Will My NYC Co-op Maintenance Increase? What to Watch

When you own an apartment in NYC there are ongoing costs to living in the building besides your mortgage payment. When you buy in a condo building these fees are called common charges (plus a separate property tax bill). When you buy in a co-op building these fees are referred to as maintenance (which includes your apartment’s share of property taxes). 

What is co-op maintenance in NYC?

Co-op maintenance payments are broken into two main categories. The first is the ongoing costs to keep the building running (doormen, security, porters, cleaners, the super’s salary, general upkeep, etc.) as well as larger capital expenditures which are typically amortized over a longer period of time (sometimes via a special assessment). The maintenance in some buildings also covers utilities such as hot water, heat, or even sometimes electricity. The second is taxes. The building will receive a tax bill from the city and will then divvy up that bill based on the percentage interest you own in the co-op. 

Each building will maintain a budget based on the co-op board and money will be paid out based on how the board directs it. The general rule is that the higher the maintenance the less attractive an apartment is and therefore the lower the price of the apartment (all things equal).  

Average monthly co-op maintenance in NYC

Some experts estimate that the average co-op maintenance in NYC varies from $2 to $5 per square foot per month in any given building. 

Why does maintenance vary for each NYC co-op? 

• Building reserves
• Amenities
• Size of building
• Reliance on commercial rents
• Building mortgages
• Land leases

Building reserves: If a building keeps a large amount in reserves this can help buoy larger capital expenditures and help keep increases in maintenance and special assessments to a minimum. 

Amenities: Amenities cost money so if a board decides to over-amenitize the building it will result in capital expenditures as well as high on-going costs to maintain. co-ops with no amenities, no elevator, and no doormen, tend to have the lowest maintenance. 

Small vs. big building: The larger the building the more units and people to amortize expenses over, so all else equal, larger buildings may have lower maintenance costs than smaller buildings.

Reliance on retail or commercial rents in building financials: Some co-ops have commercial space in the building that when rented out can help subsidize large amounts of the running costs of the building. This can be a boon for owners but can also create headaches when they sit vacant for long periods of time. 

Co-op buildings with mortgages vs. without mortgages: Some co-ops in NYC have mortgages on either the land or the building. This will result in higher maintenance than if these items were owned outright by the co-op. 

Land leases: Similar to mortgages, some buildings don’t actually own the land the building sits on. For example, many buildings in Battery Park City have land leases with the City of New York. This is an additional cost that must be covered by the co-op and can lead to higher maintenance payments. 

What is a typical annual increase for co-op maintenance?

As with most costs in your life, over time these expenses will generally grow with inflation. Increases of 2% to 5% per year are typically the normal increases. 

When auditing historical increases over time, one can look at units in the building on StreetEasy and determine the average annual increase over a long period of time. Small consistent increases are generally viewed positively verus large changes.  If you have questions the team at Prevu can help calculate the rate of change in a particular building. 

Don’t overly stress out about maintenance and the building financials because after an accepted offer your attorney will have the opportunity to review the building financials to determine the general financial health. 

Will special assessments impact my monthly maintenance?

Some buildings avoid permanently increasing common charges by doing special assessments for larger capital projects. This will keep maintenance low and also potentially have beneficial tax implications by increasing your cost basis in the apartment (versus normal maintenance will not). Some subscribe to the idea that keeping maintenance lower and doing special assessments keeps the building honest about runaway maintenance. 

Maintenance and expected increases in the maintenance over time are good things to keep in mind when calculating your co-op apartment budget over a long period of time. High maintenance can really add up. 

Looking to buy a co-op apartment? Browse listings in your favorite NYC neighborhoods.