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Building the Next Budget: How Taxes, Electricity, and Labor Are Shaping Costs

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Insights / Board Finance

Three of the biggest lines in any building’s operating budget are moving at once. Here’s what boards should factor in as they plan the year ahead.

Nouveau Property Management Team • October 2026 • 5 min read

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Property Taxes: The Largest Line, and Still Climbing

Co-op assessments are tied to the value of comparable rental apartments in the neighborhood, so rising rents can push a building’s assessed value up even when sale prices are flat. A Council of New York Cooperatives & Condominiums review of co-op operating costs found real estate taxes rose roughly 20% between 2019 and 2024. Early this year, the city also floated an additional 9.5% property tax increase as a fallback if a proposed wealth tax didn’t move forward. Whether or not that happens, boards are better served modeling a range than a single number. And don’t leave savings on the table: eligible buildings need to file for the Co-op and Condo Property Tax Abatement by February 15.

Electricity and Gas: Smaller Increases, Locked In for Three Years

In January, the New York Public Service Commission approved a three-year Con Edison rate plan. Average residential electric bills are set to rise about 3.5% to 3.9% in 2026, roughly 3.2% to 3.3% in 2027, and about 3.1% to 3.2% in 2028, depending on usage. Gas is rising faster: 4.4%, 5.7%, and 5.6% over the same three years. Building-wide and common-area accounts can fall under different rate classes, so ask your managing agent to apply your building’s actual tariff — but the direction is clear: plan for steady annual increases, not a one-time bump.

Labor: A New Four-Year Contract Sets the Pace

In April, the Realty Advisory Board and 32BJ SEIU reached a new four-year agreement covering doorpersons, porters, handypersons, and superintendents at thousands of residential buildings. The owners’ group puts the weighted average annual wage increase at 3.48% over the life of the contract, and the deal keeps employer-paid health benefits with no premium sharing. For staffed buildings, payroll is often the biggest operating expense, so these increases belong in the baseline, not the contingency line.

One More Line to Watch: Insurance

The same CNYC review found insurance had the steepest percentage increase among co-op operating costs — roughly 120% from 2019 to 2024. Start renewal conversations early and get competitive quotes, rather than accepting a renewal at face value.

Small Steps Beat Big Jumps

Because most of a building’s budget is fixed costs, there’s limited room to cut once the year begins. Modest, predictable increases in maintenance or common charges each year are usually easier on owners than deferring and absorbing a large jump later — especially when paired with a steady reserve contribution, so capital needs don’t turn into emergency assessments.

Every building’s numbers are different. Use these benchmarks as a starting point, and build your budget from your own tax bills, utility invoices, and service contracts.

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New Rules, Faster Answers: What Local Law 58 Means for Co-op Applications

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Insights / Board Compliance

A new city law puts a clock on how long a co-op board can sit on a purchase, sale, or sublet application. Here’s what changed as of July 2026.

Nouveau Property Management Team • October 2026 • 3 min read

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What the Law Requires

Local Law 58 took effect July 28, 2026. It requires co-op boards and their managing agents to acknowledge receipt of a purchase, sale, or sublet application within 15 days, and to issue an approval or rejection within 45 days after the application is deemed complete.

Why It Was Passed

Co-op board review has long been criticized for open-ended timelines that can leave buyers, sellers, and their brokers in limbo for months with no clear answer. Local Law 58 is aimed directly at that uncertainty, giving applicants a defined window instead of an indefinite one.

What It Means for Boards

Boards and managing agents now need a documented process for logging when an application arrives, when it’s considered complete, and when the clock starts and ends. A missed deadline doesn’t just frustrate a buyer — it can now be treated as a compliance issue in its own right, so building this into your board’s routine matters.

What It Means for Owners and Buyers

If you’re selling a unit or sponsoring a buyer’s application, you now have a concrete benchmark for how long board review should take. If your application has been acknowledged and marked complete, your board owes you a decision within 45 days.

“Complete” is the key word in this law — the 45-day clock starts once the board confirms your application has everything it needs, so a thorough, well-organized submission can work in your favor.

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Don’t Miss It: The February 15 Co-op/Condo Tax Abatement Deadline

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Insights / Board Compliance

The filing window for the 2026-27 Cooperative and Condominium Property Tax Abatement is open now. Here’s what boards need to file, and by when.

Nouveau Property Management Team • October 2026 • 3 min read

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The Deadline

NYC’s Department of Finance is now accepting applications for the 2026-27 tax year abatement. The filing deadline is February 15, or the next business day if that date falls on a weekend or holiday. The board or managing agent files on behalf of the whole building, not individual owners.

What It’s Worth

Abatement levels are tied to a unit’s average assessed value: 28.1% for units assessed at $50,000 or less, 25.2% for $50,001 to $55,000, 22.5% for $55,001 to $60,000, and 17.5% above $60,001. Many boards apply an assessment to shareholders equal to the abatement amount, so the savings may show up on the building’s books rather than as a direct credit to an individual owner.

Who Qualifies

The building must be a Tax Class 2 property and cannot be receiving the J-51 exemption or 420c, 421a, 421b, or 421g commercial tax benefits. Each unit owner must certify that the apartment is their primary residence.

A Related Bill to Watch

Separately, NYC Council Introduction 1015 would extend J-51 tax abatement eligibility to certain alteration and improvement projects completed between June 2026 and June 2036, for buildings with an average assessed valuation under $60,000 per unit. It remains in committee and is not yet law.

The underlying abatement program was extended by a 2023 state law through at least 2026 with its rate tiers unchanged. Confirm your building’s eligibility and filing status directly with NYC Department of Finance or your managing agent well before February 15.

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Local Law 97 in 2026: Where Co-op and Condo Boards Stand

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Insights / Board Compliance

New York’s landmark emissions law is now in its second compliance cycle. Here’s what boards need to know about costs, deadlines, and the relief efforts underway.

Nouveau Property Management Team • October 2026 • 5 min read

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Where the Compliance Clock Stands

Covered buildings — generally those over 25,000 square feet, which includes many co-ops and condos — file annual emissions compliance reports every May 1. Buildings have now moved through a second filing cycle, and residential co-ops and condos continue to be flagged as among the properties most likely to struggle meeting the city’s 2030 emissions limits, largely due to older building systems and the cost of retrofits.

The Price Tag

A study by the Council of New York Cooperatives & Condominiums estimated that bringing some smaller residential buildings into compliance could cost more than $90,000 per apartment by 2030. For many boards, that means a real conversation with shareholders or unit owners about financing — assessments, loans, or reserve draws — well before any penalty becomes a risk.

Help on the Way — Slowly

New York’s 2025 state budget allocated funding, administered through NYSERDA, for energy-efficient equipment in co-op and condo apartments. The program is budgeted for the 2026 fiscal year, but NYSERDA still has to finalize the rules and application process, so boards should watch for guidance rather than assume funds are available today.

A Possible Reprieve for Smaller Buildings

A City Council bill aimed at easing Local Law 97 penalties for co-ops and condos with lower average assessed values per unit has been introduced, but as of this writing it remains stalled in committee. Boards should not plan around relief that hasn’t passed.

Every building’s compliance picture is different. A decarbonization plan — even a preliminary one — can also help a board seek flexibility from the city if a 2030 deadline isn’t achievable.

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The FARE Act, One Year Later: What Renters Should Know About Broker Fees

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Insights / Rental Tenants

Since June 2025, NYC landlords — not tenants — have been on the hook for broker fees when they hire the agent. Here’s what’s changed, and what’s still being contested.

Nouveau Property Management Team • October 2026 • 4 min read

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What the Law Does

The FARE Act (Fairness in Apartment Rental Expenses) took effect June 11, 2025. It prohibits landlords from passing the cost of a broker they hired on to prospective tenants, and it requires landlords to disclose all fees a tenant will owe before a lease is signed. Before the law, renters routinely paid 10% to 15%, and sometimes as much as 20%, of a full year’s rent in broker fees just to secure an apartment.

Who Enforces It

The NYC Department of Consumer and Worker Protection enforces the FARE Act. A landlord who hires a broker to market a unit must pay that broker’s fee directly; tenants can report violations, and landlords face civil penalties of up to $2,000 per violation.

The Ongoing Pushback

The Real Estate Board of New York filed suit in Manhattan federal court seeking to block the law, arguing it oversteps the city’s authority. Separately, some market analyses suggest landlords are responding by building broker costs into advertised rents rather than absorbing them outright — worth knowing if you’re comparing listings.

What Renters Should Do

If a broker fee shows up on a lease for a unit the landlord listed, ask who hired that broker. You’re entitled to a clear, upfront breakdown of every fee before you sign — and you’re not required to pay a fee for a broker you didn’t engage yourself.

Tenants who believe they’ve been charged an improper broker fee can file a complaint with NYC’s Department of Consumer and Worker Protection.

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NYC’s 2026 Rent Freeze: What It Means for Your Lease

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Insights / Rental Tenants

For the first time in its history, New York’s Rent Guidelines Board froze rents on both one-year and two-year leases for the city’s roughly one million rent-stabilized apartments.

Nouveau Property Management Team • October 2026 • 4 min read

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What the Board Decided

In a 7-1 vote, the Rent Guidelines Board approved a full rent freeze for rent-stabilized leases signed between October 1, 2026 and September 30, 2027. It’s the first time the board has frozen both one-year and two-year lease renewals in the same cycle. A preliminary vote earlier in the year had left the door open to increases of up to 2% on one-year leases and 4% on two-year leases before the board moved to a freeze at the final vote.

Why It Happened

Mayor Zohran Mamdani campaigned on a rent freeze and called the board’s decision “a historic victory for New York City tenants.” The vote followed turnover on the board itself, including the resignation of an owner-side member shortly before the final vote.

The Pushback

Landlord groups argued the freeze will squeeze building budgets at a time when insurance, labor, and compliance costs are all rising. The New York Apartment Association warned that a prolonged freeze risks deferred maintenance and declining conditions in rent-stabilized buildings over time.

What Tenants Should Do

If you live in a rent-stabilized unit and your lease is up for renewal between October 2026 and September 2027, your renewal rent should not increase. Confirm your unit’s stabilization status and renewal terms directly with your landlord or managing agent, and keep a copy of your lease renewal offer for your records.

This freeze applies specifically to rent-stabilized units under the Rent Guidelines Board’s jurisdiction. Market-rate rentals, co-ops, and condos are not affected by this vote.

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Why Bigger Isn’t Always Better in Property Management

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Insights / Choosing a Manager

A look at how market concentration among large management firms can quietly cost your building — in fees, in attention, and in service.

Nouveau Property Management Team • October 2026 • 5 min read

Selecting a management company is one of the most consequential decisions a co-op or condo board will make. As a handful of large, national firms absorb more of the market, it’s worth asking what that concentration actually costs your building — not just in management fees, but in the attention, responsiveness, and accountability that are harder to put a number on.

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1. Real Price Competition, Not a Concentration Markup

When a small number of firms manage a large share of the market, fees can sit above what genuine competition would produce. An independent firm has to win your business on price and value, not rely on market share.

2. True Personal Attention

A portfolio of tens of thousands of units means your building is one account among many. A right-sized firm can give every property the attention it needs, not the attention it can spare.

3. No Lock-In Penalty

High switching costs let large firms coast after year one. An independent manager has to keep earning your renewal, every year, with no inherited advantage.

4. No Vendor Steering

Capital projects and maintenance contracts should go to the most qualified, most competitive bid, not to an affiliated vendor collecting a hidden markup.

5. Faster, Direct Response

Fewer buildings per manager means fewer layers between your call and a resolution. Direct relationships beat centralized call centers.

6. A Partner Who Needs Your Business

At a boutique firm, your building matters to the bottom line. That alignment of incentives is, on its own, a reason to expect better service.

“Deadweight loss rarely shows up on the invoice. It shows up as a slower callback, a deferred repair, and a board that has to ask twice.”

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