Page 6 - CooperatorNews NY November 2021

6 COOPERATORNEWS — NOVEMBER 2021 COOPERATORNEWS.COM CooperatorNews.com From COOPERATORNEWS.COM As Costs Rise, So Do Carrying Charges Monthly Fees for Co-ops & Condos Up All Over the U.S. BY DARCEY GERSTEIN The Community Associations Institute (CAI) estimates that 74 million Americans live in communities managed by homeowners associations, of which condos account for 35% to uting factors of climate change and the particular challenges of volunteer board governance 40%. That’s a lot of people—many of whom may be in for a nasty shock when they go to pay have made associations and co-op corporations more expensive to insure as well. The in- their monthly common charges, if they haven’t already gotten one. Bloomberg and Crain’s New York Business are among the outlets reporting on the national weather events, coupled with rising seas, pollution, and deferred maintenance on ever-aging trend of surging carrying charges for condos, co-ops, and HOAs. The monthly fees paid by buildings, have given insurance providers reasons to be wary of the risks involved with mul- owners of units in multifamily communities and buildings for the upkeep of common ele- ments, utilities, taxes, personnel, and other shared costs have risen significantly this year, in large part due to rising energy costs, but also to repairs, wage increases, and unforeseen New York, tells expenses related to COVID. Crain’s cites data from real estate data aggregator Zillow indicating that the national The more storms, wildfires, etc., we have, the more insurance premiums will go up—and monthly median condo fee increased 19% this year, from about $379 in August 2020 to about \\\[may\\\] reach a threshold where insurers feel it’s not worth the risk. There will be fewer and $451 in August 2021. As the outlet points out, that increase means that unit owners have had fewer companies offering protection.” to find an additional $900 in their household budgets this year. It’s All Interrelated The services that most associations rely on, such as landscaping, plumbing, and construc- tion in general, have seen shortages in both labor and supplies in recent months, forcing at home—and adding more electronics to accommodate their work, school, exercise, social, vendors to increase prices. This in turn adds up for associations, whose residents are ulti- mately responsible for such costs through the monthly common charges. These shortages, in where they are separately metered, the cost for delivery of electricity—and its use in the com- addition to overall inflation, have also increased the costs of energy and utilities nationwide. The tragic, deadly collapse of the Champlain Towers South condo in Surfside, Florida this more residents at home, these common elements get more use. They therefore also require June has had financial repercussions for multifamily buildings across the country. It insti- gated a wave of stricter inspection and repair laws, which has translated to more costs for the associations that must now perform those inspections and repairs. Moreover, the investiga- tion into the cause of the collapse has brought heightened attention to the changing climate’s tenants that pay rent to co-ops and condos have struggled for the last year and a half across the effects on buildings and infrastructure, bringing into stark relief that structures and systems country; many have had to shutter. If they’ve managed to survive, it is likely that they’ve had now age and deteriorate more rapidly due to the harsher environmental factors. While what led to the Champlain Towers collapse is still under investigation, the contrib- creased severity and frequency of hurricanes, wildfires, tornadoes, and other catastrophic tifamily property coverage. Kevin Keating, an architect with Selldorf Architects, a global architectural firm based in CooperatorNews, “Insurance is getting more and more complicated. Insurance companies always look to avoid risk, so they may refuse to insure some projects or buildings. And let’s not forget the ongoing global pandemic that is still killing tens of thousands daily, according to data from the World Health Organization (WHO). It’s also adding costs to co- op, condo, and HOA living. Due to COVID, more residents have been spending more time and leisure needs. While individual households might be charged for their usage in instances mon spaces such as lobbies, hallways, and elevators—is still borne by the association. With more maintenance. And the cycle continues. COVID has also reduced or eliminated other income streams that associations and corpo- rations have historically relied on to offset maintenance and assessment charges. Commercial COVID Reshaped How Developers Build Work Spaces, Fitness Areas, & Green Spaces Are Must-Haves BY A. J. SIDRANSKY Like other bellwether events before it (9/11, the Great Recession), the COVID-19 make it into a workspace, but in the layouts of many buildings, you wind up with areas pandemic has wrought seismic changes to the residential real estate industry. It’s in apartments where you don’t have natural light and air. That’s where the workspace changed the way we live within our own homes, particularly in terms of how we work, goes. how we exercise, and how we balance the need for access to fresh air and green spaces. Going forward, the question arises to what extent architects and developers will fac- tor those changes into the way they design residential spaces, and for how long. Will it become de rigueur for common spaces to be designed for the possibility of the next completely cut off) the ability of many to maintain a workout schedule. Gyms were lockdown? Will apartment layouts include consideration for work areas and exercise closed for months. Exercise equipment became nearly impossible to buy, with weeks- corners as a matter of course? Will more buildings be constructed with more private long waits for delivery. Like work-from-home spaces, Argibay expects that designing balconies and terraces, and more semi-private, residents-only outdoor spaces such as for home exercise nooks and alcoves will also be necessary—at least in some markets. gardens and roof decks? Flexible Interiors Though of course working—and working out—from home skyrocketed because of he says. “As an architect creating these spaces, you must consider ways to also create COVID, the trend toward living spaces that include areas for work and exercise pre- dates the pandemic, explains Antonio Argibay, the founder and managing principal at and potential market, though.” Meridian, an architectural firm based in New York and Miami with clients nationwide. “As far back as 2005,” says Argibay, “we were already incorporating home offices in residential development. When you develop a building for residential use, there’s Argibay. “There was always demand for both private space and community \\\[outdoor\\\] a legal level of light and air you need in each room. That ventilation can only reach space,” he says. “That’s been a trend for at least 20 years—but COVID has thrown 30 feet into each unit. No developer will take a room that is legal for a bedroom and “While the idea of incorporating a workplace into a residence is not new,” Argibay continues, “post-pandemic it’s mandatory for new buildings.” The same is true for areas that can be used for exercise. The pandemic cut into (or “Developers will consider that a substantial number of purchasers will work re- motely and exercise at home, and will want to factor that into their architectural plans,” better lighting and ventilation for those areas. Much will depend on the neighborhood Outdoor Options Outdoor space was also a hugely popular amenity before the pandemic, explains continued on page 18 continued on page 17