March 21, 2007--A Little Help From Mommy & Daddy

I’ve been a member of my building’s coop board for a number of years and among the things we do is review applications for the sale of apartments. Recently it became apparent that at least half the sales were to parents buying apartments for their children. For a time I thought our situation was anomalous because we have quite a few studio and one-bedroom apartments and are located near New York University. Instead of paying $1,000 or more a month for a dorm room, parents were opting to use that money to buy a place.

Studios in downtown Manhattan sell for at least $500,000 so we are talking about a significant expenditure to relieve Junior of having to be squished into an 8x10 dormitory room.

Pretty soon, as older shareholders left, our building began to resemble the very dorms these young folks and their parents were attempting to avoid. Not so much the squishing but the culture of the place.

But then we began to notice that in fact most of the people who had had apartments bought for them were not students but rather individuals in their 20s and 30s who were still early in law or financial or media or arts careers and couldn’t on their own even begin to think about buying into the still very hot NYC real estate market. So mother and father were stepping in to help subsidize their life styles.

Our experience did not appear to be generalizable but then the NY Times in its real estate section reported that this indeed is a trend. More and more parents are buying apartments for their children in New York and other cities where costs are high. And we are not just talking about just half-million dollar studios but also $1.0 million penthouses in the newly hip parts of Brooklyn. (Article linked below.)

I recall a time when parents scraped together a few thousand dollars to help a married daughter or son make a down payment on a “starter house,” but this bull market in buying places outright and giving them to children is something quite new.

Some see it as another manifestation of the dramatic increase in wealth among the formerly middle-middle class. Others as an extension of overindulging children well into adulthood. Then still others perceive something less savory going on—a way to delay separation from children by intervening and controlling their lives well past the time when one would expect progeny to be launched into independent lives.

I am of course am most interested in the latter situation out of concern for an America where there is a growing resistance among both adults and children to take responsibility for their own behavior. We see this as well sadly played out on the political and world stage where our leaders take action and then do all they can to evade even acknowledging responsibility for the consequences.

The Times reports that it is common for the parents buying the apartments to pay less attention to the financial arrangements—who will pay the monthlies, who will keep the profits if there are any when the place is sold—than to how often they get to visit and stay with their children, who will or will not be allowed to live in the apartment with their child (daughters appear to be more restricted—no boyfriends--than sons), and even what kind of furniture their children are allowed to buy—nothing from thrift shops

In some cases things get so contentious about these kinds of continuing entanglements that mommy and daddy and their kids are turning to family therapists (hey, it’s New York!) to help them “work through” the specific details of the arrangements (the decorating plans) and the emotional issues (how does it make you feel to be a dependent 30 year-old?).

Clearly, nothing is for nothing. Strings and umbilical cords are more enduring than one might imagine.