Dogs and Dollars

The question that was put to me last week: “Does a building’s rules to allow pets, specifically dogs, impact the value of a property?”

I have sold about 25 units in a building on the West Side that has not allowed dogs in many years, so the question isn’t new to me.  Some shareholders were adamant that they could get even higher prices if dogs were allowed.

Jump for Joy! Skinny Dogs make the cut!

You have buildings that don’t allow dogs, or buildings that allow dogs under a certain weight, or only a certain number of dogs- say, one per household.

I’m not always clear about what the reasoning is behind these rules.

Is it that no one wants to ride an elevator with a large dog?  Or that a house with two dogs will be noisier?  Or that it’s a slippery slope towards running a breeding facility in your apartment?

From some initial conversation with Brown Harris Stevens’ Chief Economist Greg Heym, and Michael Vargas from Vanderbilt Appraisal, it would appear that the financial impact of no dogs allowed would be very hard to measure.  So, instead, let’s look at the other building rules which I would think have much bigger impact on values, to give some context.

  1. Downpayment – We could do a study on buildings requiring 50% down and how it affects many middle-of-the-road cooperatives, say, on the Upper East Side.  It’s clear that this policy is onerous in this environment, and when you add in the cost of renovation, a very common expense for new buyers in 30+ year-old coops, a very present reality.  Coops have to change their policies or risk affecting sales prices.  This seems like the biggest policy affecting value in many buildings.
  2. Washer/Dryer – Buildings that do not allow Washer/Dryers are not only out-of-tune with current buyer needs, but seem to be doing so with little research on how easy it is to control leaks and manage the impact on pipes.  It seems that the good far outweighs the bad, in allowing w/d in a building.
  3. No central a/c Allowed- Again, this is a policy sometimes dictated by Landmarks, but more often just an outmoded level of thinking.  If someone is spending North of $3mm for a property, wanting central air seems like a “duh.”  Thru-wall a/c is certainly second best, but is more noisy.  And thru-window?  Definitely can be a deal killer, and a value killer as well.
  4. Dog Policy- This ranks way down in my view.  Assuming that you’re not living next door to a dog run, or even if you are, dog ownership rules don’t seem that stifling.  In fact, I think I wrote about a couple whose very cute dog was allowed in a building that didn’t allow dogs!  Now, little Benson is happily enjoying his life with his mom, dad and their new daughter.  Life is good for him!  Again, hard to quantify.
  5. The only rule that might be less impactful are subletting rules.  Generally, unless a coop decides to be very, very lenient, these rules are more for shareholder information, in the case of a sabbatical year or job relocation- and don’t impact prices.

Some food for thought!  Reach out with other questions! -Scott