It's been a long road, we know that. Have you ever fallen in love one day and your heart is broken the next? If so, then you probably have a good idea of what it's like to search for an apartment in New York City. In New York City, when offers due to the pandemic expired, people who had reduced the price of their apartments were forced to buy new ones, giving landlords the opportunity to further increase rents. This has boosted competition in an already tight market, which has further increased costs.
Crazy, unsustainable and a breaking point is the environment in which I found myself last month when I went looking for an apartment in Brooklyn with two roommates (and a corgi) in tow. As a fan of organizations, my first tactic was to create a spreadsheet that included links to advertisements, neighborhoods, nearby subway lines, prices, moving dates and various services. But just as we started reviewing all the usual apartment listing sites available (StreetEasy, Craigslist, Compass, HotPads, Zumper), it became apparent that we would probably have to be flexible with our budget, especially if we wanted to stay close to Crown Heights. That's because high rental prices in Manhattan over the past year increased demand in Brooklyn and Queens, according to Kenny Lee, economist at StreetEasy.
Another source that tenants can blame for the additional competition? The Federal Reserve, in its attempt to curb inflation through interest rate increases. We threw a wide net and, man, did we catch any dead fish?. Then, there was the House of Horrors on Bergen Street. Since no one had paid the electricity bill, the tour was only illuminated by the flashlight on my phone.
The apartment had an oven leading to the staircase that led to the lower level and two bedrooms (without windows) on the ground floor. There were also two old wooden locked doors; one of the locked doors had no handle. When I asked what was behind the other one, the runner opened the door, opened it slightly and replied, “Oh, just storage,” before hurriedly closing it and closing it again. I suppose it was the final resting place of a sad imbecile who took a step too far in a horrible bakery accident.
All this was combined with the usual charcuterie board in New York City apartments, the peculiarities of the bedrooms that can only be accessed from other bedrooms, the buildings that embraced fire stations (and, in one case, a funeral home), the showers with enough mold to be considered experiments at a science fair, and the floors that made marbles run for their money. Even so, I consider myself lucky in the hunt. It could have been much worse and was nothing like the horror stories I prepared for. In total, I ended up going through about 15 apartments, the vast majority of which were raids.
But there were a few that looked promising. With a 34-foot-long corridor close to green spaces and decent public transportation, the discovery of the entire floor won our hearts. Yes, it was more expensive than we expected, but there were only four units in the building, the first of which the janitor lived. It was close to good public transport, it had a yard where our dog could run as he wanted and they could make it nice with much less time and effort than some of the wells with rent money we saw.
In addition, there is a 24-hour coffee shop one block away. That right there could have sold me on its own. Then, there are systemic issues at play. In addition, fewer affordable apartments are being built because, overall, less housing is being built, said Vicki Been of New York University.
And even if rents start to fall a little more, as recent data shows, that doesn't necessarily mean that rents will fall. This likely means that rents will simply increase at a slower rate, which, of course, is better than the staggering increases that New York City has been experiencing lately. But it's still difficult to convince people when inflation exceeds wage gains for many and means that costs are rising outside of housing. The sources I spoke to largely agreed that the New York City rental market is approaching a breaking point.
But what will that point be? And what happens once we get over it? For a city that is already struggling to adequately address homelessness and evictions, I am concerned. A lot is happening in the world. Despite everything, Marketplace is here for you. You trust Marketplace to analyze world events and explain how they affect you in an accessible and fact-based way.
We rely on your financial support to continue to make it possible. After a summer in which moving to a new apartment or renegotiating the lease seemed to be confronted by the last New York City boss, the rental market seems to be cooling down a bit. And rent may end up keeping 40% of these households' incomes, Moynihan said in a recent Associated Press interview. The increasingly desperate situation for tenants has led some to consider unique ways to give their request an advantage with landlords and brokers, such as free meals and even an offer of luxury cheese to sweeten the offer.
That means that people who could have left their rentals to move to a home they bought, instead, stay. Jonathan Miller, president and CEO of appraisal firm Miller Samuel, says that will keep rents high in the short term. Rents in Manhattan rose 2% in November, dashing hopes that prices would cool down and forced many tenants to give up their leases or downsize, according to brokers. Rosenblatt also states that thousands of rent-stabilized apartments are empty; the real estate term for this is storage.
Rents are starting to fall after reaching record levels last summer, but experts aren't sure if the slowdown will continue. Rising rents in New York also increases pressure on general inflation, as rents are a major component of inflation rates and New York is the largest rental market in the country. Most rental buildings built in New York over the past decade or more are biased toward the upper half of the market. Of course, not everyone gives gifts to runners, but if you're planning to move to the city or your lease ends in the next few months, you're probably nervous and wondering when rents will drop or, at least, stabilize.
According to a recent StreetEasy study, the gap between real wage growth and rental prices in August was 23% if inflation is taken into account. In Florida cities, such as Boca Raton and West Palm Beach, rents fell by -0.1% and -0.5%, respectively, compared to last month. The increases continue to challenge predictions that New York's sky-high rents would fall after the summer and provide some relief to tenants after rents hit historic records. .