Impressive Amenities, Rising Costs. Who’s Actually Paying for That Pool?

Most buyers fixate on purchase price. But in luxury condos, the carrying costs over a seven-year hold often rival what you paid to get in and almost no one runs the analysis before signing.

Monthly carrying costs in some New York City luxury buildings have risen 20 percent or more since the pandemic. Inflation, labor costs, and ongoing infrastructure maintenance have compounded, and the bill lands on unit owners through higher HOA charges and periodic assessments. For buyers under $4 million, common charges in full-service Manhattan buildings currently average $3 to $5 per square foot per month often $3,000 to $5,000 monthly on a typical two-bedroom a cost that has risen at nearly triple the rate of inflation since 2023 and compounds meaningfully over a standard hold period.

But according to Mukul Micky Lalchandani, founder of Undivided, a boutique advisory brokerage in New York City, the issue is more nuanced than the headline number suggests. Buyers above the $4 million mark tend to be less exposed to HOA fluctuations, since most are transacting in cash after strong equity markets. But insulation from rate sensitivity does not eliminate the need for analysis. Understanding what is driving monthly costs and whether those costs are structural or manageable remains essential due diligence on any building. The analysis still matters, he says.

Not All Amenities Are Created Equal

Most buyers assume a bigger amenity package signals a better building. In practice, a larger amenity footprint distributed across fewer units means higher costs per owner and if those amenities are underutilized, the value proposition deteriorates fast.

Purchase price tends to dominate a buyers attention, but the ongoing cost of a buildings amenity load often has a more lasting financial impact. A building with a pool, a wine cellar, a staffed concierge, a fitness center, and a childrens playroom is also a building with the overhead to maintain all of those facilities distributed across unit owners, weighted by square footage.

The question Lalchandani asks on behalf of his clients is not whether the amenities are impressive, but whether the ratio of amenities to units makes financial sense. A 40-unit building carrying the amenity footprint of a 200-unit building is running proportionally higher costs per owner. You want a balance between whats being offered and whats actually driving value for owners, not just marketing value for the developer, he says.

New Yorks Structural Advantage and Its Limits

One factor that has helped contain carrying costs in New York, relative to other major markets, is the citys regulatory framework for building maintenance. The insurance crisis pushing costs sharply higher in Florida and California driven largely by hurricane and wildfire exposure has not hit New York in the same way. Local Law 11 mandates regular exterior inspections and maintenance, meaning structural issues are identified earlier and the risk of crisis-level assessments is reduced.

Inflation, however, is not a regional problem. The cost of labor and materials that goes into routine building maintenance has risen materially since 2020, and those increases flow directly into common charges. This makes the distinction between well-managed and poorly managed buildings more financially significant than it was five years ago.

The Assessment Risk Buyers Underestimate

Beyond monthly carrying costs, the less-discussed risk in luxury condo ownership is the special assessment a one-time charge levied when a building needs capital expenditure that exceeds its reserve fund. The risk is most acute in smaller buildings. A 40-unit building facing a $2 million capital project will distribute that cost very differently from a 300-unit building facing the same expense. The penthouse, carrying the highest square footage allocation, is typically the unit most exposed.

Lalchandani recently used this reasoning to advise clients away from an $11 million penthouse at a well-regarded development. The building had fewer than 50 units, an extensive amenity program, and a sales history showing consistent price declines from the original ask. The combination of assessment exposure, limited resale liquidity, and unfavorable north-facing light produced a clear recommendation against proceeding. I tell buyers that bigger numbers mean bigger problems if you get it wrong, he says. You buy based on the exit, not the entry. The future buyer youll eventually sell to is part of the analysis from day one.

What the Data Actually Shows

High common charges are not inherently a problem if they are supported by genuine value: strong reserves, high-quality management, and amenities with real utilization rates. The issue arises when high charges reflect inefficiency, deferred maintenance, or amenity infrastructure that the buildings unit count cannot sustainably support.

Buyers who examine that structure directly rather than relying on a brokers assurance that a building is well-run are in a materially stronger position. Undivideds Value Index was built precisely for this kind of scrutiny, rating NYC luxury condo buildings across eight weighted criteria including reserve fund health, amenity ROI, and exit liquidity. The monthly number on the listing sheet is just the starting point. What sits behind it is where the real due diligence begins.

When was the last time your broker walked you through a reserve fund study before you made an offer?

Mukul Micky Lalchandani is the founder and principal broker of Undivided, a boutique NYC residential real estate advisory firm specializing in luxury condos and new developments above the $5 million price point. undividedre.com

This article is based on information provided by the expert source cited above. It is intended for general informational purposes only and does not constitute legal, financial, or real estate advice. Readers should conduct their own research and consult qualified professionals before making any real estate or financial decisions.

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