The Mess In Our Back Yard

Posted on May 17, 2011 by BeatingUpwind

We knew our back yard was a bit of a mess. It was clear that when they were renovating the building adjacent to ours that they had just dumped a bunch of garbage in our back yard. We figured there was about a foot of garbage back there…

On top of that when a friend of ours (who does gardening for a living) saw the garden he said the plants that were going in it were rather insidious – that we should kill them with RoundUp and then put black plastic over the entire garden for a summer to try to kill them.

There’s so little in our place there aren’t many surprises, but it seems like every time there could be a surprise we’ve got one. The back yard isn’t going the way we thought it would… They’ve started removing the garbage – and surprise! There’s concrete under everything…

You can’t quite tell, but the retaining wall on the side has about 2 1/2 cinder blocks in it – so it’s about 20″ high (plus the cap stone). And most of the “debris” is actually mostly dirt and rocks. I still don’t know how we have so many river rocks in the middle of Harlem, but there they are.

Our plans just call for removing the debris. It doesn’t mention anything about removing concrete – so we’ll have to work that out with the contractor since we don’t want a concrete back yard! That said, we don’t have to worry about insidious plants growing in a concrete back yard…

The other question is how do we integrate those huge rocks into our landscape design? I was really thinking of going a different direction… But we’ll figure something out. Dan says we should look at Japanese garden designs.

A Frustating Day @ The Dept. Of Buildings

Posted on May 17, 2011 by BeatingUpwind

The Post Approval Amendment Meeting

Yesterday we went to the Department of Buildings for a Post Approval Amendment (PAA) meeting. PAAs are how you get changes approved after you have approved plans. Long story short – we were denied because a measurement was missing…

We had a few minor items, but the two big things were 1) changing the shape of the bulkhead and 2) taking exhaust pipes up and through the roof rather than exhausting them through the sidewall.

First a thanks to architect Peter Holtzman for warning us that, even though the plan examiner had stamped plans that included exhausts through the sidewall, they were a potential source of (expensive) problems when it came to C of O inspection. You can intake air across a property line, but you can’t exhaust air over a property line. Good catch – everyone (including the plan examiner) had missed that.

The other major change was to change the shape of the bulkhead. We started out with a smaller bulkhead that looked like this…

Elevation of small bulkhead

So one glass door and two windows with a 3′ walkway to the side for easy access to the front part of the roof. In plan view that looked like this…

Plan view of small bulkhead

As the plan examiner was stamping the plans he saw a problem and told us he’d continue stamping but we needed to come back to get it fixed. Even though 3 feet is sufficient inside a building for a hallway, according to zoning regulations that’s a “side yard” and side yards have to be a minimum of 8 feet wide. He said our two options were to reduce the size of the bulkhead and get 8 feet of “side yard” or extend it all the way across the building and have a ladder up and over the bulkhead for firemen.

So the next rendition looked like this…

Elevation showing bulkhead all the way across a townhouse

So we just put in an extra window. In plan it looked like this…

Plan view of wide bulkhead on townhouse

Then one day I was sitting there and realized the ceiling on the top floor was so tall we might not have enough steps between the top floor and the roof deck. (Turns out we were 5 steps short!) So now the plan looks like this…

That means the door has been switched to the other side and there’s an extra run of stairs.

[If you’re really detail oriented you’ll wonder how we’re draining the front roof. There will be a pipe running through the bulkhead wall from the front roof to the back roof. The one error in the plan above is that the cricket needs to change and the pipe location switched to the other wall.]

Getting back to the plan examination.. The examiner said that now that it was going all the way across the building it was no longer a bulkhead – it was “something else” – though he didn’t say what. I suppose it’s now a cathedral ceiling. I believe bulkheads are exempt from building height restrictions but “something else” isn’t. Our architect had dimensioned the height of each floor and the roof but hadn’t dimensioned the height at the top of the bulkhead. The plan examiner said were were limited to 60 feet (off the sidewalk) and so he refused to stamp the plans because the height of the bulkhead off the street wasn’t specified.

The height of 60 feet comes from the fact that buildings in residential areas that are less than 45 feet in width are limited 100 feet or the width of the street, whichever is less. (Buildings taller than that are considered “sliver buildings”). Our street is 60 feet wide, so we’re limited to 60 feet in height.

I did the calculations when I got home and we’re at 60′ 4 1/2″. The plan examiner said he didn’t mind if we went 6″ over, but just to be safe I think we should modify a couple things to get closer to 60 feet.

Trying To Clear Violations

When the PAA meeting was over we decided we’d try to clear some violations. We had gotten two complaints, two violations, and a stop work order back in January. At the time, after a lot of investigation, an expediter had told us we got the violations because we had two Alt-1s open at the same time.

We hunted around to figure out where to ask a question. Then we waited on line for 20 minutes. And we showed our paperwork to the clerk in the construction division who took it and said it would need to be reviewed by the chief and that we should wait. Well, we waited and were then told that the letter only applied to one of the two violations. A day later that violation still hasn’t been cleared… Hopefully it will get cleared.

After some confused and frustrated questions we went down to the deputy boro commissioner’s office to ask questions since it was his letter that we thought was supposed to clear things up. More questions, more confusion and then someone finally explained what was really happening. Our stop work order wasn’t because we had two Alt-1s open at the same time – it was because the engineer who was on the old plans from the previous owner had filed paperwork to get his name off the jobs. Since the jobs were active, that resulted in a stop work order.

All the information was on the paperwork, but you had to know the lingo to understand it. I know I didn’t understand it when I saw it the first 10(+) times I looked at it. And the expediter apparently didn’t understand the lingo either.

We have another PAA appointment on Monday. Hopefully we can clear up everything at that point.

More Incremental Progress

Posted on May 15, 2011 by BeatingUpwind

A number of things are progressing at the building…

They’ve put orange plastic netting in front of the windows so no one can fall out (good idea).

Windows with orange safety netting

Have I mentioned previously that we’re very happy that the wall supporting the cornice is in great shape? Apparently the cornice wall is the reason why a lot of cornices have to be ripped down. If the wall is bad, the cornice has to go. Having a good cornice wall drastically ups the chances of being able to just repair and keep our cornice.

They’re starting to frame the interior walls…

Framing for walls in place

Now that the plumbing is done in the cellar, they’re pouring the concrete floor. Technically pouring the floor is a “repair” since there was an old floor that was in poor condition.

Concrete floor in townhouse cellar

[Like the stick figure graffiti?]

The critical project at the moment is to raise the parapet walls 15″ to comply with current fire code.

Harlem townhouse parapet wall

That’s delaying building the bulkhead (since parts of the bulkhead rest on the parapet) and the delay with the bulkhead is delaying ordering windows (since we have to measure the bulkhead for the window order). And of course the house can’t be properly closed up until the windows are in…

The historic preservation folks aren’t happy about raising the parapet walls since it amounts to altering the structure of the building. But fire code trumps historic preservation, so they just have to accept it.

Speaking of things that can’t get done before other things… The big problem right now is that ConEd won’t re-establish gas and electrical service until after we re-establish water service. Apparently getting the water service reconnected is a huge hassle since we have to go through DEP. The water main subcontractor is trying to find loopholes to make the process faster. We were hoping the current connection would work, but only a tickle of water came out when they opened the valve. And yes, DEP does send you a water bill even when your property has no water service.

Also water related… the architect and the sprinkler engineer are trying to figure out the proper number of sprinkler heads in the building. We’re very close to the limit of 30 heads above which a second connection to the water main is required.

We did have one victory on the bureaucratic front… We finally got the previous owner’s old job for demolition closed out. They should have taken care of it years ago, but they didn’t. Notice the “X Signed Off” in the screenshot below…

Demolition job signed off

That’s one of those things that has to happen before we can get our C of O. But more importantly we were in a race against time on it since the old owner’s engineer had filed papers to get his name off the job. That could have potentially resulted in a(nother) stop work order.

So lots of little stuff is happening…

Lower Mortgage Limits Coming September 30

Posted on May 11, 2011 by BeatingUpwind

MAJOR CORRECTION: I’m going to sticky this post for a few days. Max loans aren’t going down nearly as much as I thought they were. So the situation isn’t all that dire. It’s worse, but not all that much worse… Essentially the limits on conforming loans are going down just 15% after September 30. I’ve stricken the parts that were wrong, and put corrections in italics.

The big news today was that it seems there’s bipartisan support for lowering the loan limits for Fannie and Freddie in high cost areas like New York. Assuming it happens, it could have a rather profound effect on places like New York – and it will particularly affect Harlem townhouse shells where many of us depend on the higher loan limits to make the numbers work and the banks avoid the risk of renovation loans.

Right now in NYC, you can borrow up to $729,750 for a 1 family home without having to get a “jumbo” mortgage – that will drop to $417,000 $625,500. For a 2 family you can currently borrow up to $934,200 – that will drop to $533,850 $800,775. For a 3 family you can currently borrow $1,129,250, but that will drop to $645,300 $967,950. (And so on…)

What that means is that fewer people will be able to buy townhouses since they won’t be able to qualify for federally insured mortgages that cover enough of the costs. They will have to try to get mortgages from banks that will require much larger down payments, higher incomes, and overall much less risk for the banks. There already is no such thing as a jumbo renovation loan – so renovation loans will really dry up are less likely to cover the cost of renovation come this fall. Somewhat less demand means real estate prices will could drop slightly (because of this). Properties like shells that are particularly risky will probably see the biggest drops are the most likely to be affected.

This is major will have real effects on Harlem townhouses…

Those of us who have already bought will could see the prices of our homes drop in value since there will be less competition among buyers slightly fewer buyers will be able to get the size of loans they need.

People who are buying will find it somewhat harder to get mortgages that cover all the expenses. A lot of people just won’t qualify. We wouldn’t qualify be able to do the renovation we want to do under the new rules. It doesn’t mean the buyers can’t afford the homes. Our place will actually be quite affordable once it’s all done. It’s just that the renovation process is a risk no bank wants to take on.

My advice to people who own shells that are on the market is SELL NOW! realize after September 30 the value of your place may go down even further. If you’re holding that property after September 30, you’re probably going to hold it for quite a while into the future and it will sell for substantially less money. Now is not the time to be greedy.

If you own a shell and haven’t closed on your rehab mortgage – do everything what you can to close the mortgage before September 30 – otherwise you may not be able to do as nice of a renovation.

If you’re in the market for a shell – that’s a tough one… After September 30 you may not be able to afford a townhouse at all. But closing on a rehab mortgage takes time. You need approved plans (which can take months to get), you need a contractor who’s ready to start, etc. And on top of it all it’s possible the place you buy could drop in value shortly after you buy it.

The same goes for renovated townhouses, but to a lesser degree – the situation won’t be quite as dire for livable places Renovated townhouse may not feel the hit much at all since jumbo mortgages will be available for them (just a little harder to get).

After September 30 cash will continue to be king (even more than it is now). You’ll need a large down payment PLUS pretty substantial income. It’s sorta sad really. The current crop of homeowners who are buying and renovating shells are often pretty regular Joes… A lot of them will just be priced out of the market.

I feel fortunate that we bought when we did and got our loan closed when we did. Yes, our place will most likely go down in value, but renovated places will fair better than shells since banks will be still be lending on regular, non-rehab mortgages. We’ve always taken a long-range view of the townhouse purchase. It will still be affordable for us after we get done. And I’m not sure any of this will matter in 15 or 20 years and we have every intention of living in our place for that long…

Hopefully something will happen to derail the support for these changes. It’s being implemented all wrong… They should take everyone down slowly. They way they’re proposing will hurt places like California and New York and not change anything for middle America. Hopefully common sense will prevail and none of this will come to reality. But from the sounds of it, it’s a done deal.

The Importance Of The Right Contractor & Contract

Posted on May 8, 2011 by BeatingUpwind

Tomorrow we’re going to court (again). The contractor we used 6 (+/-) years ago to renovate the kitchen and bathrooms in our old coop is suing us. I’m not going to comment on the case until it’s over other than to say it’s a huge hassle but we feel very optimistic about the outcome. This blog post is more about the things we’ve learned to avoid hassle and drama with contractors.

First: Use A Standard AIA Constract

Back then our architect told us to use a standard AIA contract. We didn’t because we didn’t want to seem difficult. Thing is, good comprehensive contracts avoid problems. We shouldn’t have worried about what the contractor thought of us. We should have done what we needed to do to avoid problems down the road.

However, for our townhouse project we did use an AIA contract and having read the contract I can see why he told us to use it. For starters, AIA contracts keep you out of court. In the contract both parties agree to binding arbitration by someone who is approved to handle disputes related to AIA contracts. Arbitration would have been so much easier than what we’re going through.

AIA contracts also stipulate that when the owner and the contractor disagree the first line of arbitration is the architect. I’m not sure that would have avoided our current lawsuit, but it’s coming in handy on our current project – the architect is the voice of reason who balances the various points of view.

Second: Avoid Design/Build Firms

You can go one of two routes when you do a major project. You can hire an architect and then hire a contractor, or you can hire one company that does both architecture and contracting (design/build). While one stop shopping may sound good, in practice there are major problems with it.

For starters the architect is going to do whatever is best for the person who is signing his/her checks. An independent architect will do what’s best for you. An architect in a design/build firm will do what’s best for the design/build firm. The architect for a design/build firm is less likely to spec things like sound insulation in walls, or higher grade materials that will last longer.

But more importantly, you will have disagreements with your contractor – even when you have a great contractor. If there’s no independent architect who can act as a mediator, then the disagreements are more likely to end badly. If you’re wrong, you may not believe a design/build architect as much as you’d believe an independent architect. If the contractor is wrong, an independent architect is more likely to push the point and get the contractor to do it right.

Third: Have The Contractor Sign A Waiver With Every Payment

When we closed on our place our real estate attorney gave us a document and told us to have the contractor sign it every time he gets a payment. In the document he should affirm that all subcontractors have been paid for work covered by the payment and he should also waive his right to put a lien against your property for the work covered by the payment.

Our construction loan is from Wells Fargo and I was pleased to see that they require the contractor to sign exactly that type of waiver before they cut the check. If your bank doesn’t include the waiver, ask your real estate attorney for one.

That waiver would have solved a lot of problems for us since our old contractor started all the drama by putting a lien against our coop.

BTW, if you do get a lien filed against you, just bond the lien to make it go away. You’ll need to put give a bonding agent 110% of the lien amount, and two years later you’ll get your money back (with interest) if the contractor fails to sue you during that time.

Fourth: Pick Your Contractor Very Carefully

It’s really difficult finding just the right contractor. Try to find friends who recommend people they’ve used before. Examine the work closely to see if it’s a level of finish you’d be happy with. Don’t be put off by the fact that your friend may have had a few problems during the process – dig deeper and ask how the problems were resolved. Problems will always come up – the issue is how the contractor dealt with them.

Be wary of referrals from people you don’t know, or people who aren’t in the same position as you are. For example the contractor who is suing us had a lot of referrals from people who were flipping apartments. Flippers have a very different outlook than homeowners. Flippers don’t care if things fall apart in 5 years. They just want it to look good for the sale.

In the end go with the person you trust the most in your gut, but realize that you may have to cut things from your project to afford the contractor you trust. And don’t move forward until you’ve found someone you really, honestly trust to do the job right.