Keller Williams NYC Blog

New York is notorious for many things: criminally cheap pizza slices, bustling yellow cabs, boozy brunches, the pedestrian battleground that is Times Square— the list goes on. But predating all of these things is the “Co-operative Apartment,” that puzzling arrangement whereby residents don’t technically own their apartment but instead hold shares in the building. Despite the fact that this system has dictated the domestic lives of New Yorkers for well over a century, not many city dwellers actually know where it sprang from.

It all dates back to the late 1800s when the city was facing a shortage in private housing. Sadly for the upper classes, there just weren’t enough Fifth Avenue mansions to go around. By this time, tenements had been in existence for several decades, but such a substandard way of living was out of the question for New York’s wealthy and affluent citizens. Cohabitation was something reserved for poor immigrants. Another solution was needed, something that could support the increasing number of rich folk, while providing the comfort and privacy to which people who moved in these circles were accustomed.

Opened in 1929 The Beresford is one of New York's most famous co-operatives. Credit: Ad MeskensSolving all this was French-American architect Philip Gengembre Hubert, who in 1881 built the Rembrandt. Located on West 57th street, the Rembrandt was the first of its kind and very much an experiment. It provided a number of self-contained palatial apartments to a group of gentlemen of the same well-heeled social standing. These gents essentially formed a club, and the purpose of this club was, “to share the cost of the land and a building, with each associate receiving a proprietary lease on a suite appropriate to his investments.”

With Hubert’s Rembrandt, the co-operative apartment was born. Initially referred to and viewed as “clubs,” this practical yet comfortable way of living also allowed tenants to share the cost of building maintenance and housekeeping staff. It was also through co-operatives that Hubert was able to try out some of his other pioneering ideas such as self-propelling elevators, cold-air boxes to keep food fresh, and rooftop gardens.

Due to the Rembrandt’s immediate success, several more “clubs” began popping up across Manhattan. One of these was an eleven-story building erected at 222 West 23rd street. However, this particular building only served as a co-operative for twenty-two years. In 1905 it was sold and converted into the famous Hotel Chelsea. Credit: Beyond My Ken

Thanks to the rigorous application processes that many co-operative boards apply, not to mention the ensuing building politics, many see the co-op system of tenant housing as antiquated, complicated, and outright frustrating. But we shouldn’t expect it to disappear anytime soon. Having provided the city with unrivaled living conditions for more than a century, the co-op has become a New York institution in itself.

Cooperative Village on the Lower East Side. Credit: JoelRaskinToday, roughly 80 percent of all apartments on the market are co-ops. Even though the city legalized condos in 1964, very few buildings have transitioned to what most consider the more desirable arrangement. And it’s not hard to see why. In order to convert, every resident would have to trade in their co-op shares for hefty mortgages. Plus, they would have to fork over more dough for the many taxes associated with the transaction. And this presumes that the majority of shareholders would even want to go forward with the conversion. In a building with, say, one hundred shareholders and a supermajority of 70 percent, you’d probably have a better chance of winning the Mega Millions than accomplishing the changeover to condo status. Like it or not, the co-op is here to stay.

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