I’ve been meaning to do a series of blog posts on the state of townhouse sales so far in 2010 by neighborhood. Here’s the first in that series - covering the neighborhood that’s near and dear to us - Mount Morris Park…

Generally I find there are two groups of townhouses - 1) ones that need $500K+/- in renovations, and 2) ones that don’t (at least not right away).

On the high end…

The very first one, 226 Lenox was a bit of a special case - it’s probably at the high end of the ones needing around $500K in renovation. Among the others you can see the trend is generally up (slightly). The standard price seemed to be $1.65M (no matter what the size, oddly), but now that’s been broken and prices are just under $2M.

On the low end…

The first thing to notice is that this is still a great time to buy a townhouse shell in Harlem. There’s over a million dollar difference between the price of shells and the high end places, but you can renovate a shell into a high end townhouse for about $600-$800K, so you’re likely to net between $300K and $500K on the renovation.

Price per square foot is tricky with shells. Taking our place as an example - officially it’s 4 stories and 3605 sq. ft. However, in actuality it’s 5 stories and 4500 sq. ft. Oddly, I thought the number of stories would get fixed as we went through the DOB plan approval process, but I saw the plan examiner look right at the plans and call it a 4 story building. However, they are now billing it as having 4,500 sq. ft. - at least that much is getting corrected. What this means is as you look at townhouses you need to calculate the real square footage and determine your own price per square foot.

The bottom line is, like the upper end, there is an upward trend in prices for shells. Not counting the fully occupied SRO (which you wouldn’t want to touch with a 10′ pole unless you wanted to be a landlord, not a home owner), our place was pretty much the low price on a price per square foot basis at $117/sq. ft. The others since that time have been more money on a price per square foot basis (which is how you really need to price buildings like these). Assuming the recent ones are 4 story buildings misclassified as 3 story buildings - that means the actual price per square foot for shells is now in the mid-$140s.

A while back we discovered Eggersmann at the A&D building and really liked them. In fact we liked them better than Poliform which is saying a lot - our last kitchen was by Poliform and Poliform’s sense of design resonates with us, but Eggersman is even better (in our opinion). When we first talked to them Eggersmann was nice enough to mock up a kitchen for our space and quote us a price but the price didn’t really work with our budget.

Well, months passed and then someone at Eggersmann found my previous blog post mentioning them. They contacted us and asked if we had made a choice yet. Thanks to problems with DOB, we hadn’t. They noticed that I had mentioned that their last price was too high, and offered to design a lower cost kitchen. Our kitchen design and layout had changed somewhat since their last proposal. The biggest change was moving the coat closet further into the building - across from the stairs rather than across from the kitchen. The other change was getting rid of the upper cabinets and taking the cabinets at each end to the ceiling (which is 10.5′ tall). The net result was a 1/3rd savings in cost. We need to see where the other numbers come in, but we’re thinking we just might be able to afford an Eggersmann kitchen, which is quite exciting…

Dan and I had gone through several rounds of kitchen designs but hadn’t been 100% happy with anything we came up with. Many of the designs reminded us of our last kitchen and we really wanted this one to be different. Finally I proposed a layout one day and Dan liked it. That’s the layout Eggersmann laid out (and improved slightly). Here are some 3D renderings Eggersmann did for us…

Instead of having coat closets across from the kitchen, we’re going to have a bench where people can sit and talk. This will essentially be the view from the bench. The door to the right is the front door. The upper panels in that door will be glass. The column to the left will house a Sub Zero 736 TCI fridge. At over $6,000 it’s our one huge extravagance in the kitchen, but we loved the 700 TCI we had in our last kitchen… The shelves in the center island will be used for wine and cookbooks. Dog leashes and the like will go in the cabinets below.

This shows a few of the details more clearly. We’re envisioning Corian (white) counter tops, a stainless back splash. The range is a compromise. We’re going with a 30″ Electrolux when Dan would really love a 36″ Wolf, but it costs nearly $4,000 more. The range hood was one of our challenges. The shape of it will probably be a bit different than what you see, but luckily we can exhaust directly out the wall, so no chimney is needed. We’re also thinking of put lighting on the top of the shelf as well as the bottom so the wall isn’t so dark.

Seen from a different perspective… The wall to the right will be exposed brick, and the front doors will have glass in the top panels. The window looks huge as it is, but looking at it now I realize it wasn’t drawn big enough. It’s 4 feet wide, 7 1/2 feet tall, so it will be another foot higher (at least). It won’t be one huge piece of glass. Instead it will look a bit like a french door (two vertical casement windows).

This last one shows how we’re hiding the microwave in a nook with additional cabinets. Up by the ceiling, above the cabinets, will be the A/C. We’re going with a “mini-spit ductless” system and that location gives us a nice place to hide the unit. (Not going with concealed units is another budgetary concession). The large wall will be exposed brick, so while the cabinets will be white / off-white, there will be plenty of color and warmth in the kitchen.

The other thing I’ve realized looking at these renderings is that the radiator we were going to put under the window will conflict with opening the cabinets. Dan and I are debating where the radiator should go.

So we’re crossing our fingers hoping we can get the Eggersmann kitchen. It’ll be really wonderful. Their sense of design is really special and their fit and finish is incredible.

This past Monday we FINALLY got approval for our renovations from the NYC Department of Buildings. It was almost exactly a 5 month process - one month to get the first plan review and then a plan review every 2 to 4 weeks after that for 4 months. We got approved on the 5th plan review. This time we were tired of getting rejected and decided to go to the plan review this time to see what was happening. It was good we did because the plan examiner literally said “I’m only approving the plans because the owners are here”. Apparently the plan examiner and our expediter had gotten to the point where they really just didn’t like each other very much. Luckily for us his objections were minor this time and he was willing to overlook them. For example, our architect had spelled out all the R values in the wall, but didn’t show the calculation converting from R values to U values that were input into the energy calculations. And we hadn’t submitted a “street tree worksheet” to document the fact that we have a tree outside our building - that he put off ’till we pull permits.

Anyway, it’s over and we’re now on to getting a final bid from our contractor, and getting everything ready to apply for the mortgage. Hopefully, after all this, we’ll be able to afford the renovation we want to do. Knocking wood…

I know I’ve neglected the blog lately, but the last 3 months have felt like purgatory. We were just sitting and waiting. Honestly, I didn’t want to focus on it too much because it would have just been frustrating. It’s a good thing we weren’t buying the building with a rehab loan. If we had closing would have had to wait until all of this was done. As it is the house isn’t costing us that much to maintain right now - just taxes and paying a guy to keep it clean so we don’t get violations.

The benefit of the wait was that our architect had time to do more detail drawings which will help clarify things with the contractor. And the biggest change was that we decided to swap the floor plans for two floors. We’re going to have the home office one flight up from parlor and the master bedroom two flights up from parlor (instead of the other way around). It should result in less stair climbing and we get a laundry shoot in the master bedroom, which will be nice. When we get the electronic versions of the approved plans I’ll post them here.

In the future one or both of us with go with our expediter when he needs to get changes approved at DOB. Lesson learned. 

Well, today was plan review day and we got rejected, AGAIN. The reasons this time were just bizarre…

The first thing that was rejected was the energy review. Our architect did this complex analysis using a web-based program provided by the federal government where you enter all the characteristics of the building including wall types, window types, light fixtures, etc. and it confirms compliance with the 2010 standards that are in effect for New York State. But the plan examiner rejected it because NYC is still on 2007 energy standards and the 2010 standards aren’t being phased in until later this year. They literally told us to come back in 24 days, on July 1, since they’ll accept our architect’s energy analysis on that date. So we got rejected for showing compliance with a more demanding standard that they’re going to use in less than a month. Go figure.

Second major item was the sprinkler system (again). This time the plan examiner wanted documentation that there was sufficient pressure in the water main to support the sprinklers being on the domestic water supply despite the fact that the code specifically states that sprinkler systems with 30 or fewer heads can feed off the domestic water supply. He also wanted all the pipe sizes and sprinkler heads specified, but that’s typically done when the sprinkler system is certified - it doesn’t need to be done at this point and requiring it now is just being difficult.

The biggest issue that he raised is that he’s insisting we do a pressure test on the water main to do the calculations to determine the sizes of pipes that are required for the sprinkler system. It takes 4 to 6 weeks to get DEP to do a flow test, so that means we can’t go in for a plan review until that’s done. Again, the flow test is typically done after DOB approves the overall plan - he’s just being obstructionist IMHO.

At one point the plan examiner insisted that we needed 2 hour fire rated walls around the stairwell, not 1 hour walls. Our expediter stuck to his guns and then it took the plan examiner 10 minutes of searching the code to realize we were right and he was wrong. Why do they have people doing plan exams who don’t know the code? If the code is just horribly complicated then why not have plan examiners specialize in certain building types? If we had someone who really knew the code issues for townhouses then maybe they’d know the code well enough to do their job properly.

Then the plan examiner was telling our expediter that he saw errors in the “I-Cards” for the building. I-Cards were the predecessor to Certificates of Occupancy, which came out in 1938. So in other words, he was holding us responsible for errors previous building owners made dating back to 1938 or before. I mean please… The whole point of our rehabbing the building is to bring it up to code and get a C of O. How can inaccuracies on the old I-Cards matter when the point of the exercise is to make them obsolete by getting a C of O?

Next time Dan and I will go to the plan review to prove the point that we’re not some nefarious slumlord trying to build a crappy substandard building. We’re just regular guys. Plus, with the enormous workload that DOB is under right now I just don’t understand how it’s productive for them to keep having us come back over and over again for stupid little things.

Now imagine if we were trying to purchase the place with a rehab loan and needed to get approved plans to close the loan. Obstructions like this can really hamper redevelopment of blighted buildings - for no good reason because they can tank deals. And it’s the reason why it can take FOREVER to close when the buyer needs financing to purchase. I’m sure more than a few deals have gone bad because DOB took too long and the contracts expired.

A new building code went into effect about 2 years ago now. Generally the changes were aimed at larger buildings, but a few things affect townhouses.

As I was writing up this post I got a call that our plans were not approved (for the 2nd time) and the issues were largely due to changes in the 2008 code. (Today is definitely a day when it feels like we’re ‘beating upwind’…)

Sprinklers

Possibly the biggest change in terms of expense is that most townhouses now require a full sprinkler system. Apparently the new code conflicts itself - part of it says 1 and 2 family homes require sprinklers, another part says they can be exempt. At one point I found the FDNY’s ruling that said that if the townhouse was being restored back to it’s original 1 or 2 family use then sprinklers were not required at all. However, once a DOB plan examiner says they want sprinklers (as in our case) there’s no way FDNY is going to overrule them and say they’re not necessary. Here are the part of the code that were cited by our plan examiner:

903.2.7 Group R. An automatic sprinkler system shall be installed in Group R fire areas. An automatic sprinkler system shall be installed throughout buildings with a main use or dominant occupancy of Group R.

Exception: An automatic sprinkler system shall not be required in detached one- and two-family dwellings and multiple single-family dwellings (town houses), provided that such structures are not more than three stories above grade plane in height and have separate means of egress.

Here’s a summary of the code in graphical format…

(Source)

So we’re now stuck having to put in a sprinkler system. I’m not sure why, but our architect and his expediter were reading the code only the egress had to be sprinklered so he drew up sprinklers on every stair landing and between the stairs and the front door using “water walls” between the stairs/corridor and the kitchen and the living room. But as I was writing this I got a call saying the plan examiner wants the entire building sprinklered (which is consistent with the part of the code he cited). That could be cost prohibitive for us - so it’s potentially very bad news…

The reason why any sprinkler system is so expensive is because sprinklers have to plumbed with cast iron pipe. Copper melts in a fire. The problem is our connection to the water main may not be big enough to support the demand put on it by the sprinklers. So that means we may have to upgrade our connection to the water main or get a dedicated connection to the main for the sprinkler system. That’s major money because it requires tearing up the sidewalk and touching the water main for the street.

We need to get estimates, but the sprinkler system the DOB plan examiner wants will cost WELL over $100K. Now we have to figure out what can be cut so we can afford the sprinkler system. So we’ve hit a pretty major roadblock.

Smoke Detectors

A more minor point is that all smoke detectors in the building now have to be interconnected - so if one goes off they all go off (great fun when what you’re looking gets a bit smokey).

Egress Stairs

Another change is that the 2008 code now requires that the stairwell continue up to the roof. Typically the way townhouses were built was to have a hatch going up to the roof. Now you need a bulkhead with  a full 3′ wide staircase and a door.

27-375(i) (1)(b) - “Buildings exceeding three stories in height shall be provided with one stairway at least three feet in width enclosed in fire-retarding partitions with a fire resistive rating of one hour protected by FPSC doors leading directly to the street and to the roof bulkhead.”

That’s less of an expense than a sprinkler system, but if you’ve got original staircases the question is how to match the style of the current stairs on the staircase going up to the roof. And what happens if you’re staircases aren’t a full 3′ wide? That could be a bit costly - or you’ll have a different type of staircase going the last flight.

There is one good thing about requiring bulkheads - if you put south facing windows in the bulkhead it’s better than having a skylight. The problem with skylights is that they don’t capture much of the low winter light (when you want as much light and heat gain as possible) and they capture too much of the high summer sun - making the building hot and increasing your air conditioning bills. Bulkhead windows get the maximum amount of winter sun and heat (lowering your heating bills) and capture less sun and heat in the summer (lowering your air conditioning bills).

Energy Considerations

Another frustration that relates to the 2008 code is that the plan examiner wants a crazy amount of detail on the energy usage of the building. The code is pretty clear that there are multiple ways to prove energy efficiency. Our architect did one of those ways (using a goverment program that calculates energy efficiency), but the plan examiner said that wasn’t good enough. He wants details on every window, exterior door, and light fixture.

If Your Buying A Townhouse…

If you’re in the process of building a townhouse that needs a lot of work (or already own one) - realize the 2008 code will impact you greatly, as it’s affecting us. The townhouses you may be seeing that are renovated were typically renovated under the old, 1968, building code. You have to meet  a much more demanding standard now.

If you can find a townhouse that has plans that were approved under the old building code then you can use those plans provided the permits have been kept current. But if the permits expired make the current get them renewed before you purchase the property. But realize you’ll be able to make minor changes to those plans. Talk to an architect and an expediter to make sure you can build under those plans. If the owner can’t get the plans renewed, lower your bid price substantially to compensate yourself for having to meet 2008 code.

If you’re buying a townhouse without approved plans (the norm) make sure you overestimate your renovation costs to compensate for things like full sprinkler systems. It can get expensive to meet 2008 code.