Building types in Manhattan
Mitchell-Lama co-ops in Manhattan
Manhattan’s Mitchell-Lama co-ops run from Chelsea to the Lower East Side to Harlem and Roosevelt Island, and several have voted on leaving the program.
What is different about buying a Mitchell-Lama co-op in Manhattan?
Quick Answer
A Manhattan Mitchell-Lama apartment is not bought on the open market. Units are offered from the development’s waiting list at a formula price set under the program, income limits apply, and the supervising agency, either the City or the State, approves the transfer rather than a conventional board.
Which co-op buildings of this kind are actually in Manhattan?
- Large limited-profit developments in Chelsea, on the Lower East Side, in Harlem and on Roosevelt Island
- Developments supervised by the City through the Department of Housing Preservation and Development, and others supervised by the State
- Several developments where shareholders have debated or voted on leaving the program, which would change resale entirely
- Buildings whose carrying charges are set by the supervising agency rather than by the board alone
What do board approval and financing look like in Manhattan?
- Apartments are offered from an internal or open waiting list, so the ordinary contract and board-package sequence does not apply in the usual way
- The purchase price is a formula figure under the program rather than a negotiated market price
- Income limits apply at purchase and there are surcharges for shareholders whose income later exceeds the limit
- Financing is available but the lender is lending against a regulated resale price, which caps the collateral
Which taxes and recording steps apply in Manhattan?
- No mortgage recording tax and no ACRIS instrument for the purchase, the same as any co-op
- New York State transfer tax and the New York City real property transfer tax apply to the transfer
- The development pays a reduced tax computed on its shelter rent or carrying charges rather than on assessed value, which is part of why carrying charges here are set with the supervising agency rather than by the market
- The mansion tax is not reached, because the formula price sits far below the surrounding Manhattan market
What pattern does a purchaser meet in Manhattan?
- The gap between the formula price and the surrounding Manhattan market is the largest of any borough, which is exactly why privatization votes come up here
- A privatization vote is the single question a purchaser should ask about, because it changes the asset from a regulated one into a market one
- Waiting lists open and close, and a list that is closed is closed regardless of a purchaser’s readiness
- Whether the development is supervised by the City or by the State decides which rules, forms and appeal route apply
Can you buy a Manhattan Mitchell-Lama on the open market?
Not while the development remains in the program. Apartments are offered from the waiting list at a formula price, with income limits applied at purchase. A listing that appears to offer one at a market price is either a development that has already left the program or something to look at very carefully.
What does privatization do to a Mitchell-Lama co-op?
It converts a regulated apartment into a market one. Shareholders vote, the development buys out its program mortgage, and resale moves to market price subject to whatever flip tax the reconstituted corporation adopts. It also ends the income limits and the agency supervision, which is why the vote is contested.
What else should you read before closing on one of these?
In the glossary
- Maintenance (co-op)The monthly charge a co-op levies on each shareholder, covering building operations plus that shareholder's share of real estate taxes and the unde...
- Flip taxA transfer fee charged by a co-op or, less often, a condominium when a unit changes hands. It is a creature of the building's governing documents, ...
- Proprietary leaseThe occupancy lease a co-op corporation grants a shareholder for a specific unit. It is assigned at closing together with the stock certificate for...
- Co-op lien searchThe search performed on a co-op purchase covering UCC filings, judgments, liens and unpaid building charges tied to the shares and to the selling s...
- Stock certificate (co-op)The certificate evidencing the shares allocated to a co-op apartment. Shares and the proprietary lease travel together and cannot be sold separatel...
Questions this raises
- What are HDFC co-op income caps?HDFC co-ops cap purchaser household income under the Private Housing Finance Law, against an area median income ceiling. How the cap is measured an...
- Who pays the flip tax in a New York co-op sale?A flip tax usually comes off the seller’s proceeds, but plenty of New York buildings shift it to the purchaser. Why the rider has to name the payin...
Building types
- Mitchell-Lama co-opA limited-equity cooperative in the State and City Mitchell-Lama program, sold from a waiting list at a formula price rather than on the open market.
- Standard co-opThe ordinary New York City cooperative: you buy shares in a corporation and receive a proprietary lease to occupy a specific apartment.
- HDFC co-opAn affordable cooperative formed under Article XI of the Private Housing Finance Law, with an income cap on purchasers and a flip tax that runs to ...
- Land-lease co-opA cooperative that owns its building but leases the ground beneath it from a separate landowner, on a lease with a reset schedule and an expiry date.
This building type, borough by borough
- Mitchell-Lama co-ops in BrooklynBrooklyn’s Mitchell-Lama co-ops cluster along the southern shore near Coney Island and Brighton Beach, and several of them have already left the pr...
- Mitchell-Lama co-ops in QueensQueens carries several of the largest Mitchell-Lama cooperatives in the city, including developments in Jamaica, Woodside and Astoria that between ...
- Mitchell-Lama co-ops in the BronxThe Bronx holds the largest cooperative development in the country, along with other limited-profit developments, and it remains in the Mitchell-La...
- Standard co-ops in ManhattanManhattan is the borough where cooperatives still outnumber condominiums, so board practice, financing caps and post-closing liquidity requirements...
- HDFC co-ops in ManhattanManhattan’s HDFC stock came out of the City taking title to abandoned buildings north of 96th Street and on the Lower East Side, then selling them ...
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