Inspection Inflation

Once again this year, the Department of Buildings has issued a bunch of new rules about facade inspections. Tell us briefly about those.

There are a lot of new rules to deal with in this cycle. You now have to do a scaffold drop every 60 feet on an exterior wall that fronts a public right-of-way. You have to do probes of cavity walls on every one of those drops. There are new regulations on reporting, testing, photo documentation and so forth. It's very stringent – and it’s warranted. I mean, the DOB is all doing this in the light of safety because of collapses and other problems we've had in the industry.

Will these new rules mean added costs for co-op and condo boards?

When we looked at this before the pandemic, we saw a problem. The cost of an average facade inspection for the engineer and scaffold team – that’s with no repair work – was about $8,000 to $12,000 back in the eighth cycle. Depending on the building, that cost can now be over $100,000 – just for doing the inspection and the filing of the report, without any work. And the chances are, if you're doing a lot of probing in cavity walls or it’s an older building, you’re probably going to be doing some work.

Is there anything a co-op or condo board can do to push back against these mounting rules?

Well, I will tell you that the people down at the DOB, they had a very good reason for instituting these new rules. The problem is, it came very late in the eighth cycle. So I was approached by 20 major real estate companies and about 150 buildings, asking me to put together some type of plan that I would recommend that the DOB consider. And the DOB has just responded – by offering amnesty to any building that failed to file a facade inspection report in the eighth cycle. Those buildings can now file a report from July 1 to Sept. 30 of this year, and the DOB can extend the amnesty at its own discretion.

So that will give some boards a little bit of breathing room as we come out of the pandemic.

Right. And remember, that's not the only thing boards are dealing with. The rules are so much more stringent, and there is so much more cost involved. There’s gas pressurization testing, the Climate Mobilization Act, mandatory elevator modernization. I could keep going. I hear people say, “Rich people live in co-ops and condominiums.” Well, you know what? I meet with these people every day, and they're people just like you and me. They have budgets. They're trying to comply with all these rules and regulations, but it's very expensive. With all of this coming at one time, I’m afraid we're going to go back to people walking away from buildings as they did back in the 1970s.