Tales of UES Coop Woes

I refuse to join any club that would have me as a member.

- Groucho Marx

You beat me to the punch! I was about to post this article. While I can’t imagine buying a coop, I have to say I do like the UES, and, hate to admit it, I think I actually would prefer living in UES than downtown. Maybe it’s because I’m getting older!! But to me, the UES feels more like the “ real” NYC, with “real” New Yorkers, while in Downtown I am surrounded by fashionistas, spoiled NYU college brats, pretentious bloggers, etc, etc….if we had to do it all over again, we’d buy a condo in the UES and happily take the discount relative to other “trendy “ areas

To me at least, this article is basically an advertisement for UES coop living, rather than a critique. Telling me that fake celebrities, bi-coastal lawyers and swimming pools invaded by spoiled children are all miles away in downtown condos is reason enough to look uptown.

Said this before, I also really like the Upper East side.. would love to live along Park avenue or 5th avenue in my dream alternative universe.

Due to proximity of these stuffy coops to my daughter's school, I know a few of these parents. Now they are there due to the choice of private schools on UES, easier commute to Bronx private schools, Cenrtral Park facilities (plus they already own these) not due to the connections living in such coops may give them. Most of them don't think about prestige any more - that is gone with the tech bros and hedge funds based money. Tribeca parents don't like their kids commute to private schools even though they like living downtown.

Personally, I like the value the coops around Park Avenue offer in $2-5mm price range post reno if you are willing to renovate and can get through the board.

BTW, condos on UES are not cheap suggesting that it is more of the boards being difficult than the desirability of the neighborhood. NYC rich (call it >$10mm apartment buyers) have far more choices now due to expanded condo supply.

I wonder when we'll see one of these boards in these somewhat stagnant buildings make a meaningful jump to a more transparent and seamless process for ownership? I think if you look at some of these co-ops like any failing business, one has to put together a plan to right the ship.

I can see that happening starting at the lower end where most apartments are less than $5mm. They gotta start with making the financial requirements clear as in say 25% down and 15% of apartment price plus reasonable reno cost in liquidity. When will it happen? It seems old guard has to be phased out. Can take 10 more years.

@nyc_sport +1

@KeithBurkhardt - That's the way forward. Isn't it underway?

@300 The aristos have to die off

MTH, Fortunately, they are slowly stepping off the board as they get old. It is a slow process. They will not change their mind easily even though their heirs are the ones who suffer the most.

In the meantime, 2nd/3rd ave on UES has becomes more desirable due to the second ave subway and younger people not caring as much about status.

“… younger people not caring as much about status…”. Oh, they care about status - in fact they’re rather status obsessed. But they haven’t aged or fully earned into the point where real estate is one of the key signifiers. And the changing tastes may leave real estate as a lesser signifier than it was in the past.

I think NYC RE is not the positional good for millennial that it was for GenX.
GenX kind of came up thru the pre-GFC NYC RE bubble and I remember early in my career it was the only thing they talked about.

Now that I am older now than they were then, I don't see people in my cohort, even those that own NYC RE really talking about it much.

I think some of it is the PTSD of GFC and people not flaunting wealth quite the same way anymore (good).

Aaron:

That is the tiktok crowd. More renters than buyers in NYC in my opinion.

Oh, they care about status - in fact they’re rather status obsessed.

>> Now that I am older now than they were then, I don't see people in my cohort, even those that own NYC RE really talking about it much.

I don’t think that’s GenX-specific, the Boomers were doing the same. Probably has more to do with NYC RE being the road to riches circa 2008 to being a dog of an investment 15 years later. The Millennials just didn’t have any money to be involved in 2008, and there was nothing interesting to talk about the next 15 years. “Yeah, I bought a small unremarkable apt… paid a lot of interest and taxes, more than I would have paid on rent… until it was too small for me… so I moved into a somewhat larger unremarkable apt… selling the old one after 9 months and 4 price chops… down to the same price I had bought it for 10 yesrs later… but hey, I got my money back… if I ignore the broker fee and transaction taxes… wanna see the kitchen?”

These things go in cycles. Boomers absolutely possessed with stocks & day trading in the late 1990’s. But a decade later, many had totally disavowed it. I recall one telling me to “be careful” in 2009, followed by a story of how the spouse had lost oodles in 2000 that never came back. And more recently, I heard basically the same story a second time.

I dunno what the future will hold, but I’m pretty sure whatever is big on the minds of Millennials today will disappear from the zeitgeist after a prolonged spell of doggedness.

>> That is the tiktok crowd.

With 57% of Gen Z (70M in the US) wanting to be influencers, this’ll be fun to watch as zeitgeist changes. 40M people chasing a $24B market supported by those same 40M eyeballs. The other 30M are going to clean up doing something / anything else across the decade other than staring at the grand circle jerk 6 hours a day in the name of buildiing followers.

If there were anybody who paid attention to themes in my semi-coherent ramblings over the years they would be able to tell you that one of them was Coop Attorneys telling Coop Boards they could do whatever the f*** they want to was problematic. I just skimmed the article so I do know if they mentioned that just about everyone having heard some crazy overreaching Coop Board horror stories has helped unpolish that apple/take the bloom off that rose/etc People can imagine that some authority having absolute control over them with little recourse against their capricious decisions would make them feel like the bottom 50% of New Yorkers felt about how much control they had over their lives on a daily basis and find that kind of equality unbearable.

A couple of quick thoughts:

First, this article isn’t really an apples-to-apples comparison. I’d love to see data comparing the value changes of pre-war co-ops versus older condos (pre-2000) over the past decade. I haven’t dug into the numbers, but my guess is that older condos haven’t appreciated as much as older co-ops. Sure, new condos come with a premium because they’re sleek and modern, but I don’t think they hold their value the way co-ops do.

Second, if someone is dropping $10 million on an apartment, there’s a good chance (like 80%) they’re planning to send their kids to private school. The problem? That infrastructure just isn’t fully developed downtown yet. Schools like Avenues and Grace Church are still relatively new, and their college placement isn’t on par with the established uptown schools. So in a way, these buyers are making their kids the test subjects for these schools—all for the status of living in a shiny new downtown condo.

The kids will get by.

jsw, Kids of many downtown parents go to uptown schools in some cases starting 6th or 9th grade. And Avenues has really come up in rankings and placements as they have had their first few high school graduates.

Condo comparison is hard as there weren't that many condos on prime UES to start with. But WSJ is clearly not comparing older coops to older condos. Their index data is merely for entertainment. From what I see, prime UES "formerly" prestigious coops prices are down 10-20% (more for >$10mm coops) in the last 10 years and Street Easy index is flattish.

I think it's a combo of "boards being difficult" (which I guess I'm glad about overall, because it means I have a job, but I live here too and it is tiring) and "everything needing renovation" -- these grand old apartments would be magnificent to live in once you're done, but you know from the size and scale that this ain't a six-month renovation, and I think that alone is tough for people to swallow.

Ali,

You make a good point about many of these grand coops apartments needing renovation and the diffculty which comes along with that due to the overlord boards and work rules etc. Even if some of these coops may be in good condition, they are not current taste and possibly configuration.

I think about finding myself one of these needing full reno around 86th and Park but I don't want to pay for the luxury of full service and doorman. So the idea remains mostly entertainment.