As NYC rebounds from the pandemic, rents begin to rise

Two years ago, rents in New York City dropped significantly due to the pandemic. Now, as the city continues to lift COVID-related restrictions, rents begin to spike across all five boroughs and surpass their pre-pandemic levels. 

The market data collected by StreetEasy shows that rents have been going up dramatically. In January 2020, pre-pandemic, the median asking rent in Manhattan was $3,500. A year later, the rent dropped to $2,750. In January 2022, it rose by more than 30 percent and reached $3,700. 

The pandemic rebound is driving up housing costs. Rents in other boroughs across New York City are also growing. Between January 2021 and January 2022, rents in Brooklyn rose from almost $2,400 to $2,722. In Queens, over the same time period, the median asking rent spiked by 15 percent, from $2,000 to $2,300. 

Renters make up two-thirds of all NYC households, the New York Times reports. The dramatic rent increase worsens the already existing affordability crisis and pushes New Yorkers to leave the city. Last month, Zumper, the largest privately-owned real estate platform, published the national rent report. According to the report, the national median one-bedroom rent is going up 12.3 percent year-over-year. 

“Rent’s rapid rise is largely tied to the home sales market. As home prices rise, they price out renters who would otherwise buy. And because the home sales market has gotten so hypercompetitive, many frustrated renters in the market for a home have simply given up because the process is so exhausting and demoralizing,” wrote Jeff Andrews in the Zumper national rent report. 

“These renters also have high incomes relative to other renters - they’re in the bubble of being able to buy a house after all - so the home sales market is keeping high-income tenants in the rental market longer than they want to be. Thus, rent rises.”

New York takes first place among American cities with the highest rent jumps. The NYC rental market is improving, and demand from potential tenants is growing. Fewer landlords will be willing to compromise and offer a lower rent increase. Therefore, those New Yorkers, who signed the lease when rents were down, will have to pay way more to keep their place or search for a new rental unit. 

Resources:

“This Price Surge Really Hits New Yorkers Hard,” by James Barron (The New York Times, 2022)

“Rents Are Roaring Back in New York City,” by Mihir Zaveri (The New York Times, 2022)

“Rent spikes in NYC to nearly double national average,” (ABC 15, 2022)

“Zumper National Rent Report,” by Jeff Andrews (Zumper, 2022)

“Data Dashboard,” (StreetEasy)