The rock-bottom rental costs New Yorkers enjoyed during Covid are a thing of the past – with prices recovering to reach near record highs.
Realtors claim unprecedented demand, sparked by an influx to the Big Apple as lockdown restrictions were lifted, is to blame for the hikes. The median monthly rent in Manhattan was nearly $4,100 per month in January, compared to a low of around $2,900 during the pandemic and about $3,500 just before.
But data has emerged that suggests there may not have been an influx at all – and landlords are accused of fabricating demand so they can charge more rent.
An analysis of Unites States Postal Service data shows there was a net movement of nearly 100,000 people out of New York City last year – in line with what’s been observed since around 2017. The trend is supported by some census estimates – yet at odds with jubilant claims by city officials, analysts and realtors that NYC is in the midst of a post-Covid revival.
And landlords aren’t just accused of exaggerating demand. It’s claimed some have even deliberately kept properties off the market, so it appears there are fewer available – meaning the ones that are listed can be priced higher.
USPS data for change-of-address requests, a reliable indicator of how an area’s population is changing, suggests a net outflow of people from New York City, despite claims in the realty industry of a huge demand for property
After a slump during the pandemic, rents in New York City have reached record highs. The median rental rate for an apartment in Manhattan was $4,097 in January 2023
A report by Douglas Elliman, one of the city’s largest real estate firms, said median rents in Manhattan were $4,097 in January 2023 – a year-on-year rise of 15.4 percent. It’s the third-highest rate on record, after a peak in July 2022.
Meanwhile, the vacancy rate in January was 2.52 percent, according to the report, the first time it’s fallen in nine months.
Janna Raskopf, from Douglas Elliman, told CNBC in January that there was a ‘geyser of demand’, adding: ‘I’ve been doing this for 14 years and it’s absolutely unprecedented.’ The surge was partly driven by college graduates moving to Manhattan, Raskopf added.
In fact, demand was so high that the record-breaking list prices were just the ‘starting point’, and renters were expected to pay over the odds to secure an apartment. One two-bed recently listed by Raskopf for a cool $12,000-a-month was toured by 26 prospective tenants, who were expected to offer about 15 percent more than the asking price.
But are people really flocking back to the city? A report by Curbed suggests not. Writer Lane Brown undertook an in-depth analysis of USPS’s database of change-of-address requests and discovered there actually appeared to be a net outflow.
The net outflow of residents in 2022 was 97,794, the report said, adding that while it’s not a surefire way to calculate relocation trends, it gives a reliable gauge and also tallies with census data that shows NYC’s population has been falling since 2016.
The finding is at odds with claims by city officials including former Mayor Bill DeBlasio, who left office in December 2021, that New York City’s population was growing. Analysists have also said New York had ‘one of the largest declines in the first stage of the pandemic and one of the fastest rebounds’.
Social media sites such as TikTok have been abuzz in recent months with posts from prospective renters about the hellishly high prices.
One $1,200-a-month apartment for rent in NYC was likened to a broom cupboard. It’s 9ft by 6ft and doesn’t even have its own bathroom or kitchen – they are shared with other occupants of the building
A modest two-bedroom apartment in Manhattan’s East Village was listed for a staggering $8,000-a-month in 2022. Realtors claim there’s unprecedented demand, but some data suggests more people are leaving New York City than moving there
The $8,000-a-month East Village apartment boast two bedrooms, but one is so small that it’s described as ideal as an office to work from home
This ‘apartment’ – one room with no private bathroom or kitchen – is listed for $2,000-a-month
Examples include a tiny ‘studio’ apartment likened to a broom cupboard for $1,200-a-month. It measures 9ft by 6ft and doesn’t even have its own bathroom or kitchen – those are shared with other tenants in the block.
Another ‘studio’ for $2,000-a-month, likened to a ‘jail cell’, also doesn’t include a private kitchen or bathroom.
One modest two-bedroom apartment in the East Village, Manhattan, was priced at a staggering $8,000-a-month.
Some renters have also been forced to move out of their apartment after their landlords doubled the rent costs following cheap deals during Covid. Kelsey Barberio, 27, from New York City, revealed in December that her landlord said her rent would be raised from $2,100 to $4,175.
The Cubed article points out the practice of ‘warehousing’, where landlords keep some apartments off the market to give the impression of a shortage. They then charge an inflated rate for the apartments which are available.
A report by Douglas Elliman showed that rental costs in Manhattan were nearly $4,100-a-month in January. The number of new leases has increased month-on-month, but remains far lower than during the pandemic, when many people left the city
Real estate experts also say landlords of rent-controlled apartments – which are subject to city-imposed limits on price hikes – can also be left empty.
Evan Ruger, a former NYC broker who now runs a real estate company operating in New York state, gave the example of how a landlord might opt against carrying out essential renovations to a rent-stabilized apartment that’s empty, because the cost will outweigh the gains from renting it out again.
Ruger told DailyMail.com the post-Covid surge in rent prices didn’t seem to be a ‘fair reflection’ of the current market.
As for whether the increase in rent costs will continue, he said the problem can only be fixed by building more apartment blocks to increase the supply.
‘It just becomes a question of what outpaces: Adding more apartments to the market, or how many people are moving to New York, which is less, I think, than previous years,’ he said.
‘It seems crazy, but I can’t really imagine [rents] going down. I think it will stay at where it’s at, or increase slightly.’