Just as the tax abatement for the Citylights Building was about to start rolling off, NYC boosted the buildings assessed value by 87%. For good measure they tacked on another 5% this year. The near doubling in possible tax payments has the co-op’s residents looking at a 50% increase in already steep monthly maintenance over the next five years, which if implemented on this tower of over 500 units will force out many residents who can no longer afford to live there.
You can read the story below for more details. Instead I’d prefer to focus on two takeaways that all apartment owners in Long Island City should consider vis-a-vis how their buildings are managed financially. The first lesson is to put money away for a rainy day, aka a leaky roof. In other words make sure you have built up a big reserve in advance of the tax abatement roll-off, as this period happens to coincide with an end to the useful life of many building components, whether they be roofs, elevators, chillers, or who knows what? Citylights stumbled badly in this regard, and has other faults of its own making – the details of which I won’t get into here but are easily construed from its reduced selling prices. Nevertheless it also a few advantages, most notably its huge size gives it economies of scale operationally relative to condo buildings nearby. Given that most of those buildings are relatively new, it wouldn’t surprise me if developers didn’t underestimate future capital expenditures in setting common charges in order to ‘dress up’ the units financially. Thus take heed from your large neighbor and make sure your maintenance run rates are true and you’ve built up a heftier than standard reserve.
The second takeaway is that the current administration downtown is gunning full throttle for those – from rich to poor – who took on all the financial risks of home-ownership as it simultaneously cuts cushy deals with developers to create affordable housing – I mean it’s got to get the money from somewhere. If they could double the taxes at the last minute on a dated building like Citylights, all new condo owners in Long Island City should make sure their personal finances are also in order before they get whacked.
Residents Protest Co-op Tax Spikes at Hunters Point Park Opening - the end of a 20-year-tax abatement in July
Manhattan Apartment Inventory Rises, as Sales Dip Persists – sounds about right
Hunters Point Zooms Up Priciest Neighborhoods List – from 83rd to 23rd in a decade
Investors Are Piling Into New York Condos at a Record Pace – investors maybe, occupants maybe not
New Live Music Venue to Open in Long Island City – Former Webster Hall executive vp and chief operating officer has joined the management team at The Arc, a 20,000-sq.-ft. new concert and recording venue in the Kaufman Arts District
2018 Young Architects Program Installation Opens at MoMA PS1 – oh to frolic naked in the courtyard
JVB Endorses Cynthia Nixon for NYS Governor – reach for the stars
Rendering Revealed For Rockrose’s Hunter Street Triangle Building - the flatiron of LIC?