Sunday, December 21, 2008

... And No Renovations in the Lobby

December 21, 2008
... And No Renovations in the Lobby
By VIVIAN S. TOY
http://www.nytimes.com/2008/12/21/realestate/21cside.html

WITH the recession taking firm hold and the number of jobs lost in New York City expected to grow by as many as 150,000, co-op boards across the city are doing what they can to help keep costs down for shareholders.

As boards determine next year’s budgets, many are opting to postpone large projects to help minimize increases in maintenance charges.

“Boards are concerned about passing along increases, and they’re taking a hard look at projects that might be discretionary,” said John Janangelo, the president of Bellmarc Property Management, which manages more than 50 buildings in Manhattan and Queens.

Dated lobbies and dowdy hallways may not get a makeover for another year, he said, and upgrades on security cameras or health clubs may also be deferred. But repairs on essential systems like air-conditioning or boilers will still be approved.

And if there is anything positive in the economy’s implosion, it’s a decrease in fuel costs. There were big spikes in energy costs in the last two years, which put maintenance increases at 10 percent on average. But maintenance increases in 2009 will probably be much lower, Mr. Janangelo said.

At 300 Riverside Drive, the co-op board made several decisions that will ultimately reduce the overall monthly bill for shareholders in 2009. “We did these things because we understand that these are difficult times,” said Jon Reiner, the co-op board president.

The building had a net gain of $500,000 when it refinanced its mortgage at a lower rate this fall, and the board initially planned to use that money to shore up its reserve fund, redesign the lobby and begin construction on a roof deck. Because of the economic downturn, the board decided to proceed with the lobby renovation but put off the roof deck.

The board also voted to use some of the proceeds from the refinancing to retire debt, which will eliminate a monthly assessment worth about 6 percent of each shareholder’s monthly maintenance. Even with a 3 percent increase in maintenance fees, shareholders will still get a 3 percent reduction in overall costs.

“In other years, we might have decided to proceed with the roof deck,” Mr. Reiner said. “But what we’re doing will be a benefit to shareholders in the tough year that we will be facing.”

Co-op Boards Get Tough and Tougher

December 21, 2008
Co-op Boards Get Tough and Tougher
By VIVIAN S. TOY
http://www.nytimes.com/2008/12/21/realestate/21cov.html

WITH sales of co-ops and condominiums in New York City slowing to a virtual trickle in recent weeks, many brokers suspect that would-be buyers are sitting back and hoping to time their apartment purchases to coincide with the exact moment that the real estate market finally hits bottom.

Some sellers, meanwhile, are considering renting their homes instead of selling them in hopes of avoiding that bottom. And if they are trying to sell co-ops, they are hoping that the co-op board will loosen the rules and help widen the buyer pool by allowing the purchase of pieds-à-terre or permitting parents to buy for children.

But brokers, lawyers, property managers and co-op board members agree that if anything, co-op boards are going in the opposite direction — more carefully scrutinizing potential buyers and establishing tougher financial requirements.

“No one is loosening their admissions policies,” said Stuart M. Saft, a lawyer and the chairman of the Council of New York Cooperatives and Condominiums. “What’s going on in the market has just reconfirmed their belief that they have to be watchful of who they let into the building.”

The rigorous financial review that most co-op boards have long required of buyers is precisely what has kept the foreclosure rate in New York City extremely low, Mr. Saft said.

“Boards feel that protecting all of the residents of the building through strict policies is the best thing they can do,” he said.

Frederick Warburg Peters, the president of Warburg Realty, says that boards are not likely anytime soon to relax rules on who can buy into their buildings. “A co-op board tends to see itself as a guardian of the shareholders who remain in a building,” Mr. Peters said, “not as a facilitator of sellers.”

With financial markets in crisis and unemployment rising by the hour, many co-op boards are looking very skeptically at buyers who have large stock portfolios or who earn much of their income in year-end bonuses that may not materialize.

To counter that and to satisfy the concerns of co-op boards, these buyers are finding that they must either increase their down payment to 50 percent of the sale price or more, or put six months’ to two years’ worth of maintenance into an escrow account.

Some boards have also made it clear that they prefer buyers with fixed-rate mortgages over those with adjustable-rate mortgages; buyers with interest-only mortgages need not apply. These are not the sorts of requirements that appear in the bylaws or the house rules, but in this market, word gets out quickly after a board rejection.

“If you get a board turndown, you can ask how to improve the application,” said Richard Grossman, the executive director of downtown sales for Halstead Property. “I’ve seen some approvals lately where the board tried to work with the buyer, either by asking for money in escrow for maintenance or for additional down payment to increase the equity in the apartment.”

Robert J. Rosa, an executive vice president at Century 21 NYC, said that’s exactly what happened in a recent deal. He represented a father buying an alcove studio for his daughter on East 21st Street. The father, an investment banker, planned to take out an interest-only mortgage even though he had about $10 million in liquid assets and could easily have paid cash for the studio.

Board members told Mr. Rosa that they wanted the father to get a fixed-rate mortgage. And because the daughter earns only about $50,000 a year, they also requested that a year’s worth of maintenance, about $10,000, be put in escrow. The buyer said he would agree to those terms, even though it would increase the mortgage rate and require a higher down payment, but he told Mr. Rosa to seek a 20 percent price reduction from the seller.

“I said: ‘You’re crazy, the owner won’t agree to that,’ ” Mr. Rosa recalled. But to his surprise, the owner agreed to about a 10 percent reduction.

“He was annoyed, but in this market, he didn’t want to lose the deal,” Mr. Rosa said. The apartment, which had been listed at $517,000, sold for $462,000.

These kinds of circumstances have inadvertently given co-op boards much more authority over deals than they had when they merely said yes or no to a potential buyer, according to Paul Gottsegen, the director of property management at Halstead.

He said he had seen several deals recently in which co-op boards had asked for a year’s maintenance in escrow and, rather than risk losing the buyers, the sellers had agreed to put the money into the account on behalf of the buyers. “Buyers are scarce and sellers are anxious,” he said. “So a board’s determination can give it a great deal of power over the actual contract between the buyer and the seller.”

Real estate agents say they have also heard of co-op boards that rejected applications because they believed the sale price was too low and would adversely affect the values of other apartments in the building.

Lisa Lippman, a senior vice president at Brown Harris Stevens, says such behavior is characteristic of transitional markets.

“Everything is going to be below 2007 prices, and it’s going to take awhile for boards to get used to those prices,” she said. “But the risk they run is: if they reject a contract for being too low, the next one could be even lower.”

A co-op board that believes it is protecting property values by rejecting low bids is being unrealistic, said Richard Siegler, a Manhattan lawyer who represents about 150 co-ops. “You can’t keep prices fixed forever,” he said. “And it affects everybody at some point, because eventually nobody can sell their apartments.”

If the market slowdown follows the pattern of previous ones, one area where co-ops may start to loosen up is subletting. Brokers and property managers said they expected to see that happen next summer, about nine months into the market’s decline.

“It’s only when shareholders have had their places on the market for nine months or longer that it’s clear there’s trouble, and they become clamorous for help,” said Mr. Peters of Warburg.

Mr. Siegler said that co-op boards had used subletting as a safety valve in previous downturns. If an owner has already moved out, renting the apartment might prevent that owner from going into default and could also ensure that the building continues to collect maintenance charges for the apartment. “Subletting would allow them to continue owning until prices go back up and the market is stabilized,” he said.

At Two Fifth Avenue, a 20-story building with more than 300 apartments, Adelaide Polsinelli, the co-op board president, said that several shareholders had already asked if they could rent their apartments as an alternative to selling.

The building previously allowed sublets for only one year in the entire ownership of a shareholder or two years if a shareholder could prove hardship. But the board decided this month to extend the limit to two years for all shareholders and up to three years in the event of hardship.

“It was in response to the times — a way to give people options and pre-empt them from having to struggle,” Ms. Polsinelli said. “I’ve been around a cycle or two, and I thought I’d try to get in front of the problem.”

Tuesday, December 2, 2008

Alternative pets for buildings that are not pet-friendly

December 28, 2008
The UnDog and the NonCat
By TERI KARUSH ROGERS
http://www.nytimes.com/2008/12/28/realestate/28cov.html

IN a city awash in creature comforts for those who can still afford them, a few remain unattainable at any price. Some New Yorkers who yearn for the comfort of creatures — specifically, cats and dogs — find themselves stymied by their apartment buildings’ restrictions on pets.

But just as city dwellers are accustomed to settling when it comes to real estate, many aspiring cat and dog owners turn to other species to satisfy their yen for a cuddle, companionship or wish to convey childhood lessons in responsibility.

A partial list of things that slither, hop, glide, swim or scurry beyond the purview of co-op boards, landlords and occasionally, the law, includes chinchillas, parrots, bearded dragons, tortoises, pythons, fancy mice, monkeys and ferrets, along with a more pedestrian assortment of gerbils, guinea pigs and goldfish.

Many owners of these creatures swear that their offbeat choices have turned out to be nearly as satisfying as a dog or a cat.

Consider Pounce, the free-range rabbit sharing a two-bedroom apartment with Jennifer Edwards, Jim Gaherty and their sons, Dylan, 13, and Liam, 10.

Before Pounce arrived last April in their Upper West Side no-dogs-allowed co-op, the family had owned beta fish and gerbils.

“The big problem with any of those is cleaning the cages and tanks, and when there’s no payoff, it’s kind of a drag,” said Ms. Edwards, 44, a health care policy consultant whose allergy to cats ruled out a feline solution to the family’s desire for a more interactive pet.

“I had no interest in living with birds because they’re not my style — they’re in my airspace,” Ms. Edwards said. “It was hard to figure out a pet that would be acceptable to me and cuddly enough for the kids. I thought maybe turtles or some sort of reptiles — they’re not cuddly, but they don’t jump out of your hands.”

A rabbit didn’t enter their thoughts until the day Dylan happened upon a floppy-eared Holland lop at a pet store. As he wandered around the shop cradling the 12-week-old bunny, Ms. Edwards recalled, “people started telling us how trainable rabbits are — how they can be litter-box-trained and you can let them out of their cages.”

They took the rabbit home and within a month (during which Pounce litter-box-trained himself) they gave him virtually free rein over their two-bedroom apartment. (Pounce’s occasional misfires take the form of odorless hard pellets about the size of an M&M.)

“He’s a lot more petlike than I expected,” Ms. Edwards said. “Rabbits like company, and they’re smart.”

Pounce typically spends his days with Ms. Edwards in her dining-room-cum-home-office. The plump six-pound rabbit nibbles on timothy hay and the edges of low-lying folders.

When the boys are home, the rabbit may decide he needs some quiet time under the sofa. Or he may lounge attentively between Dylan and Liam while they play video games. Later at night, he snuggles up against the adults on the sofa for television.

To be sure, Pounce has his naughty side. Rabbits are notorious chewers, and Pounce is no exception. He has gnawed through electrical cords and the corners of doors and drawers (now sealed with clear packing tape to prevent further incursions). Pounce has also denuded more than one potted herb plant left on a seductively low-hanging shelf.

He also sheds enough to warrant Ms. Edwards’s use of the vacuum cleaner once or twice between her housekeeper’s biweekly visits, and the special recycled paper lining his litter box needs to be changed twice a week to prevent odor.

On the other hand, unlike the dog the family had initially wished for — and now could have, thanks to a recent change in building pet policy — Pounce doesn’t bark, need grooming or demand to be taken for walks.

Mr. Gaherty, 45, a geophysicist, wasn’t consulted on the decision to adopt Pounce. But he sounded affectionate toward the rabbit in a nonpublic, indeterminate-pronoun kind of way.

“I’m a dog person, and you can’t say it’s like a dog,” Mr. Gaherty said. “You can use food to make it responsive. Rabbit food smells better than cat food, litter boxes smell bad either way, and rabbits chew but cats scratch, which is probably worse.”

Like the Edwards-Gaherty family, would-be dog owners usually list interactivity high on their list of desired pet qualities, which is why many choose birds as a substitute.

“Birds are extremely intelligent,” said Linda Pesek, a veterinarian at the Center for Avian and Exotic Medicine on the Upper West Side. “They can recognize their owners, and they can interact.”

Tonia Misvaer couldn’t agree more. She and her husband wanted a dog, a pet prohibited by the lease on their rented apartment on the Upper West Side. They bought their first avian, a small parrot known as a lovebird, on impulse four and a half years ago.

“Yogi had a lot of personality,” said Ms. Misvaer, 33, a graphic designer. The couple trained the bird to go to the bathroom in its cage and gave it unfettered access to their 900-square-foot duplex.

“We were surprised that they make really interesting pets,” Ms. Misvaer said. “He had a chest of toys he played with on the floor, and he particularly liked to push things off bookshelves. We both liked him a lot, although he didn’t like my husband. He would poop in his shoes every once in awhile and drop things on his head.”

After Yogi died from a melamine-poisoned treat a year and a half ago, the couple bought two more birds.

“We wanted a little bit better of a parrot — one that could maybe talk and live longer,” she said. They settled on Swami, a Meyer’s parrot, and Odin, a Jardine’s parrot.

“They’re both quiet birds and fairly small,” Ms. Misvaer said. “A lot of times when people think of parrots they think of huge macaw parrots. But Swami is six inches and Odin is seven or eight inches tall. They don’t squawk or scream, so they’re good apartment birds.”

So far, the birds have learned a few words and can dog-whistle. (Swami can also wolf-whistle, which Ms. Misvaer discovered while riding with him on a crowded subway.)

The facet of avian husbandry that has surprised Ms. Misvaer most is how time-consuming it is.

“A dog will hang out and sit on your lap or take a nap,” she said, “but birds are constantly active. I mean, they’ll sleep a lot, but they demand a lot of attention. Odin has terrible separation anxiety. When I’m in the apartment he will run across the floor and look up at me until I pick him up and put him on my shoulder. Also, if you want a healthy parrot you really need to cook. We spend maybe 30 to 60 minutes a day preparing food —cutting up fresh fruit and vegetables and baking bird bread.”

It’s common for neophyte owners to assume that birds are low-maintenance creatures, said Stephen L. Zawistowski, an animal behaviorist and the executive vice president and science adviser for the American Society for the Prevention of Cruelty to Animals.

“They’re not a great pet if you’re out of the apartment all day,” Mr. Zawistowski said. “They need company more so than a cat. If you don’t interact with birds, they can develop behavior problems, and as a form of anxiety they will actually pick out their feathers.”

Mr. Zawistowski says many bird owners are also stunned by how loud birds can be. For apartment dwellers, he recommends finches, especially the hardier zebra and society varieties: “They tweet a lot, but they’re not superloud. They’re interesting and active. You don’t need a massive cage. And you can keep several of them, so you don’t have to worry about social questions.”

Parakeets are louder, more active and comical, he said, while “canaries have been an immensely popular bird in the city of New York since the mid-1800s.”

“But with apartments you have to be very careful of cleaning products and pesticides, and the Teflon frying pans release fumes on the stove that are toxic to birds,” he said, “so you have to keep them away from the kitchen and the cleaning products.”

There is also the matter of keeping pets away from the neighbors: Tales abound of escaped hamsters, among other things, that wind up in someone else’s apartment.

This is of special import in a no-pet building, as most buildings with restrictions on pets prohibit any sort of animal — not just cats or dogs — without the permission of the board, said Lisa Breier Urban, a real estate lawyer with Breier Deutschmeister Urban & Fromme in Manhattan.

“That’s not to say people don’t go to the pet store and buy whatever they want,” she said. “It’s much easier to harbor a pet in the building if it’s not a dog. Unless the animal is a nuisance, the buildings in general are not going to enforce the rules.”

Typically, the nuisance consists of a foul odor coming from an apartment with cats, but not always.

“We had a case where someone had two or three rabbits and they were not keeping the cages clean,” Ms. Urban said. “The neighbors complained about the smell, and the building required that the people get rid of the rabbits. And we had a case a couple of years ago where a rent-stabilized tenant had a lizard that ate crickets. The crickets were shipped in by mail, but somehow they got out all over the building and they had a huge cricket problem.”

Beyond the special challenges presented by their sometimes hopping diets, reptiles frequently require high temperatures and humidity levels to thrive.

Some owners, however, appreciate reptilian reserve.

Evan Cohen has lived with a five-foot-long iguana, Roxy, for the past 11 years in a studio apartment in Greenwich Village. The iguana is house-trained (each morning it relieves itself in a paper-towel-lined bathtub, which Mr. Cohen scrubs down with bleach afterward) and wanders freely through the 525-square-foot dwelling.

“I think that to him, this is his apartment, and he’s letting me live here,” said Mr. Cohen, 36, a former jack-of-all-trades who is now an undergraduate student at Columbia University. “I think he’d prefer it if I wasn’t living here. I admit he’s not a snuggly type of animal, but that never really bothered me — you can still pick up a 13-pound-lizard and hold him and pet him as much as he’ll tolerate.”

Alice and Morgan Dontanville were barred by their lease from getting a dog, but wanted something that was cuddly as well as quiet, clean and relatively low maintenance. Back in high school Mr. Dontanville had owned an intelligent and extroverted rat; this led them to consider something in the rodent family. They eventually settled on a chinchilla.

“Chinchillas have the advantages of the other rodents — they’re friendly and they respond to you — without the weird tail,” Ms. Dontanville said. “He looks like a cross between a small bunny and a giant mouse with a squirrel-esque tail. He has tiny little feet and legs and a big, pudgy, unbelievably silky body.”

The Dontanvilles bought their first chinchilla several months ago at a pet store. After a couple of weeks, it fell ill with an intestinal blockage and, $2,000 in vet bills later, had to be euthanized. After learning more about the proper care and feeding of chinchillas (don’t give them pet-store food, recommended Ms. Dontanville, or keep the temperature over 75 degrees), they bought their current chinchilla, a six-month-old male named Ajax, from a breeder in Brooklyn.

Ajax lives on Ms. Dontanville’s former craft table a few feet from the kitchen, inside a 32-inch-high black-wire cage made for rats. He is conveniently nocturnal, springing to life around 9 p.m. after the couple come home from work to their garden apartment in Sunset Park, Brooklyn. Several evenings a week they take Ajax out of his cage for a romp in the chinchilla-proof second bedroom. (Chinchillas will chew practically anything, including much that is harmful to them.)

“At first he was hiding a lot, but now he’s sitting on my lap a lot,” said Ms. Dontanville, adding that she and her husband had become surprisingly obsessed by Ajax. “He’s very affectionate and responsive but doesn’t really like to be held yet — you interact more than cuddle with him.”

Grooming consists of an excited wriggle in a metal container about the size of a shoebox, filled with a specially purchased ash-like dust. And while chinchillas can’t be completely house-trained, their arborio-rice-size droppings are easy to sweep up.

Much like dogs, Ms. Dontanville said, chinchillas care about and respond to attention from their owners. “You feel like you really matter, and he loves your attention the same way a dog really loves human attention,” she said. “It’s the appeal of a puppy without the daily walks and the pooper scooper.”