Home Buying in 10128>Question Details

jdh1810, Home Buyer in Huntington Beach, CA

How did co ops come to be? Being from California, such a concept seems like one from Mars. Are most co operate boards run by a bunch of Old people?

Asked by jdh1810, Huntington Beach, CA Sun Nov 10, 2013

The idea of paying 1000000 plus, only to have someone telling you what you can and can't do seems impossible to me. What percent are real estate taxes in condos not co ops Manhattan? In California they are around 1.25% of total value. What are also the price range for most common fees for titled property in Manhattan ?

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Janet M. Nation’s answer
I would also like to add that co-ops provide a level of shared real estate ownership as well as an opportunity to live in locations that many would not be have been able to afford. It's actually pretty smart although not perfect. I would also be careful about how you describe people especially when you don't have the facts.
0 votes Thank Flag Link Sun Nov 10, 2013
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Hi jdh1810,

Cooperative living got its start in the 1880's, inspired by Charles Fourier, a French socialist who argued that cooperation bred efficiency. A French immigrant to New York named Philip Hubert picked up on the idea and built arguably the first co-op, the Hubert Home Club, near the current site of Carnegie Hall.

According to the New York Times, despite their utopian origins, co-ops quickly turned into a celebration of capitalism and exclusivity. Hubert Home Clubs opened on Madison Avenue and next to Central Park, offering the sort of living space that has always made New Yorkers envious, according to the writer Elizabeth Hawes.

Today, co-ops-which sell shares in a corporation that owns the building, rather than individual apartments-- make up the bulk of our housing. As always, the boards have the right to reject any buyer who doesn't quite fit, however they define "fit." So Socialism turned into New York style elitism.

Property taxes in NYC are not like California and not even like other parts of the state. NYC uses a complicated method for determining real estate tax.

Real estate taxes in NYC are determined by multiplying a property’s assessed value by the appropriate real estate tax rate. The assessed value is the property value ascribed to the property for tax purposes. The New York City Department of Finance determines a property’s assessed value by multiplying its estimated full market value by the assessment ratio for the property’s tax class.

The amount of rental income generated if building was a rental building along with the year the building was built is part of the equation used. Therefore a pre-war building built in 1920 on Park Avenue will have a lower tax rate than a building built in 1990 on Broadway.

In New York City, a property can have three different assessed values: an actual assessed value, a transitional assessed value and a billable assessed value. There are four different tax classes of properties in New York. Class 1 generally is for one- to three-family homes; Class 2 is for larger residential properties, including rental buildings, co-ops and condos.

Real estate taxes in NYC are significantly lower than property taxes in most suburban municipalities in the NY metropolitan area. NYC property taxes do not pay for public schools as they do in most municipalities.

Common charges in condos and maintenance in coops vary building to building, neighborhood to neighborhood, even block to block depending on the building's financial health and amenities and services.

Best,

Mitchell Hall
Lic Assoc RE Broker
The Corcoran Group
347-921-HALL
mhalll@corcoran.com
https://plus.google.com/+MitchellHall/posts
3 votes Thank Flag Link Sun Nov 10, 2013
I always appreciate Mr. Hall's posts. His background is fantastic and the information provided is tremendous. This is THE response. Bravo.
Flag Mon Nov 11, 2013
Mitchell Hall, Real Estate Pro in New York, NY
MVP'08
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co-ops came to be as a way to sell properties that had advantages financing on them, either government below market loans or other institutional loans

Co-op boards vary from complex to complex the same as condo boards do. Most people don't like their boards unless they are members of them and that has its own set of issues as well.


I like less our government telling us what to do. And you don't have an option.

In your case you don't have to buy the property.
0 votes Thank Flag Link Sun Nov 10, 2013
I moved here from southern CA as well - spent many years not far from you in Manhattan Beach and Redondo Beach.
And yes, it sure seemed like a concept from Mars to me too. The only positive thing I can see about it is that the stringent approval process has meant almost no foreclosures.
Taxes are all over the place as new properties which are often condos are built with tax abatements so you can pay property taxes that are a lot less than 1.25%.
If you are looking at co ops, your broker should be able to tell you what percentage of the maintenance is tax deductible - its usually around 50%. I was in a building yesterday where it was only 30%.
In any case, there are condos available in the 10128 and if you would like to work with another southern CA transplant to find your new home, give me a call at 310-951-8993 or email tom@citysolutions.com
0 votes Thank Flag Link Sun Nov 10, 2013
It certainly seems beyond comprehension in todays world but back in the 80s when Co-ops started, it was a life saver for low and middle in come housing. Millions of tenants became home owners through this concept and people were and still are able to buy homes lot cheaper than titled properties. However, the concept also allowed a group of volunteer directors to deny any body without disclosing any reasons. That happens far less than it seems and concentrated mostly in manhattan.
For a million dollar plus, I would buy a Condo or Townhouse in Manhattan.
0 votes Thank Flag Link Sun Nov 10, 2013
We have been trying to get legislation passed for years regarding the coop boards disclosing why they have declined a buyer. From what I've seen, many boards are very egotistical and controlling. The reason they are in place is to filter out anyone that might be a nuisance or financial liability for the building. I'm not too sure about the percentages you are looking for.
0 votes Thank Flag Link Sun Nov 10, 2013
Co-ops are highly desired in NYC because they are usually much cheaper to own than a condo/town home would be. For this reason, co-op boards know that many people can afford to live in their buildings so they use a process of elimination to weed out certain individuals that don't match their criteria. I've had numerous clients that met all of the financial requirements (some were all cash buyers) for living in certain buildings, however they were rejected (without reason) immediately after their board interviews. In my opinion, board members are like the doormen at VIP nightclubs. Many people can afford to go in, however not everyone does because they don't possess certain style/characteristics that will get them through the velvet ropes (co-op boards in this case).
And no, not all members of a board are old. I've come across a few that were, or at least appeared to be in the mid-age range (late 30's-early 40's).
Flag Sun Nov 10, 2013
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