Factors driving up local building fees

• Inflation: As all consumers have noticed, inflation has risen since 2020. Between 2010 and 2020, annual inflation rates were at or below 2.1 percent, except in 2011. Since 2021, however, inflation rates have been above 4 percent, with 2022 reporting a high of 8.0 percent. High inflation has an effect on all goods, including building supplies, resulting in higher building fees.



• Building insurance: Like everything else, New Yorkers have always faced high home insurance costs. Since 2020, these costs have also spiked (individual owners are paying, on average, $1068 more annually than they were in 2020). But if you live in a coop or condo, in addition to the insurance you pay on your unit, you’re paying insurance for the building, even if the cost is bundled into other building fees. What is clear is that whether or not it is visible, rising building insurance is another factor that has driven fees up over the past five years.



• Utility costs: Since 2020, both gas and electricity prices have undergone significant hikes, resulting in spiked monthly fees for coop and condo owners. In 2024, the Water Board also passed an 8.5 percent increase, the largest jump since 2011. This jump, while not as significant as gas and electricity hikes, is expected to further drive up fees.



• Facade inspections and repairs: Since the city updated its facade law in 2019, all buildings over six stories must have a facade inspection once every five years. If repairs are required, they must be started within 90 days. The inspections, repairs, and, of course, the scaffolding (New York City now has over 300 miles of scaffolding wrapped around buildings due to mandatory facade repairs) cost tens of thousands of dollars per building. Naturally, these costs are passed along to the owners and shareholders.

• Local Law 97: In 2019, Local Law 97, which applies to most buildings over 25,000 square feet, was introduced in an effort to make New York City carbon neutral by 2050. While the city has offered support to help some buildings meet targets, coming into compliance is another factor currently edging up many local residential buildings’ fees.



• Property taxes: Like consumers, the city itself is also struggling to keep up with inflationary increases, as well as other growing demands, including the high cost of repairing its crumbling infrastructure. Taxes are the main way the city generates revenue, and as a result, local property taxes continue to rise, and this impacts lower owners’ fees.



• Demand for expanded building services: In some buildings, costs are also on the rise due to a growing demand for expanded building amenities and services. From luxury gyms and children’s playrooms to doggie baths and storage lockers, local tenants continue to look for increased amenities and services, but these conveniences come with a price tag. As local owners expect more in-house, fees also continue to rise.



• Building labor costs: As inflation has soared, building staff have also been struggling, and during their most recent negotiations, they leveraged the impact of inflation to negotiate a well-deserved salary increase. In most buildings, the cost of this increase has been or will be passed along to shareholders and owners, though most New Yorkers agree that if there is one thing worth paying more for, it is beloved building staff.

Will 2025 bring relief to local owners?