “So many mindful co-ops are trying to act more like condos these days so they can attract higher prices from a wider audience. Restrictions are audience-limiting [because] the smaller the audience, the less money a building tends to attract. Buildings that act more condo-like attract a broader audience – and usually more money.”
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