However, this relief in rental prices will be slow to come due to the limited inventory of rental units. For rents to fall, there would have to be a drop in demand and an increase in available apartments. And even if they're not in the office, tenants are likely to continue paying rent, Sweeting said despite all those demands for unpaid bills. They may not be using the space, but at least they're paying rent to the landlord and, presumably, that allows the landlord to come in and continue paying their property taxes.
Similarly, a forthcoming Moody's Analytics forecast forecasts a rental growth rate of 5 to 7% over the same period, says Thomas LaSalvia, director of economic research at the financial analysis firm. Therefore, while there are unprecedented rents at the top of the market, rents for more affordable apartments are also rising because fewer of these types of buildings are coming to the market, buildings designed to attract lower-paying tenants. If your lease has expired, staying and negotiating with the landlord might be a better option than trying to move, at least until the rental market slows down even more, said Paula Munger, assistant vice president for industrial research and analysis at the National Apartment Association. The CEO of Bank of America, Brian Moynihan, said that high rents are a cause for concern because they can represent a large part of a household's net salary.
A year ago, bidding wars for rentals were unheard of, and now tenants expect to offer a higher rent than requested. Most rental buildings built in New York over the past decade or more are leaning toward the upper half of the market. Tenants who can't afford rent increases but can't afford to move out are often forced to choose between paying rent or meeting their basic needs. One of the main reasons for the rent spikes has been the increase in demand from people who are excluded from a booming housing market.
In Florida cities, such as Boca Raton and West Palm Beach, rents fell by -0.1% and -0.5%, respectively, compared to last month. Meanwhile, high rents are disproportionately hurting low-income residents across the country, said Ben Martin, research director at Texas Housers, a nonprofit organization that works for housing justice. Remember that stabilizing rents is part of the city's attempts to preserve affordable housing, and getting one of these apartments is like hitting the jackpot for a New York tenant: you get automatic lease renewals and annual rent increases limited to the percentages approved by the Rental Guidelines Board (even if that agency just approved the biggest increases in a decade). Thus, since the rental market currently follows the fundamental principles of supply and demand, Rosenblatt says that there are no signs of rents falling in the coming months.
A year ago, many were taking advantage of lower rents, and now they are moving to the city in spite of that. And rent may end up keeping 40% of these households' incomes, Moynihan said in a recent Associated Press interview.