Apartments for Sale

Apartment for Sale

In Manhattan last week, apartment hunters followed a newspaper ad which offered 2 1/2-room cooperative apartments in a "new development" with "elevator, steam heat, Frigidaires." The trail led to a grimy old six-story tenement with an assessed value of $15,000, in a run-down neighborhood off First Avenue. The modern apartments existed only on a set of architect's plans, the building was not open for inspection, the work of remodeling had not yet started. But the owner easily sold 14 apartments for $3,500 each, and the monthly carrying charges were far above rents prevailing in that neighborhood.

To many another big-city landlord, selling cooperative apartments looked like the best way yet discovered to 1) cash in on the housing shortage and 2) keep out of trouble with OPA. Even tenants who already had apartments were not safe from the new scheme. In fact, many a landlord, notably in New York and Chicago, has already unloaded a building, at a fat price, on his tenants. Their only protection is a year-old OPA regulation forbidding evictions to make way for co-ops unless tenants have bought up 80% of the apartments in the building. But this protection is slim. There are legal ways to make a tenant "willing" to buy.

In Chicago, a speculator paid $280,000 for a large apartment house on Lake Shore Drive. By threatening to remodel the building into smaller apartments (a legal cause for eviction), he forced the tenants to form a co-op and buy the building. His quick profit: $150,000.

Most tenants who bought into co-ops did so with their eyes open. They knew that most of those who invested in co-ops in the '20s lost their money when land values slumped. In spite of more limited liability today, they still stand to lose everything they put in if they overstay the market. But they go ahead anyway. The necessities of housing have become more important than the economics.

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