Recommended Reading

100 to 75 years ago:

The gist: There was always a right and wrong time, even back when, but when professionals enter the market is one indicator it is the time to…read on

The Price of Lamb July 1915

Why do you always laugh at the mention of a lamb? You know you do, but are you one yourself? You may not have proved that your biped formation is only a disguise, but before the year is out many a man will. Those unfamiliar with the fauna and flora of Central Park will in all probably agree with the definition of a lamb as a symbolic figure in religious decoration or a fool with money. But is Wall Street, the conventional pasture, the only one you know? The fool with money can find a fertile pasture in a church; and the symbolic decoration is as equally appropriate for Wall Street, as it is often used in other grave yards.

Click the image once to enlarge, twice for easy reading.

The co-operative investment…click the image once to enlarge, twice for easy reading.

Here’s an early Upper East Side cooperative co-ownership apartment house with modern condominium rules that’s being touted as a viable option for a “small” investor…a $12,000 “position” for an eight-room apartment with a $2,500 per year gross return.

The Chapin Co-Operative Apartments

Heretofore all co-operative apartments have been proposed upon such a basis that the individual has been required to invest a large amount of capital to secure an apartment and has been required in addition to pay an annual assessment.  Therefore, the investor with a small capital has been barred from participating in the benefits of such an organization.  The plan of the Chapin Apartments is especially designed to meet the needs of the investor of smaller income, and has been so carefully planned and arranged that an investment of twelve thousand dollars will secure the title to an apartment of eight rooms and two baths that will rent for twenty-five hundred dollars.  This is the first time in the development of apartments inNew Yorkthat it has been possible to offer the opportunity of purchasing a home in a neighborhood heretofore taken up by over expansive apartments.

Co-operative investments

The Real Deal, March 22
“UES Residents Ousted Due to Second Avenue Subway Construction”

The Metropolitan Transportation Authority has informed residents of a 12-unit building at 1873 Second Avenue, between 96th and 97th Streets, that they’ll have to vacate their apartments for 30 to 60 days due to construction of an air vent at an adjacent building for the Second Avenue subway. The M.T.A.’s letter to the tenants assures them that the agency will pay all their related expenses while work is done to reinforce the structurally weak building. An M.T.A. spokesman said that he hoped the work would begin in April.

The New York Observer, February 9, 2010
“Rich Guy Fight at the Essex House”

The Board of Standards and Appeals has ruled, for arcane legal reasons, that a solarium that blocks the Central Park view of Essex House condo owner Ernst Georg Hartner should not be torn down. Hartner, a Munich-based businessman, had sued to regain his view after the solarium, currently owned by banker Ira Saferstein, appeared on the ledge of the apartment building next door. If the ruling is allowed to stand, preservationists fear that a rash of such structures will sprout across city rooftops, transforming the New York skyline.

City Hall, March 1, 2010
“Landlords Look to Build Support for ‘Rent Freeze’ Bill in Wake of Stuy-Town Ruling”

A bill under consideration in the State Assembly would nullify a landmark court ruling last year that found that the owners of Stuyvesant Town and Peter Cooper Village had collected tax breaks while illegally converting rent-regulated apartments to market rate. If the bill is approved, landlords would be allowed to keep as many as 80,000 units at market rate by paying back the tax benefits. If it isn’t approved, building owners could be liable for hundreds of millions in rent overcharges, and many would be forced into foreclosure.

The New York Observer, February 2, 2010
“The Bell Tolls for Co-ops”

Governor Paterson wants to close the loophole that allows co-op owners to pay no taxes on the loans for their apartments, a move that would bring an annual $50 million into New York City’s coffers. While condo and house owners are taxed as much as 2.175 percent, co-op owners—who technically don’t own a piece of real estate—have not been taxed since the Koch Administration. The real-estate lobby, however, fears that the new tax will hurt the already fragile co-op market.

The Wall Street Journal Digital Network, January 1, 2010
“Five Key Housing Issues to Watch in 2010”

Rising mortgage rates and the uncertain future of Fannie Mae and Freddie Mac are two of a series of worrisome issues that threaten to undermine the housing market’s modest 2009 rally. The impending expiration of federal programs that fueled the comeback, such as an $8,000 tax credit, is at the root of the problem. Other matters that may keep homeowners awake at night include the slow start of the Obama administration’s loan-modification program and the coming wave of sharp increases in adjustable-rate mortgages.

smartmoney.com, January 14, 2010
“The Benefits of Missing the Global Party”

Tishman Speyer–BlackRock’s $5.4 billion Stuyvesant Town default has become a symbol of many things, among them the inability of world-class professional investors to recognize a bubble. The Government of Singapore Investment Corp., Norway’s Government Pension Fund, the China Investment Corporation, and Dubai World all bought properties at the height of the of U.S. real-estate market and lost hundreds of billions of dollars when the market collapsed. The catastrophe should serve as a warning of the next crash: experts predict an accelerating failure rate of commercial mortgage-backed securities in 2010.

The Wall Street Journal, February 19, 2010
“Brownstone Diary: The Mess We’re In”

Julia and Vijay Angwin, a professional couple, wanted to live on the Upper West Side but couldn’t afford to buy a three-bedroom co-op for $1.825 million. So they bought a dilapidated Harlem brownstone—a former rooming house—in need of a gut renovation, for the bargain price of $800,000 and hired a contractor willing to do the job for $350,000. Though the house will be worth $2 million when the renovations are complete, the Angwins wonder if they will survive the ordeal with their sanity intact.

The Cooperator, February 2010
“Home Sweet Office”

With mounting layoffs and improved computer technology, the number of New Yorkers working out of their homes has grown exponentially from the 90,580 who were doing so in 2000. But people planning to start a home business must consider both building rules and zoning regulations, which, for example, prohibit advertising agencies, barbershops, and day-care facilities. Even if regulations permit tenants to run a particular business out of their apartment, the bottom line is common sense—be considerate of neighbors, especially when it comes to noise and foot traffic.

The New York Observer, March 11
“The Co-Op Evangelist”

Sylvia Shapiro, 59, author of The New York Co-Op Bible, is writing a novel, High Rise Anxiety, based on her experiences as a co-op board president interacting with the “bipolar” residents of her building on East 9th Street and University Place. She thinks her neighbors personify co-op insanity because some saw her as a highly competent and honest president, while others saw her as inconsiderate, pushy, inexperienced, and heavy-handed. Shapiro, a litigator, bought her apartment for the insider price in 1991 when the building went co-op.

The Cooperator, January 2010
“Fraud Detection for Co-ops and Condos”

To prevent fraud in co-op and condo communities, boards must have a hands-on governing style, have a sound system of checks and balances to keep finances transparent, and be wary of one of the most common schemes—board members getting kickbacks from contractors. Some other precautions to take: never give a credit card to the super for expenses; have at least one board member countersign all checks; and do a yearly audit. Most important, always file charges if wrongdoing is discovered.

The New York Observer, March 9
“In the Shadow of the Boom”

IStar bank has sued for foreclosure on One Madison Park, the architecturally ambitious 60-story condo tower at 23rd Street and Madison Avenue, where such celebrities as Naomi Watts have reportedly purchased apartments. Only 12 of the building’s 90 condos are occupied. The tower is Ira Shapiro and Marc Jacobs’s first Manhattan project, and their firm, Slazer Enterprises, is the defendant in more than a dozen lawsuits; Jacobs and his wife, Rochelle, have also asked the Rockland County District Attorney’s Office to investigate Shapiro for fraud.

New York Post, January 21, 2010
“Square Feet: Midtown’s Madness Is Home Sweet Home for This Family”

Though most New Yorkers would never consider living in Times Square, over the past decade condo developers have been building in the area and selling their apartments to relocated businesspeople and out-of-towners who want a pied-a-terre. However, due to high prices, it took nearly three years for one project, the Platinum, on West 46th Street, to close on 90 percent of its units. Stephen and Pearl Caruso are the exception to the no-New-Yorkers rule—in 2006 they bought a two-bedroom condo at 1600 Broadway; Pearl contends it’s “convenient to everything.” Read the article

The New York Times, March 11
“The Going Gets Tougher”

Getting a mortgage remains an arduous, prolonged process for many buyers, even with good incomes, and in numerous cases seemingly secure financing evaporates between signing the contract and closing. Though banks have turned down people for missing one payment on a bill, the bigger problem is that buildings themselves don’t always qualify due to new Fannie Mae and Freddie Mac lending guidelines. A new I.R.S. regulation, for example, says that Fannie can’t acquire mortgages made in buildings where more than 20 percent of the square footage is commercial.


The Atlantic, January/February 2010
“Capitalist Fools”

In 2006 Tishman Speyer and BlackRock completed the most expensive real-estate deal in history, paying $5.4 billion for Stuyvesant Town and its 11,232 mostly rent-controlled apartments. Four years later, as falling asset prices emerged as a huge problem for landlords and their bankers, Stuyvesant Town was on the verge of becoming the biggest real-estate default in history—with many other similar loans threatening to go bad as well. Beyond saying “cheap money makes us all stupid,” there’s no easy way to explain such calamities.