Yesterday I shared in the EVG Instagram Stories the above post from the @nytimes account about the sky-rocketing rents for NYC apartments.
In the photo, the East Village resident and roommate reportedly paid $3,300 in rent in 2020… $4,700 last year… and a staggering $6,300 in 2022. They will likely need to move.
I heard from about a dozen (now-former) East Village residents via Instagram who said they found themselves in similar situations: landlords dropping exorbitant increases on their market-rate apartments in the past year. In most cases, the residents had to move away … some went out of state to live with relatives … another is couch-surfing in Brooklyn … while one said he found a place in the farthest reaches of Queens.
Despite gradually improving inventory, asking rents are rising steeply as landlords seek to reverse pandemic-era discounts. Rental demand has remained strong as more people gradually return to the city after a jump in outbound migration during the pandemic. Disappearing rental concessions also suggest landlords remain confident about demand. Meanwhile, priced out of Manhattan, many renters are shifting their search to more affordable areas in Brooklyn and Queens.
Quarter-over-quarter, NYC rental inventory rose 14% to 65,697 available units in Q2. The strong increase may seem like a positive development for renters, but many of these rentals are expired pandemic-era deals that re-entered the market with significantly higher asking rents. Throughout 2020 and 2021, many landlords offered steep discounts and free months of rent — deals that have mostly lapsed by now.
Landlords have been raising rents more aggressively on units they leased during the pandemic in effort to recoup the earnings they lost. On average, rentals that were listed in 2020 or 2021 and relisted in Q2 2022 showed a 20.4% increase in asking rents per year. In comparison, rentals that were listed in 2018 or 2019 and relisted in Q2 2022 showed a rent increase of 4.5% per year. The 20.4% jump in rent is nearly four times as steep as the yearly increase a tenant would have seen otherwise – which can mean the difference between losing and keeping their current home.
Per the report, Manhattan’s median asking rent rose to $4,100 by the end of the second quarter — the highest on StreetEasy record and equivalent to 55% of the borough’s monthly median household income.
In the East Village, the StreetEasy data shows the median asking rents on active listings in the second quarter jumped 43.1% to $4,150 from the same period in 2021
And there have been articles about hour-long lines to view some pretty humdrum East Village units. And there have been lines to check out larger units, such as a three-bedroom space asking $5k-plus on 10th Street at Second Avenue (photo from July 16 by Steven)…
Some parting thoughts from StreetEasy’s report:
Unfortunately, the recent improvement in rental inventory has been largely driven by households being priced out of increasingly unaffordable rentals. In addition, as interest rates rise, more would-be homebuyers may be forced to resign themselves to renting, pushing up the demand for rentals even further. During this transition in the NYC market, we foresee rent increases continuing at least through the end of this summer.