White-Glove Co-ops Are Finally Loosening Their Rules
The co-op board at 730 Park Ave. now allows 50% financing and extended renovation times.
Oct. 10, 2022 — Rules on down payments and renovations are two of the market-driven changes.
Faced with disappointing resale prices and prolonged competition from luxury condos, the city’s high-end co-ops, longtime bastions of exclusivity and wealth, are opening their doors, if only by a crack, to let in a new breed of buyer, Bloomberg reports.
This summer, brokers say, the formidable 730 Park Ave. began allowing buyers to finance 50% of their purchase and extended its summer work period to mid-March through mid-September. Nearby 953 Fifth Ave., a slender 14-story building overlooking Central Park, has ramped-up financing to 60%; 11 East 86th St., half a block from the park, also changed its rules in the past year, from 50% financing to 65%.
Rumblings of the discontent that led to this breaking point can be traced to the 1990s, when New York’s new rich considered previously unheard-of locations like Tribeca and Soho—far from the co-op’s spiritual home on the Upper East Side. Change accelerated in 2008 with the opening of 15 Central Park West, a condominium designed by Robert A.M. Stern Architects that looked like a co-op — the marble lobby, the liveried doormen — but didn’t have any of the restrictions, including an all-powerful co-op board.
More followed, and roughly a decade ago luxury condominiums, long considered the co-op’s tawdry cousin, became an acceptable alternative. In 2010 the average sale price for a four bedroom-plus Manhattan co-op was $6.7 million, according to a report by Douglas Elliman. By the end of the decade, it had slipped to $5.5 million. The average price of a comparable condo in 2010 was $7 million, but by 2019 it had shot up to $11.4 million.
Co-op boards responded by loosening rules on renovation, allowing apartments to function as pied-à-terres, and, most important, lowering down-payment restrictions to appeal to buyers who might be rich enough to purchase a $4 million apartment but not so wealthy they could simply plop down $4 million in cash. Some of those buyers preferred to put their cash into higher-yield investments.
“Buildings we never thought would consider financing or dropping summer work rules have done it,” says Serena Boardman, a senior global real estate adviser at Sotheby’s International Realty. “It’s been music to my ears. It broadens the potential pool so much.”