People are waking up to advantages of city life
By Laura Bruce • Bankrate.com

When it's time to pack up and move not everyone heads for the 'burbs. The reinvigoration of America's major cities is luring plenty of people to the apartment/condo life.

There have, historically, been two groups of people who opt to live in the city, according to John Griffin, president of the New York-based Griffin Realty Group. Those groups include singles or people just out of college and empty nesters -- people who are in their last job or are at the top of their careers, their kids are grown and they want to have a good time living in the city.

But a new group is being added to the mix -- families with school-age children are now willing to pay a premium to live in cities.

"If you have two working parents, the commute is a killer and they want to be close to their home -- 10 or 15 minutes on the subway vs. an hour drive or better to the suburbs," says Griffin.

Another advantage is the wealth of cultural assets available in most cities.

"The suburbs are stifling," Griffin sniffs. "The trade-off is kids aren't running out into the backyard; they have to go to Central Park. Jackie O was the one who made it popular. She raised her kids on Fifth Avenue, they played in Central Park."

What price for city living?
The price for this lifestyle can be steep, especially if parents want to send their kids to private school. Private grammar schools in Manhattan, for instance, can run $20,000 to $25,000 for one year. Griffin says couples who want to go that route should have a dual income of at least $300,000.

Obviously, not everyone who lives in a major city, even New York, is making $300,000 or even six figures. But where there's a will there's a way. The first thing prospective city-dwellers need to consider is the type of housing that's available. In most cities you'll find apartments, condominiums and, in some areas, co-ops.

A condo is essentially a single-family house. You get the deed and own it outright. Griffin refers to condos as "80 or 90 single-family houses stacked on top of each other." They tend to be smaller than co-ops and usually there's no board approval for ownership. There may be a condo association, but its ability to approve or disapprove an application is limited.

In a co-op you don't directly own the unit. You own shares in the corporation that owns the building -- you cooperate in ownership with the other shareholders. Co-ops can be very restrictive; people need board approval to become residents. Co-ops can be arbitrary in terms of who is approved but they can't discriminate based on race, sex or religion. Co-ops often require that prospective residents have a net worth that's five to 10 times the value of the apartment.

Things to consider
As with any property, location is the key. Make sure your prospective home has access to public transportation, shopping and, of course, is close to work. Another thing to check before buying or renting is the soundproofing of the unit. Try visiting the unit at night when neighbors are more likely to be home with TVs and stereos on.

"You don't want to hear everything that happens in your neighbor's apartment," says Mary Lou Belmont, vice president of national operations at GMAC in Liberty Corner, N.J. "Some newer buildings aren't as soundproof as some older ones. Get references, talk to the people who live there -- talk to people coming and going from the building -- ask what they're happy about and what they don't like. Ask how well the building is maintained and if something goes wrong, how long does management take to fix it?"

If the management or association has an office on the premises, visit them. Ask how many units are owner-occupied units vs. leased to renters. Some mortgage companies may balk when it comes to buildings that are predominately occupied by renters.

It's also a smart move to see if the co-op board, condo association or management company is being sued -- or suing someone else.

As for which type of property is more valuable when it comes time to sell, generally speaking, a condo will go for a higher price than a co-op of similar size, location, etc. That's simply because most owners don't want the hassle of getting board approval for a potential buyer.

-- Posted: July 1, 2003