Federal Law Change Pays Dividends for NYC Co-Op Residents

Offsetting property taxes and maintenance fees, newly authorized market-rate ground floor retail provides a lucrative source of income for co-op owners in NYC.

Until recently, NYC co-ops were subject to a federal law requiring them to generate no more than 20 percent of their income from non-shareholder sources, such as potentially lucrative ground floor retail. Many artificially drove down prices at street level in order to retain the tax benefits that came with co-op designation. Some gave up retail spaces altogether to avoid the headache of being a landlord.

Now that the tide has turned and the 80-20 rule abolished, co-op apartments in prime real estate locations like SoHo and Madison Avenue have started returning dividends to their owners.

Helping to offset maintenance fees, the extra income is often reflected in initial asking prices that exceed market value by up to 20 percent, but the savings are worth it, say real estate experts.

Full Story: The treasure trove on the ground floor

Comments

building block set

NEW! Build the world you want to see

Irresistible block set for adults when placed on a coffee table or desk, and great fun for kids.
$25
Red necktie with map of Boston

For dads and grads: tie one on to celebrate your city!

Choose from over 20 styles imprinted with detailed city or transit maps.
$44.95

NEW! City Map Posters

Available in 9 different cities.
$25.00
Book cover of Unsprawl

Unsprawl: Remixing Spaces as Places

Explore visionary, controversial and ultimately successful strategies for building people-centered places.
Starting at $12.95