Ron Mattocks asked:


The New York Post ran an article on June 8, 2008, titled NY Is #1 In Charity CEO Pay.  The article revealed either an embarrassing lack of understanding on the part of author Bruce Golding, and his editors at the Post, or a deliberate attempt to mislead the public.

Anyone who has ever lived in or visited New York City knows it is expensive.  The cost of living, or operating any business in New York City ranks at the highest levels in any comparisons of major metros.  Those employed by nonprofit organizations pay the same rental rates, the same commuter fees, and the same income taxes as those who work in the for-profit arena.  Nonprofit organizations compete for human resources, and although they cannot typically pay the same rate as for-profits, they must pay at a level proportionate to the local cost of living if they expect to recruit or retain skilled staff.

I find the use of the word “charity” in the headline and throughout the article to be troublesome.  The two specific cases referenced for high salaries paid to CEOs are the Metropolitan Opera and the Museum of Modern Art.  Both are incorporated as nonprofit organizations to serve the public, but not all nonprofit organizations are charities.  Many nonprofits serve the public under the umbrella of nonprofit law on a fee-for-service basis, including hospitals, universities, and even art museums or operas.  Under nonprofit law their tax burden is limited or eliminated, and they can raise capital through tax deductible donations. But that does not make them charities in the truest sense of the word.

True charities, on the other hand, are totally benevolent, serving populations that cannot help themselves nor can they pay a fee-for-service.  The Bowrey Mission, founded in 1878, is a wonderful example of a New York City charity.  During the past year, this nonprofit charity served over 400,000 meals and provided over 80,000 nights of shelter in their efforts to care for the 3,300 men and women living on the streets of New York City without shelter. Executive Director Ed Morgan is a gentle, compassionate man who came to the Bowrey Mission to serve, following a stellar corporate career.  According to the most recent IRS filings, the combined salaries of the top five managers total less than $300,000 (combined) to run this $9 million operation with over 100 employees.

The nonprofit community is a national treasure, and is rich in diversity serving every imaginable need through business models that range from totally benevolent (i.e. charitable) to fee-for-service operations that sustain themselves.  Diligent nonprofit boards take great care to establish executive compensation based on local cost of living, combined with market value of skills and experience based on comparable positions and responsibilities.  For the New York Post to imply that New York’s nonprofit community at large has been irresponsible in executive compensation, and to do so by referencing two highly paid (and appropriately so) nonprofit executives, is to grossly distort reality.  If every nonprofit serving New York City were to close down, government and industry could not fill the gaps, and the city would be in chaos.  We are all beneficiaries of the nonprofit community, and must do all we can to assure its integrity and continuing fiscal well being.



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Markus Skupeika asked:


Recent surveys showed that New York has more Americans renting than owning houses. Close to its heels comes Seattle registering an almost 7% jump in the roster of renters over last year’s figures. This trend does not show any signs of weakening interest, as more and more people are catching the “renter’s fever”. For 2007, apartment rentals have skyrocketed between 7 and 8% - a classic example of the law of supply and demand in real estate investment, taking action.

Reasons were varied: others opt to rent instead of owning a home due to many issues that have hounded the real estate industry for the past couple of years, such as escalating housing rates, more stringent standards and procedures on loans, unattractive mortgage packages and foreclosures becoming more rampant, which have triggered fear of embarrassment in the hearts of ordinary Joes. No wonder, landlords are making frequent trips to the bank.

For a newbie mortgage investor, this places him in a dilemma, which investment road to take: finance the purchase of a home or fine-tune his resources to the call of the times, which places financing apartments and condominiums in the league of more viable options? Rather than providing resources for home financing with the prospect of flipping it afterwards, both real estate and mortgage investors, in the past couple of years, have focused more on putting up apartments and condominiums. Not that it was a new trend, but more and more investors who were originally all agog over putting up homes are now taking a second look at this once less-popular route in real estate investment.

At this time, rentals are fetching more money for both real estate and mortgage investors, and the rate this trend is taking, more investors will be joining the bandwagon, soon. However, for a family who wants to establish root in a particular community where children can interact and form solid friendships among neighbors, home ownership is still the best option.

What triggers the latest craze?

In New York City alone, which has become the “melting pot” of the world, where careers and business are pursued by people coming from other states and foreign countries, only 20 % opts for home ownership; 80 % prefers apartment accommodation, for its practical sense. Ranging from the most stylish accommodation to the more “hurried” space typical of the lifestyle of transient businessmen and young professionals who find themselves traveling for most times of the year, rentals have accelerated this year by 8% however, compared to owning a home in New York City, it is still a “dime to a dollar”.

This “dime to a dollar” analogy between owning a home and renting an apartment has ripple effect on developers, as well. When there is decline on the demand to purchase homes, naturally developers will look elsewhere for viable options like putting up apartments and condos, and the imminent lack for housing units will heighten the demand in making a leap from owning a home to renting. Either way, an astute Real Estate Investor smells lucrative investment opportunities, even miles away.

So, Where to Invest: Home or Condo?

A newbie real estate investor should consider factors that can have direct impact on people’s decision, such as employment opportunities in the locality, economic growth, present supply of housing units, including apartment/condo accommodations, and the prevailing prices of homes or rentals in the locality, and make a thorough assessment, before he jumps on a decision.



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