Page 1 - NY Cooperator December 2019

December 2019
COOPERATOR.COM
Since their insurgence over the last doz-
en years, Airbnb, Homeaway/VRBO and
other home-sharing sites using a similar
model have provided travelers all across
the globe with alternative—often more af-
fordable—accommodation to hotels, mo-
tels, inns, and B&Bs. The home-sharing
model certainly has been an economic
boon to budget-seeking travelers, locales
with weak tourism, and property owners
who use the services as an income stream.
In many cases, however—particularly in
larger cities in the US—renting out one’s
home on a short-term basis (typically any-
thing less than 30 days) is actually illegal.
In cities like New York, laws precluding
these types of transactions have been on
the books for years; other cities have re-
cently passed or are in the process of pass-
ing laws that are essentially reactions to
the deleterious effects of home-sharing on
city budgets, community character, gentri-
fication, housing scarcity, and residential
safety.
Share and Share Dislike
Like with many of the titans of the
so-called ‘share economy’—ride-sharing
services like Uber and Lyft; office-shares
like WeWork—the practical application
of home-sharing has shifted from a literal
‘share’ to something less personal, and
more transactional. Just as the car-share
model has morphed from hitching a ride
with a fellow commuter to basically hailing
a private livery service, the typical home-
share is not of the ‘stay in my spare bed-
room for a week’ variety.
According to Inside Airbnb, an inde-
pendent, non-commercial set of tools and
data intended to show how Airbnb is re-
ally being used in cities around the world,
51.8% of New York City’s approximately
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In markets throughout the nation, 2019 was a year of uncertainty, reflecting change
in the basic mechanisms of how we view, buy, and sell real estate. That uncertainty
extended to all markets, from traditional single-family homes to co-ops and condo-
miniums, to commercial properties – and the same factors that affected markets in
2019 are expected to continue to reverberate in 2020.
Taxes, Real Estate, and…Taxes
When it comes to home ownership, the conventional wisdom of economists after
World War II (and the government policy that followed it)” held that appreciation
of real estate as the primary asset of middle-class families was the most successful
and secure way to build wealth and insure a comfortable retirement – particularly
when combined with Social Security retirement benefits. As a result, and to encour-
age home purchases and long-term ownership, government at all levels offered ben-
efits to families in the form of tax deductions. The federal government enshrined that
approach by providing a deduction for state and local income and real estate taxes
against income in federal income tax filings.
Over the decades since the mid-20th century, the evolution of deductible taxes
has developed in two main directions, sometimes simultaneously. Some states and
municipalities have enacted state and local income taxes, while others – especially at
the local level – have levied higher and higher real estate taxes to provide for superior
schools and other civil services. These state and local taxes (often abbreviated with
the acronym SALT) became an important consideration in home prices, as they had
long-term effects on the after-tax cost of home ownership. In most cases, these de-
ductions made homes in high-tax areas more affordable, after tax considerations were
In today’s world of high-tech property
management and building security, there
are more options than ever for managers
and boards to choose from to keep their
communities on the cutting edge. There
are web- and device-based apps for ev-
erything from package delivery to door
entry to bill paying. When considering
updating, or introducing new manage-
ment or security technology, the question
for co-op and condo board members and
their building managers is not necessar-
ily which tech is best, but rather which is
most easily adaptable for the people who
will actually be using it: the residents.
Broad Spectrum
There are any number of technologies
designed to improve efficiency, safety,
and security in all aspects of property
management and communication for co-
op and condo communities. They come
in all shapes and sizes, from simple in-
dividual apps designed to answer your
doorbell or track and accept packages, to
broad-based, integrated systems designed
to do just about everything. Choosing
one over the other is often a function of
the size and complexity of the association
or corporation using it. A five-unit walk-
up condo has significantly different needs
than a 500-unit co-op with multiple el-
evator banks – but regardless of commu-
nity size, for any app- or web-based tech
assistance to be successful, the people liv-
ing in the community have to believe in
and use it.
BuildingLink is both a communica-
tion tool and a management tool, based
in New York City with clients through-
out the United States, Canada and inter-
nationally. Their overall system includes
many different modules that support ser-
vices ranging from document delivery to
communication with residents, key secu-
rity to maintenance schedules. According
to company CEO Zachary Kestenbaum,
communication on all levels and about
all subjects is the key. Functional, effec-
tive management/security tech should
provide “everything related to operations
calculated in the cost of ownership.
The Tax Cuts & Jobs Act of 2017 changed that. While the
new law increased the dollar amount for a standard deduction by
doubling it, the change also capped SALT deductions at $10,000
per year for a married couple filing jointly. That cap increased
the after-tax cost of home ownership, ultimately depressing or
even permanently decreasing values, and therefore prices.
2019-2020 Round-up
and Projection
The Year that Was, The Year to Come
BY A J SIDRANSKY
The Illegal Home-
Sharing Issue
Safety and Security Concerns
BY DARCEY GERSTEIN
Introducing New
Security Tech in
Your Building
The Challenge of Change
BY A J SIDRANSKY
205 Lexington Avenue, NY, NY 10016 • CHANGE SERVICE REQUESTED
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