Tuesday, November 9, 2010

Low-income co-ops are a real steal

From the NY Post:

A little-known home ownership program meant for low-income New Yorkers is being exploited by savvy buyers looking to make a quick buck.

Turns out you can buy a co-op in the city for $250 -- about what it would cost you to spend a night at a hotel -- and then flip the unit at market rate.

About 1,200 buildings in Manhattan, Brooklyn and The Bronx feature about 25,000 co-op apartments that sell from $250 to $40,000. To qualify for one, you can't make more than 165 percent of the average income for New York City and surrounding counties. For a family of four, the max earnings would be $125,400.

Plenty of New Yorkers in positions of power live in these so-called "low-income co-ops," including, as The Post reported last week, city Housing Commissioner Margarita Lopez and city Councilwoman Rosie Mendez.

The program, which advocates say makes home ownership possible for thousands of New Yorkers, is rife with abuse.

A building at 141 Attorney St. is a case in point, says its former manager. The city sold the former tenement for $5,000 -- $250 a pop for 20 units -- to the tenants in 1997 with the intention that it operate "solely as a housing project for persons or families of low income," according to the contract the city filed with the deed.

But lately, tenants have been flipping the apartments at market prices, alleges the building's former manager, Roberto Caballero. City oversight of low-income co-ops was virtually non-existent until recent years.


Anonymous said...

I am a family of four and make less than $120K per year. Do I qualify? I would love to sell my house in Queens for $650,000 and buy a Manhattan apartment for $40,000.

Anonymous said...

You may buy them cheap but you have high maintenance and no return on your investment. After you spend on renovations, i.e., update kitchen and bathroom, floors you only get back what you paid to buy. The City is the oversight agency and makes sure your maintenance will keep going up with unnecessary contracting. Renters do not get 50 percent increases over six years. Your $650,000 house 20 years ago cost about $200,000. It is better to put your money in a house where you are in control and can make a profit. The only ones who make out in these cheap coop's is the contractors

Anonymous said...

-Your $650,000 house 20 years ago cost about $200,000.-

Yeah, at the peak of the madness but not anymore, and not for a long time to come.

You parents who bought in the 1950s -early 70s made the killing. Those who bought during the 80s-90s may see very modest profit when you subtract taxes, insurance, mortgage,maintenance,repairs, anything I left out?

Those who bought in the last 8 years...the shaft.