It Isn’t Easy Selling Green

I first wrote this about a year ago when Dan and I went through a LEED certified townhouse that was for sale, but I was afraid my wording was too harsh, so I never published it. But a year later the place still hasn’t sold so I’m stripping out the details of which house it is, reworking some parts, and putting up the post.

The townhouse we saw is a gut renovated townhouse that was one of the first to get LEED certification (it achieved “silver” certification). Everything in this townhouse is “green”. The plywood is green (at 3 times the cost), the dumpsters of garbage were recycled (a 1.5 times the cost), the paint is “green” (and I’m not referring to the color), there are 3 huge solar panels on the roof, the insulation is incredible (composed of things like closed cell foam and recycled blue jeans), the heating and cooling very high efficiency – EVERYTHING about the house is green. The project is even got fairly substantial national recognition and had all sorts of big name sponsors (who donated things like appliances).

It’s been finished for a while and on the market for about two years, yet it still hasn’t sold. Here’s why I think that is…

#1 – The Price

When we went through the house another couple was also looking at it. As they left a guy shouted to them from a van “how much are they asking for that place?” Their answer summed it up nicely – “Too much”.

The asking price at that time was $2.79M down from an initial asking price of $2.995M when they put it on the market two years ago (it’s now down several hundred thousand more). Simply put, NOTHING in Harlem is selling for that price. The top of the market right now is about $2M, and things were selling for even less two years ago when they priced it at $3M.

Compared to other townhouses at the high end of the market this one’s primary advantage is all the green technology, but the question is how much will someone really pay to be green? A million dollars? That’s a lot of money.

#2 – The Layout

The layout to me just seemed odd. The living room was TINY, the dining room HUGE, there are huge wide hallways with wasted space throughout the building. On one floor there are two bathrooms across the hall from each other – you’d think they’d connect at least one to the bedrooms that were right next to them. The workspace for the kid’s computers didn’t make a lot of sense to me. I understand why parents might like that, but aren’t parents buying laptops for kids these days? Plus it’s incredibly specific to a particular market segment. You have to have kids of a certain age to find that a good feature.

There were lounge spaces on each of the two upper floors instead of bedrooms. When asked why there weren’t more bedrooms the answer was that that more bedrooms would have made it even more difficult to comply with LEED standards. As a result they only managed to fit 3 bedrooms into an owner’s unit that should have had 4 to 6 bedrooms. There were also 2 bedrooms on the ground floor that I’m not counting, but that raises a whole other issue (see the next section – C of O Issues)…

That said, the top floor master bedroom suite was pretty nice. The terrace off the master bedroom was extremely pleasant.

#3 – C of O Issues

For some reason after doing all that work, the owners still haven’t gotten a new C of O three years later. Legally it’s still a C5 Rooming House that’s SRO restricted. The renovations were done legally, but for one reason or another they never took the final step. I can see on the DOB website that they put some more work into it last year, but still no C of O.

When they do get it, the plan was for it to be a single family home which seems odd to me. That’s just too big of a house to be single family. 2 family with a ground floor rental is a lot more practical. In fact they’ve set it up for a 2 family, put in the plumbing, etc. Why they didn’t file to convert it to a 2 family to start with, I just don’t understand.

#4 – The Level of Finish

While there were some very nice aspects to the house, overall the finishes were of uneven quality. The stairs are a good example. They have this cool LED lighting that’s a very nice touch, but apparently the budget was tight and they couldn’t finish the stairs the way they wanted to and so they covered the center railing with sheetrock with the metal end posts poking through (and the metal was rusting). At $3M (or any price over $2M) people expect better finishes.

What Will It Sell For?

The odd layout and wasted space make it difficult to price. I think the new square footage is about 5000 sq. ft – which is quite big – especially for a single family home. If it weren’t for the inefficient use of space $450 to $500/sq. ft. would be reasonable based on the comps and that would come out to between $2.25M to $2.5M. Based on square footage they’re finally priced right. But my gut tells me it won’t sell for that ’cause it’s got the “issues” I talk about above. I’d guess the sale price will be closer to $2M – possibly even lower.

The issue is that they purchased the place in early 2008 (really bad timing) for $1.45M and given the fact that they did a rather expensive renovation that included major structural work and absurdly expensive “green” materials, I’m guessing they’ll lose money – even at their current asking price the losses could be substantial. If they’re paying a mortgage it gets even worse given high carrying charges.

What Does It Mean?

It’s sorta sad to see a demonstration project of green architecture end in people losing money, but that seems to be the likely outcome. While I think it’s great to be green, I don’t see the point of being green at all costs. From what I’ve read LEED is an absurdly difficult standard for existing structures, but the owners and their sponsors had committed to living by LEED and by the time the expenses were mounting and the market crashing it was too late – the financial damage had been done.

In my mind the project points out that LEED isn’t a standard Harlem townhouse renovators should strive to live by. Instead, be green in ways that are practical and relevant to what we’re working with – old, imperfect buildings.

And be less dogmatic about the whole green thing… For example plywood is green by it’s very nature since it’s made up of wood byproducts that are waste material, or “junk” wood from young trees that come from well-managed, renewable forests. You’re really not achieving much by paying 3 times more for “green” plywood.

To me energy efficiency is the name of the game. Use closed cell foam insulation when possible. Have efficient boilers and zoned heating and cooling. Have energy efficient windows. But don’t try to be so green that it causes you financial problems. Done properly being green should benefit your bottom line – not hurt it.

Round 1 w/ Historic Preservation – OK So Far

It took us forever to get our application together for the historic preservation tax credit, but we finally got it in just after New Years. Yesterday we got a call from one of the reviewers who asked a few questions and then sent us a PDF of their comments. All in all no huge surprises. They wanted a lot more detail on exactly what we were doing with the exterior masonry. How we were getting the stucco off the brick in the rear. How we were cleaning the brick. Exactly what we going to do with the front since the brownstone is currently painted, etc. If you follow historic preservation guidelines none of those items are big deals. It’s just important to make sure you know what they want before you do it. Today we had a meeting with our contractor and the masonry sub-contractor – none of it seemed to be a problem, though it did change how he was going to handle the brownstone in the front.

They also wanted to know what we meant about raising the parapets. They prefer we put railings on top of the parapets instead of raising them. However, on the party wall fire code requires that we actually raise the parapet. The sum total is that they want us to raise parapets as little as possible and prefer railings over taller parapets since railings are easily reversible.

One issue was that we had spec’d vinyl windows in bathrooms. The windows are in shower areas and vinyl is more appropriate in a wet location. Plus, it’s in a sidewall which is a few feet from an apartment building – so not generally visible. The said they understood why we had spec’d vinyl in that particular location, but said the National Park Service usually doesn’t like vinyl windows. But the sum total was that they cautioned us to not order the windows before we get NPS approval – so it sounds like they personally think vinyl is OK in that particular situation.

The last issue was that I told her we heard from our window and door manufacturer that they weren’t able to fabricate 10 foot tall doors. That means we’d need to have shorter doors with a transom on top. I said our other option was to get salvaged doors and restore them, but our concern was that they wouldn’t be identical to what was there originally. She thought salvaged doors were the stronger option even if they weren’t like the originals. As long as they were of the neighborhood and of the era we’d be fine. However, in talking to our contractor today he’d prefer to make new replicas of the original doors. We just have a photo of our place from 1940, but I think it should be good enough for him to come pretty close to what was there originally, so that’s what we’ll propose in our revised application.

All in all nothing major. That means we can proceed with getting a loan and going into contract with our contractor. More hurdles to jump through, but we’re moving forward…

Differences Between NYC & National Landmark Rules

Getting our house renovated feels like a never ending series of delays. We thought we had picked a contractor, but his final bid was 88% higher than his initial bid (!). We knew his initial bid was too low, but weren’t expecting such a huge increase. Now that his price is so much higher we’re re-examining our options and are back to getting other bids. We may wind up going with him, but the equation has changed.

Then there’s the tax credit incentives which I wrote up in a previous post. It’s yet another delay, but a delay that may put $100,000 in our pocket, so it’s worthwhile…

The first thing to realize is that the tax incentives follow federal (National Park Service) guidelines. Those are not the same as New York City Landmarking rules (as enforced by the Landmarks Preservation Commission). In some ways they’re more lenient, in other ways they’re stricter. Personally, I like the national standards better than the City’s standards.

When you get landmarked by New York City their objective is to restore the area to what it looked like in the past. As you do major work you’re required to put things back to what they used to look like. But the City is only worried about what things look like from the street (with the rare exception of landmarked interiors).

The federal government has a slightly different objective – they want to preserve and respect existing historic details. They’re more restrictive in that they care about everything – not just what can be seen from the street. However, they’re less restrictive in that if an original detail is missing they’re not quite so fussy about what replaces it. I spent a half hour on the phone with the woman from NY State’s Office of Historic Preservation in part trying to understand how that actually gets implemented. They have two options for replacing original details – 1) replicate the original exactly, or 2) put something contemporary in it’s place that’s generally “compatible” with the original design and more plain (less ornate) than what was there originally. Here are a few examples…

Front Doors – When we started thinking in terms of meeting the guidelines for the tax credit we wondered what we should do about the front door. Our original plan was to have two 8 foot (French) doors with a 2 foot transom over them. The doors would be wood and have the general proportions of the original doors with wood panels in the bottoms and glass in the upper portion.  Thing is, in looking at the picture of our house from 1940 we see there were solid wood doors that were the full 10 feet tall. We then went to Demolition Depot thinking we might be able to find an old door that would pass muster with the historic preservationists. We found some, but they had glass panels in them. When I was talking to the woman from NYS I realized I had it all wrong. They don’t want old doors, or even new doors that look like old doors, unless they’re the originals or identical to the originals. The doors we were planning on initially were almost perfect – clearly contemporary, similar proportions, less ornate than the originals, etc. We’ll probably need to get rid of the transom and make the doors full height. And they may push back on the the glass in the doors – we’ll see… But the point is they like new doors better than non-original old doors.

Stoop Newel Posts – Unlike NYC LPC, the state/federal guidelines don’t require us to do anything with the newel posts – we could just repair what’s there. If we were landmarked by the City LPC I’m pretty sure they’d would require us to restore them given the overall size of our project. We want to do more than patch up what’s there – we want it to be much closer to what was there originally. Our guidelines will be 1) generally similar to the original, 2) less ornate than the original. Our only problem is Dan wants cast iron posts and finding ones that meet the federal guidelines.

Ground Floor Security Gates – Like the newel posts, because the originals are missing we have some latitude. We can do something contemporary and compatible and less plain than the original. That’ll save us a lot of money…

Windows – Again, the state/federal government lean a bit more liberal when replacing details that aren’t there. The woman I spoke with was open to the idea of “fake double hung windows” – ones that look like double hung from the exterior, but are actually tilt-n-turn windows. She was also open to the idea of having color matched protective metal trim on the wood windows’ most vulnerable spots. But she emphasized “open” didn’t mean they’d get approved. Still, I don’t think LPC would even entertain the ideas.

BUT, there are ways in which state and federal guidelines are stricter than LPC’s guidelines. They care about things like rear façades which can’t be seen from the street. We don’t have any original details inside the building, but I think they’d care about them if we had them which could be a huge headache.

Our rear deck is probably going to be the biggest sticking point. For starters federal guidelines require an archeological survey if there’s ground disturbance. However, because that’s cost prohibitive for small projects they’ve never actually required it for homeowners. But they clearly don’t like the idea of ground disturbance. Because our deck is, in part, a fire egress for our unit they’re willing to consider it. We’ll see what feedback they have.

I’m also not sure how they’ll handle the bulkhead we’re putting on the building – we’ll see what they say about that. I think we can make a strong argument for how we’ve done it, but I sorta expect them to ask us to change something – I’m just not sure what that something will be.

Both the LPC and National Park Service guidelines are somewhat difficult. I’m really glad we only have to meet one of the two. If we were landmarked by the City we’d need to comply with both. I’m also really glad we don’t have a lot of original detail. The lack of it is really helping us. After talking to her I wondered what limitations there would be if you had original plaster walls – would you be allowed to tear them out and change your floorplan?

At least they pay you to put up with all the rules…

Our townhouse over the years…

The City of New York has old tax photos available from 1940 and 1980 for people who want to know what their building looked like in the past. Here are the photos of our building…

Here’s the building in 1940…

168 West 123rd Street Harlem Brownstone in 1940

There are a few things that are interesting here. First is the size of the windows. I was expecting to see smaller panes. Clearly the architect liked the idea of big huge panes of glass.

I also like the low wall along the street, though that wouldn’t be considered safe enough these days. We plan on putting in a low wall with some sort of fencing above to make it meet current standards.

The next item is that you can sorta see the front door in the house next to ours and it’s solid wood with no windows. That’s somewhat surprising (and dark).

I also love the newel posts at the bottom of the stoop – wish they were still there. Dan thinks they’re done in brownstone, I think they’re done in cast iron. Oddly cast iron was the less expensive option back then. We probably only have the money to recreate something like them in brownstone.

The other surprising thing was that the building 2 doors down already had a fire escape by 1940 (it’s still on the building).

And here’s the building in 1980…

168 West 123rd Street Harlem Brownstone in 1980

You can see that the building had sorta seen hard times by 1980s. City records tell us a vacate order was issued in 1966 (and never lifted). So the building’s problems most likely started in the early 1960s, if not sooner.

By 1980 windows had been replaced with less expensive windows – a smaller window on the parlor floor and smaller panes of glass in the top two floors. The front doors were gone and replaced by one that was far less expensive and with a lot less character. The wonderful newel posts were gone.

On the plus side we can see that the exterior had been painted. While this may not seem like a good thing, what’s good about it is that 30 years later it’s still in remarkably good condition – the only problems are the cornices. We were thinking of doing a major job on the exterior, but seeing how stable it’s been we’ve changed our plans and will just patch up and restore the painted surface.

Our building has a commercial overlay. We’re allowed approximately two floors of commercial space. You can see in the picture that the ground floor was “The Happy Game Room”…

The Happy Game Room - 168 West 123rd Street, NYC, 1980

I’m sure the Happy Game Room wasn’t a completely legal establishment. After all, our block was a drug block back in the day. I’m sure there was a fair amount of drug use, drug dealing and gambling going on…

And here’s the building today (actually November 2009)…

168 West 123rd Street Harlem Brownstone Shell, 2009

After 1980 a storefront was added to the ground floor.

Things got pretty bad in the mid-90s when the building became a drug flop house. We’ve talked to some of the neighbors who “lived” in the building at that time. There was a raid and a largely unsocialized (nearly feral) child was found in a closet. Then there was a fire and apparently people pretty much stopped “living” there after that. But the woes continued and the building was involved in a mortgage fraud scandal that delayed it’s being renovated.

But hey, it got a tree! That’s a small step forward… 🙂

It’s definitely time for the building to get a new lease on life…

But… We don’t want to be landmarked…

Generally I’m a big advocate of landmarking – certain places just need special protection. But these days most of those places have been identified and now some of the places they’re trying to landmark don’t really warrant landmarking.

Case and point is the Mount Morris Park Historic District – there are pluses and minuses to the proposed expansion. The core of Mount Morris Park was landmarked by the City in 1971 – just a few short years after landmarking began in New York. The neighborhood was then put on the National Register of Historic Places in 1973. Then in 1996 the boundaries defined by the National Register of Historic Places were extended (see map below). Now residents are talking about changing the City’s landmark boundaries to reflect the national boundaries.

mount morris historic district map with extension shown

There are parts of the MMP extension that make perfect sense and should be landmarked. The Historic Districts Council shows examples on their website that demonstrate this perfectly. I want to be clear, I’m not against the expansion of the Mount Morris Park Historic District. BUT, not all the blocks in the proposed extension are as homogeneous as the ones they show. I think the boundaries of the extension need to be reconsidered. For example, our block is nothing like the blocks they show, yet they want to landmark it. Here are a few pictures of our block…

West 123rd Street between Lenox and Adam Clayton Powell
Variety of architecture on West 123rd Street

How is that something that should be landmarked? That’s not the streetscape of a historically significant area that needs landmarking. That’s just a nice street in Harlem. There are brownstones on the south side of the street, but I wouldn’t say they warrant landmarking either. It’s not like every brownstone in Harlem needs to be landmarked.

Brownstones on West 123rd Street between Lenox and Adam Clayton Powell

Landmarking is supposed to be reserved for things that are special – and we’re just not that special. The row of townhouses one block down that were designed by Francis Hatch Kimball – are a completely different situation…

Townhouses on 122nd Street designed by Francis Hatch Kimball

Those townhouses are incredible. They absolutely need to be landmarked, and everything adjacent to them that can be landmarked should be landmarked to preserve the general feel of the era when they were built (unfortunately, there’s a 1950s-era school across the street from them). But my point is, we’re not that special.

The other night we were walking around lower Manhattan. What struck me was the layers of history you could see in the buildings. New and old were mixed together and there were new interpretations and adaptations of old buildings. I liked the mix of it all. As you can see in the pictures above, our block is a bit like that. There are a few old brick townhouses with mansard roofs, there are classic brownstones in a few different styles, there are a couple churches on the block (both landmarked), and there are apartment buildings. One apartment building looks like it’s from the 1930s, others look like they’re more turn of the century. And then there’s the gleaming new condo – Windows on 123. We have that wonderful patchwork of different historical eras. Thing is, you don’t preserve a patchwork of eras by freezing it in time. You preserve it by letting the patchwork continue to evolve. For example, when new and old are co-existing so closely, why shouldn’t the old buildings have modern doors or windows? Yet that is what would be prevented if the block were landmarked.

Yes, there is something special about our block, but the best way to preserve it is through zoning, not through landmarking. Many of the old apartment buildings on our block are built over their currently allowed F.A.R. (floor area ratio) which means if they were torn down you’d have to build a smaller building in their place. That’s a huge incentive for their owners to keep them in tact and renovate them. Even  our townhouse – it’s currently at a FAR of 3.0. The max is 3.44, so you can’t even add another full floor to our building (though the previous owners did manage to fudge the numbers and get plans approved that included an additional floor).

If it were no big deal to own a landmarked building we wouldn’t really care. But it’s a huge headache to own a landmarked building. So many things are more complicated and more expensive. And there are certain things you’re just not allowed to do. For example, we’ll be putting in large tilt-n-turn windows that would not be allowed if the building were landmarked. I’m sure our doors wouldn’t meet with landmarks approval either – they’re modern interpretations of old doors – still wood, and similarly proportioned to the original doors, but lacking the details you would find on an old door. If I lived on a block that warranted landmarking I’d gladly put up with the headaches associated with being landmarked. But our block doesn’t warrant landmarking so neither Dan nor I feel we should have to deal with the hassles of owning a landmarked building.

There’s a community meeting this Tuesday evening (October 5th) at 7pm at the Rice High School library (74 West 124th Street). I plan on being there to see what the chances are of dropping 123rd Street from the proposed extension.