How brutal is NYC’s rental market? Just ask this producer.
How brutal is NYC’s rental market? Just ask this producer.
Have you ever fallen in love one day only to have your heart broken the next? If so, then you probably have a fair idea of what it’s like to apartment hunt in New York City.
In case you haven’t heard, New York City’s rental market is … bonkers. A report by real estate company Douglas Elliman found that average net effective rents in Manhattan were north of $5,000 in August. Over in Brooklyn, where this poor soul recently apartment hunted, the net effective median rent jumped more than 27% yearly to $3,464 — the highest on record.
Let’s just repeat that for added measure: The rent that folks paid in Brooklyn jumped more than 27% in just one calendar year. And those dramatic increases aren’t just relegated to New York. Nationwide, median rents rose 9.8% in August, which is down from a peak this past winter.
In New York City, as pandemic deals have expired, people priced out of their apartments were driven into new ones, giving landlords a chance to raise rents even more. This has boosted competition in an already tight market, further driving costs.
“I’d characterize the market as nearly at a breaking point for what we've been seeing in the last six months,” said Jonathan Miller, a housing analyst with the appraisal firm Miller Samuel. ”For the last four or five months, one in five apartments in New York City is leasing above the landlord's asking price. It's bonkers. That's not a sustainable condition.”
Bonkers, not sustainable, and a breaking point — that’s the environment that I found myself in last month when I went apartment hunting in Brooklyn with two roommates (and a corgi) in tow.
The old apartment
I moved to New York City around September 2021. Ever the enemy of good timing, it was just after many of those dreamy pandemic deals began to expire.
With two roommates, we paid $2,850 for a three-bedroom, one-bath apartment situated near the intersection of two very busy roads in Crown Heights, Brooklyn. It was a fine first place but had a lot of road noise, little natural light and a bathroom ceiling with a tendency to chip, peel and flake off.
When our lease came up for renewal — with an increase of $200 per month — we were convinced we could find something better. So, the hunt was on.
The wishlist
What we needed: An apartment that was dog-friendly, particularly elderly dog-friendly (meaning nothing above the third floor without an elevator) and commutes that were roughly 45 minutes or less. Aside from that, our wants were largely what most people want in any living space: Decent natural light, bedrooms that could fit a bed and a desk, a location near reliable subway lines, a bit of (or at least close to) some green space and enough space for a dining table (if even a small one). The dreams? A dishwasher and in-building laundry.
The rental pressures
As an organization fanatic, my first tactic was to create a spreadsheet that included links to listings, neighborhoods, nearby subway lines, price, move-in dates and various amenities.
But just about when we started perusing all of the usual listings sites for available apartments — StreetEasy, Craigslist, Compass, HotPads, Zumper — it became evident that we likely would have to be flexible with our budget, especially if we wanted to stay near Crown Heights. That’s because high rent prices in Manhattan over the past year have increased demand in Brooklyn and Queens, according to StreetEasy economist Kenny Lee.
“Renters are looking for places in neighborhoods farther out in Brooklyn because working from home is really giving them the ability to live elsewhere,” he said. “But I also want to note that for many renters out there struggling with rising rents, this is really not by choice.”
Another source renters can blame for the added competition? The Fed, as it tries to rein in inflation through interest rate hikes.
“The increase in mortgage rates has left many, many people who might have bought unable to really afford that,” said Vicki Been, a law professor at NYU and faculty director of NYU’s Furman Center for Real Estate and Urban Policy. “And so they're staying in the rental market, and that's putting pressure on the rental market in general.”
All that is to say, more competition was headed my way. I penciled in showings in whenever I could: When I went out for a coffee, during my lunch break. I even showed up to one tour drenched in sweat, convinced I could squeeze it in partway through a run.
The hunt
We cast a wide net and, man, did we catch some dead fish.
There was the Upper West Side Gem: A rent-controlled 3-bed, 1-bath on West 95th that had SubZero appliances, an elevator and a doorman, priced at $3,500. Yes, it was outside of Brooklyn, but what a deal! I reached out to the broker, who told me the first open house would be on Thursday, and we readied application materials to jump. But alas, someone signed for it sight unseen, and the apartment was gone by Tuesday evening.
Then, there was the Bergen Street House of Horrors. As no one had paid the electricity bill, the tour was lit only by my phone flashlight. The apartment had an oven backing onto the staircase that led to the lower level and two (windowless) bedrooms downstairs. There were also two locked, old-timey wooden doors; one of the locked doors featured no door handle. When I inquired what was behind the other, the broker unlocked the door, opened it a crack, replied “Oh, just storage,” before hurriedly shutting and locking it again. My guess is that it was the final resting place of some sad sap who took one step too far in some horrible baking accident.
All of this was coupled with the usual charcuterie board of New York City apartment quirks — bedrooms only accessible through other bedrooms, buildings that hugged fire stations (and in one case a funeral home), showers with enough mold to be considered science fair experiments and floors that would give marbles a run for their money.
Still, I consider myself lucky in the hunt. It could have been a lot worse and wasn't anything like the horror stories I prepped myself for.
“You've got people bidding against each other people, you know, 50 people showing up for an open house — that kind of thing. It's crazy,” said NYU’s Been.
The hits
All told, I ended up touring about 15 apartments, the vast majority of which were busts. But there were a handful that seemed promising.
The (Laughable) Loft - $3,350, with no broker’s fee
From the listing: This two-bedroom with a lofted space seemed to be a winner. We preemptively asked for application materials, because it seemed like a great fit: hardwood floors, a spacious kitchen and a single bathroom with a double sink. It was located on Franklin Avenue, near restaurants and coffee shops we love. It was also close to the S/2/3/4/5 subway lines. Located above a pharmacy, the listing also mentioned it had exposed brick and French doors.
From the tour: Ah, everything is not as it seems. The finishes were probably nice when the place was renovated a few years back, but up close, it had seen better days. I also initially volunteered to take the lofted bedroom, which overlooked the main living area. Not the worst thing in the world, but the fact that there was no central air and no openable windows meant that it got toasty. Plus, you can only stand up straight in the loft if you were five-foot tall. Oh yeah, and the exposed brick and French doors? Nowhere in sight.
The Cozy Three-Bedroom - $3,850, with a one month’s broker’s fee
From the listing: Built in 1930, this real three-bedroom features exposed brick, has central air and is rent-stabilized. It’s cozy but has ample closet space and enough of a living area to feature a real dining table. Sandwiched in between the A/C and 3 subway lines, it also had in-building laundry.
From the tour: Really solid! The space felt warm and homey and featured decent natural light. The bedrooms weren’t terribly huge, but the common space was as ample as the listing provided. It’s a great location, but the real killer was that it was a fourth-floor walk-up — not exactly senior citizen dog-friendly.
The Full Floor Find - $3,800, with a 10% broker’s fee + $85 pet rent
From the listing: Holy spacious. A living room, a dining room and four bedrooms! The finishings look pretty builder-grade, but I’ve come to learn that things like stock cabinets or bad paint are easier to work with than “quirks” like living rooms with no windows and a moldy shower. It has good curb appeal, is on a historic stretch in Crown Heights and even has a courtyard for our four-legged roommate. No in-building laundry or central air, but a block away from the 3 subway line and a short walk to the 2/5 as well.
From the tour: Spacious is right. The fourth bedroom, just off of the living room, is definitely small but could be used as a home office/guest room or sublet as a cheaper bedroom — which would make rent just a tad more than what we were paying out our old place. There’s a little bit of road noise, but nothing we weren’t already used to.
The results
Ding, ding, ding. We have a winner. With a 34-foot-long hallway near greenspace and decent public transit, the full-floor find won our hearts. Yes, it was pricier than we were hoping for, but there were only four units in the building, the first of which the super lived in. It was close to solid public transit, had a courtyard where our dog could run around to his heart’s content and could be made cute with far less time and effort than some of the rental money pits we saw. Plus, there’s a 24-hour coffee shop a block away. (That right there could have sold me alone.)
The costs
- Application fee: $20
- Broker’s fee: 10% of annual rent, or $4,560
- First month’s rent: $3,800
- Security deposit: $3,800
- Emotional toll of the whole process: TBD
Grand total: Just to get the keys and set foot in our very own apartment, we had to front $12,220. It was a shock to my midwestern sensibilities and public radio wages, but the peace of mind that came with securing a place was priceless.
The conclusion
I said before and I'll say it again: I consider myself lucky in all this. I found a solid apartment that (even a month into my lease), I still really love. It’s taking a little bit of time to put finishing touches on it, but it feels like home. Heck, I have a separate dining room in a New York City apartment. I’m living like a millionaire.
Yet the entire process has really hit home a lot of things I already knew to be true about living — and moving — in New York.
One, it is expensive. Tapping into the savings of three people made that $12,000 more feasible, but those high costs are an initial barrier to anyone trying to find an affordable place. And according to the August Douglas Elliman report, nearly one in five Brooklyn apartments were rented above asking price.
Then, there are systemic issues at play.
“We have a glut of apartments at the high end of the market and an extreme shortage of apartments at the low end of the market,” said Cea Weaver, campaign coordinator for Housing Justice For All. “That means that everyone is competing for those more affordable apartments and driving the price of these affordable apartments up even more.”
What’s more, fewer affordable apartments are being built because generally less housing is being built, said NYU’s Vicki Been.
“If you look at what New York is producing compared to, let's say, a Houston or an Austin or an Atlanta or an Orlando, it's astonishing. I mean, in 2021, New York City produced about 2.9 new housing unit permits per 1,000 residents. In Austin, it was 23.4,” she explained.
And even if rents begin to cool off a bit more as recent data show, that doesn’t necessarily mean rents will decrease. It likely means that rents will just increase at a slower pace — which, granted, is better than the eyebrow-raising hikes New York City has been seeing of late. But it's still a tough sell to folks when inflation outstrips wage gains for many and means costs are rising outside of housing.
The sources I spoke with largely agreed that New York City’s rental market is nearing a breaking point. But what will that point be? And what happens once we tip past it? For a city already struggling to adequately address homelessness and evictions, I worry.
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