Co-ops are finally descending from their perch above the reality of the New York City real estate industry and are reducing restrictions on buyers into their tightly held communities. According to Habitat magazine, more co-ops are reversing previous policies and allowing LLCs and family estates to buy units in buildings in an effort to remain attractive to buyers as the price of real estate soars in the city.
In the past, co-ops resisted those ownership structures for two reasons: a corporate buyer might use it as a pied-a-terre and diminish the sense of communtiy the co-op covets, and the entities are harder to hold responsible for unpaid maintenance or damage fees.
But as the price of co-ops has grown 89 percent in the last decade, the type of buyers snapping up co-op shares has changed. They are often celebrities or other people who possess enormous wealth and want anonymity and can benefit from a reduced risk of a residency audit for tax purposes. Still, the co-op boards often require a point person for an entity who can be immediately contacted in the case of damages or unpaid fees.
“It’s a reflection of the changing times,” said Siim Hanja, a senior vice president at Brown Harris Stevens. “It’s not another artist who moves in when someone retires and moves upstate. It’s someone from Italy with $100 million net worth.” [Habitat Mag]