As a front row witness to the exorbitant and ever-increasing apartment rents being asked for and received by landlords across NYC, will 2017 see rents declining with a shift in power to the renters?
Take heart New Yorker renters, you may finally have hand!
April 9, 2016 in the article at the Hallmark Abstract blog titled, ‘NYC Rents Negatively* Impacted By The Law Of Supply And Demand‘, we opined on the subject of NYC rents in the context of the law of supply and demand…
‘Negatively of course if you are an apartment owner or developer and positively if you are a prospective tenant!
Economics 101: More supply in the face of steady or even declining demand, regardless of the product, will lead to lower prices!
Of course in the category of luxury Manhattan rental apartments, there are other variables that, despite any new supply, will come into play such as quality of the construction, amenities offered in the building, location (and view) and potentially even the ‘name’ of the developer.
But, all things being equal, the law of supply and demand is one economic theory that there are very few ways to circumvent.
So in an interesting turn of events to what has seemed to be an era of ever increasing Manhattan rents, at least on the very high-end, the tide now seems to be turning…’
Last week an opinion piece from The New York Times by Ronda Kayson ‘confirmed’ our suspicion that for the first time in a longtime NYC renters, to co-opt a phrase from Seinfeld, may finally have hand (aka leverage).
‘2017: Year of the Renter‘
New York renters would be the first to tell you that rents go in only one direction: up. But after a long and relentless climb to historic highs, the momentum has stalled.
With renters unwilling, or unable, to pay ever higher sums, rents have largely flatlined. And it seems we have come to the year of the renter’s market.
In Manhattan, Brooklyn and Queens, inventories and vacancies are up, and landlords are offering new tenants discounts, like several months of free rent and no broker’s fee. In the Bronx and Staten Island, rents are holding steady because those boroughs did not experience the same rapid rent escalations or volume of new development. But that could change when new rental buildings open in both boroughs this year and in 2018.
The biggest deals are happening at the top of the market, where some luxury developments are offering as much as four months of free rent on a two-year lease. But deals are to be had in older, less expensive buildings, too. Despite these concessions, some apartments linger vacant for months. Worried that a slowdown will continue, many landlords are not raising the rent when leases come up for renewal, and some are even throwing in perks like gift cards.
Many landlords and real estate brokers attribute the renter-friendly trend to an influx of new apartments: 11,514 new rental units came on the market in Manhattan and Brooklyn in 2016, and 13,340 are expected this year, according to Citi Habitats, a real estate brokerage. The large number of condominium apartments that investors have turned into rentals has added to the glut. These apartments are mostly luxury rentals, and too expensive for many New Yorkers. So tenants with smaller budgets are fanning out to neighborhoods like Crown Heights, Brooklyn, and Jersey City…
Read the rest of the article here.
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