Chicago Cooperator Winter 2019

Winter 2019
CHICAGOCOOPERATOR.COM
Some lucky Chicagoland residents can
come home from work on a bitter winter’s
night and warm their feet by a roaring fire
while drinking a hot toddy. A working fire-
place is a coveted amenity for many, adding
a dash of vintage charm to prewar apart-
ments or a touch of luxury in sleek newer
buildings. But hot toddies aside, maintain-
ing a fireplace in your apartment is no small
task. From regular cleaning to proper vent-
ing, taking care of a working fireplace is a
serious responsibility—and crucial for the
safety of both people and property.
Maintaining a Relic
While fireplaces may be considered a
nice touch today, at one time they were nec-
essary components in every home, warm-
ing the house and providing a place to cook.
But that was a century-and-a-half ago.
Today, wood-burning fireplaces are most
commonly found in converted row houses
built in the second half of the 19th century
and in upper-floor and penthouse apart-
ments in prewar luxury buildings, while
newer construction generally features gas-
powered or electric hearths. They are also
very common in townhouses, reports Da-
vid Levy of Sterling Management Services
located in Holliston, Massachusetts. There
may even be multiple fireplaces in one unit.
John White is the sales manager of Billy
Sweet Chimney Sweeps, located in Boston
and serving Boston, the North Shore, and
Portland, Maine. “Maintenance require-
ments for a fireplace in an apartment build-
ing are no different than for a single-family
home,” he says. “Solid fuel fireplaces should
be swept and inspected once a year. That
recommendation is made by CSIA, Chim-
neysweep Safety Institute of America. They
continued on page 9
In markets throughout the nation, 2019 was a year of uncertainty, reflecting change in
the basic mechanisms of how we view, buy, and sell real estate. That uncertainty extended
to all markets, from traditional single-family homes to co-ops and condominiums, to
commercial properties—and the same factors that affected markets in 2019 are expected
to continue to reverberate in 2020.
Taxes, Real Estate, and…Taxes
When it comes to home ownership, the conventional wisdom of economists (and the
government policy that followed it after World War II) held that appreciation of real estate
as the primary asset of middle-class families was the most successful and secure way to
build wealth and insure a comfortable retirement—particularly when combined with So-
cial Security retirement benefits. As a result, and to encourage home purchases and long-
term ownership, government at all levels offered benefits to families in the form of tax de-
ductions. The federal government enshrined that approach by providing a deduction for
state and local income and real estate taxes against income in federal income tax filings.
Over the decades since the mid-20th century, the evolution of deductible taxes has
developed in two main directions, sometimes simultaneously. Some states and munici-
palities have enacted state and local income taxes, while others—especially at the local
level—have levied higher and higher real estate taxes to provide for superior schools and
other civil services. These state and local taxes (often abbreviated with the acronym SALT)
became an important consideration in home prices, as they had long-term effects on the
after-tax cost of home ownership. In most cases, these deductions made homes in high-tax
areas more affordable, after tax considerations were calculated in the cost of ownership.
The Tax Cuts & Jobs Act of 2017 changed that. While the new law increased the dollar
amount for a standard deduction by doubling it, the change also capped SALT deductions
No matter how well constructed and care-
fully maintained, no mechanical system lasts
forever—and that goes for elevator cabs and
equipment just as much as it applies to roofs
or boilers. At some point, your building’s
vertical transportation comes to the end of
its useful life, and the inconvenience of refur-
bishment and replacement becomes a reality
for residents. If you live on a lower floor—say
the first, second, or even the third story—the
inconvenience may not be too severe. If you
live in a building with multiple elevators, it’s
unlikely that more than one will be taken
out of service for upgrading at a time. But if
you live in a building with a single elevator
and reside above the first few floors, or if you
have trouble climbing stairs at all, let alone
carrying packages up or down, an elevator
upgrade can become a real nightmare.
“Single-elevator buildings are a chal-
lenge,” says Joe Caracoppa, an elevator con-
sultant with Sierra Consulting Group, a New
York City–based elevator consulting firm.
“The question is: how do you get the people
up and down for six to eight weeks while the
work is being done and completed? [The an-
swer] is usually walking up and down. When
the elevator is out, it’s out. It can’t be used
temporarily.” On the other hand, Caracoppa
continues, “Multi-elevator buildings are easy.
You always have another car—a freight car or
the other passenger elevator. But if it’s just a
single elevator, well, no one can use the eleva-
tor during the process, and it must be tested
by the city before it can be put back into op-
eration.”
Planning for the Inevitable
Jacqueline Duggin is a building man-
ager with Gumley-Haft, a Manhattan-based
residential property management firm. She
manages a seven-story single-elevator build-
ing on Manhattan’s East Side that recently
underwent a total refurbishment. The prop-
erty was built at the turn of the twentieth cen-
tury, and so is over 100 years old. The single
elevator required modernization and refur-
bishing. “The board really had to think a lot
about the project, and about this problem,”
Duggin says. “We had people in the building,
at $10,000 per year for a married couple filing jointly. That cap in-
creased the after-tax cost of home ownership, ultimately depress-
ing or even permanently decreasing values, and therefore prices.
The Reality
Jonathan Miller is the president of Miller-Samuel Inc., a real
estate appraisal and consulting firm located in New York. Miller is
a national expert on both commercial and residential markets and
publishes annual and quarterly reports for markets throughout the
United States including New York, Boston, southeast and western
2019-2020 Roundup
and Projection
The Year that Was, The Year to Come
BY COOPER SMITH
Fireplace Safety
and Maintenance
A Valuable Amenity Shouldn’t
Be a Liability
BY COOPER SMITH
Elevator
Refurbishment
Managing a Major Service
Disruption
BY A J SIDRANSKY
continued on page 10
continued on page 8
205 Lexington Avenue, NY, NY 10016 • CHANGE SERVICE REQUESTED