Rent Prices in New York City Skyrocket after Pandemic

Rents in New York are currently exceeding pre-pandemic prices. The rise affects mostly wealthy neighbourhoods and makes it difficult for anyone with renewing leases, or currently wanting to move to the city.

Many landlords lowered their prices during the pandemic to keep the city attractive to people who were leaving due to the virus and the lockdown of numerous economic sectors. With the COVID-19 vaccine and infection rates slowly receding, people are coming back to New York City. And with them, the incredibly high housing costs that had been lowered.

David Quinzin used to live in the city before the pandemic. During Covid, the student moved back in with his parents. “Recently I’ve been trying to move back into the city. And the prices… I’ve never seen prices like this in my whole life. For a little studio apartment that is maybe 20 square meters, you have to expect paying 2000 USD, that’s the minimum when you are trying to officially rent a place,” he told 9to5.

Two years ago, David Quinzin had a budget of 900-1000 USD and lived in East Harlem in a shared apartment with two other students. Finding a place with the same budget now seems to be an impossible task. Broker fees are high, and utilities are always charged extra. Many people are trying to find cheaper places through sublets, Facebook, and other non-official websites.

“I commute every day. The thing is, more and more people that I know and see at school are in the same situation as me, where they can’t live on their own yet because of how bad the situation is in the city,” Quinzin told 9to5.

The economic context

Rental prices are increasing most in wealthier parts of the city, because that is where they dropped most during the heights of the pandemic, as the NYU Furman Center for research on housing and urban policy in New York City found.

According to the Manhattan Rental Market Report, prices for studio apartments without a doorman in Manhattan increased by 21,3 % on average within the last year, whereas the price for a studio with a doorman has risen as far as 35,4 %, amounting to rental fees of approximately 3,600 USD monthly on average.

Price Changes in Manhattan Studio Apartments, Manhattan Rental Market Report

Not only Manhattan is affected by the surge. Emily McDonald, employee at New York real estate website StreetEasy said that current data shows that the median asking rent prices as of February 2022 rose 16,7 % in Brooklyn, and 15 % in Queens. In the whole of New York City, 13, 2 % of rentals advertised rental concessions as in February 2022. That is 21,9 % less than last year.

During the pandemic, federal aid funding was mostly applied to emergency rental assistance programs. However, Charles McNally, director of external affairs at NYU Furman Center, told 9to5 that “the decline of rents was much more connected to people leaving temporarily or permanently locating from Manhattan in particular”.

Around two thirds of the 3,3 million households in New York City rent. The rent regulatory system applies to approximately half of the rental stocks. “There are about 2 million rental units in New York City and just under half of those are governed by the rent regulation system, which limits annual increases in rent,” McNally explained.

The other half of rental units is not governed by this regulatory system. “It’s usually for new apartments that are becoming available when people raise the rent. That’s where the issue comes in, it affects a lot of people that are trying to come back into the city, “ Quinzin told 9to5.

The New York City Housing Crisis

Research continuously proves that housing affordability and homelessness are connected. The primary cause for homelessness in New York City is the lack of affordable housing, according to the Coalition for the Homeless.

Whether the current rise in rents also contributes to homelessness is not certain, as it primarily affects the wealthy parts of the city. “I think the continued climb of rents suggests that there are more people that want to come than that want to leave. “, McNally explained.

New York City and state policy makers are aware of the housing affordability crisis in New York. However, one of the few events that made rents go down was the pandemic. McNally does not believe that rents will decline again. “I think that there was a brief period early on when people felt that New York’s amenities and walkability might be permanently depressed, but now that the pandemic has become a more regular part of life, it seems like those judgements were prematurely made and the market has recovered.”

On StreetEasy, as of January 2021, over 62.000 rentals were available in New York City. The rental market has now recovered to the point where less than 25.000 rentals are currently available.

In the future, adding enough subsidized and affordable housing seems to be what could help stopping rents from growing as quickly. Whether the city and state will effectively work towards that remains to be seen.

“It’s a very difficult place to live in,” said Quinzin.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s