As rents increase, NYC tenants decide between paying more or moving out

The New York City rental market grows more competitive by the minute, pushing tenants to face a tough dilemma. Manhattan asking rents jumped nearly $1,000 in one year, from $2700 to $3,695, according to StreetEasy’s Q1 2022 market report.

The low inventory and spiking demand make it difficult for New Yorkers to find a cheaper place in a competitive market. In Manhattan, 56,973 rental units were listed on StreetEasy during the first three months of 2021. A year later, this number dropped by more than 50 percent, with only 23,419 units available on the rental market. However, the Manhattan market is showing some promising signs. The report suggests that rental inventory has been rising steadily since late March. 

NYC rents continue to increase outside of Manhattan. Brooklyn asking rent went up 16.9 percent from last year and reached a record $2,800. Similar to Manhattan, Brooklyn inventory is sinking. The number of rental units listed on StreetEasy in Q1 dropped from 42,055 to 21,863 in one year. In addition, Brooklyn rentals offer the lowest discount compared to Manhattan and Queens. 

Although Queens median asking rent went up 15.1 percent to $2,300, there is still a chance landlords might drop their prices. The report found that in the first quarter of 2022, 12.5 percent of rentals available in Queens lowered their price. The borough inventory fell 40.7 percent year-over-year, with 16,570 rentals available on StreetEasy in Q1 of 2022.   

When NYC renters must choose between renewing their leases and paying more or looking for another unit, many decide to move out. Equity Residential owns and manages thousands of apartments across Manhattan and Brooklyn. The company’s current renewal rate dropped to around 60 percent, Bloomberg reports. However, Mark Parrell, Equity’s Chief Executive Officer, says the company is still able to attract new tenants at higher rates. 

“Landlords have the ball in their court,” Compass agent Carlos Aldana told The Real Deal. “They’re offering aggressive renewals and if that renter says no, they know that they’ll be able to achieve it elsewhere.”

Resources:

“With Pandemic Deals Expiring, NYC Renters Face Transformed Market,” by Emily McDonald (StreetEasy, 2022)

“More NYC Apartment Renters Are Moving Out Instead of Paying Higher Rates,” by Jennifer Epstein (Bloomberg, 2022)

“New Yorkers moving in face of steep rent hikes,” by TRD Staff (The Real Deal, 2022)