Cecilia Flaherty, 45, had been happily settled in her Williamsburg, Brooklyn, rental apartment for four years when, one morning in early June, an exterior wall of her building collapsed into the street.
“There was an immediate vacate order and we pretty much had to move out in our pajamas that morning,” Flaherty says. Without warning, she and her 12-year-old daughter were dropped into one of the city’s most tumultuous rental market periods, with apartment prices that shape-shift with each coronavirus mutation.
Flaherty estimates she saw 25 rentals in a one-month span this summer while staying with friends in the neighborhood. “I was just dumbstruck,” Flaherty says, detailing apartments in her $3,000 per month price range with windowless, makeshift bedrooms and kitchens with little usable space.
Through a stroke of luck, Flaherty ended up assuming the lease of her friends’ apartment. She was on edge for the entire summer, not wanting to assume she could eventually take over the place for good.
She was enormously relieved, come the end of summer, when the lease officially became hers – even as she now pays more than what she budgeted for.
Whiplash in the rental market
Flaherty’s story speaks to how confounding it is to be a renter in New York, particularly over the past few months as rents continue to climb and the number of apartments up for grabs shrinks. If the early stages of the pandemic favored the renter – with bountiful apartments and incentives such as free months or waived amenity fees – that period has run its course as people continue to make their way back to the city (and even the Omicron variant hasn’t slowed the New York rental market).
Between December 2020 and December 2021, the city’s median asking rent made its largest year-over-year gain since the pandemic began, from $2,500 to $2,800, according to data from StreetEasy.
In December 2021, Manhattan’s median rent, with incentives factored in, reached a new record for the month at $3,392, reports the real estate company Douglas Elliman. The same report showed a similar pattern in Brooklyn. In both boroughs, the availability of rentals on the market fell at record rates for the month.
The whiplash of the pandemic-era rental market has precedent. “In the initial years following the global financial crisis, New York City saw lower rents and greater affordability,” says Jonathan Miller, founder of the real estate appraisal firm Miller Samuel Inc. Both then and now, what Miller calls the creative class pushed the city into recovery mode, sensing opportunity among the lower rents “until development catches up and prices them out”.
The concessions that have characterized the pandemic-era rental market are also beginning to disappear. In the first quarter of 2021, nearly 34% of apartments – the highest share in the city’s record – came with one or more months of free rent. In December, that figure was 16%, similar to the few months predating the onset of the pandemic. The StreetEasy economist Nancy Wu predicts that when these apartments return to their gross rent this quarter, many renters who can no longer afford them will be forced to move.
“We’re going back to a time when trade-offs have to be made,” Wu says. “Living in New York City has always been about trade-offs between having your ideal neighborhood versus number of bedrooms, space, or desired amenities.” Renters who shed roommates during the pandemic may have to regain them, she says, and those who leveled up to a more desirable neighborhood might have to move further afield.
The effects of the pandemic on the rental market have been particularly acute in Manhattan, where rental prices were the most affected and vacancies the most abundant. “The Manhattan rental market is the most polarized I’ve ever seen it,” says Miller, whose firm tracks the market for Douglas Elliman, citing the divergence between median rents in doorman and non-doorman buildings, which he uses as a proxy to distinguish the high end of the market from the low end.
“At the high end, you’ve got bidding wars and a faster paced market,” Miller says. “The bottom fell out of the Manhattan rental market at the lower end. Lower-wage earners were hit far harder during the pandemic.” But that doesn’t mean a Manhattan rental is an easy get these days. According to data from Douglas Elliman, where in December 2020 there were 24,794 rentals on the market, in December 2021 there were just 4,753 available.
‘You can’t have the life you envisioned’
Like many renters, Raven Monroe left Manhattan at the onset of the pandemic and moved back in with her parents in North Carolina. Monroe, 27, had been renting a $2,200-a-month one-bedroom in the East Village while working as a teaching artist. When the pandemic halted gatherings and lockdowns went into place, she left her rental behind to begin a period of remote work and saving.
Monroe, who is still in North Carolina, says she now feels like the right time to return to the city has passed as rents climb. Looking for an apartment remotely has also proven to be a challenge, given the speed with which rentals are plucked off the market.
“A lot of my friends and I all feel like we’re struggling. I have a master’s degree, and a lot of the people that I know have advanced degrees, and it doesn’t seem to matter,” Monroe says. “We can’t find employment that matches our education, which means we also end up living in these situations that are very college-like. It makes you feel like you can’t have the adult life you envisioned yourself having.” Monroe plans to return to Manhattan soon to stay with friends until she finds a suitable apartment.
Between August and December, the citywide share of rental vacancies dropped from about 41,400 units to 24,413, according to StreetEasy. “Renters are starting to feel like there’s no good inventory left,” says Keyan Sanai, a leading rental broker with Douglas Elliman.
Meanwhile, New York’s eviction moratorium was lifted on 15 January, removing the protections that kept countless New Yorkers housed during one of the most economically challenging periods on record. Stephanie, 52, who declined to share her last name, says the eviction moratorium allowed her to stay in her South Bronx apartment since eviction proceedings began in 2019. She has been seeking an apartment with her rental assistance supplement from the city, but she says that in the past two and a half years, she hasn’t had the opportunity to formally apply for any – even after the value of her voucher was increased to $1,945, or market rate, in early September.
“When they find out my income is public assistance and a voucher, my application doesn’t get anywhere,” Stephanie says. “I sometimes explain to them it’s a source of income discrimination but it doesn’t matter. I’m just very dejected.” (Income discrimination is illegal.)
On 16 December, the mayor’s public engagement unit launched an initiative with StreetEasy to educate New York property owners, brokers and agents about the value of leasing to voucher holders. Almost 84,000 eviction filings have been made in New York City since March 2020, according to data from Princeton University’s Eviction Lab.
Although Wu predicts that though vacancies will increase in the spring, there are uncertain months ahead, and renters are already feeling left in the lurch.
“There’s an ominous feeling amongst renters that, because they are hearing from their friends that there’s nothing out there, they just re-sign their contracts,” says Sanai, the rental broker. “They don’t even think about it. Their landlord wants $400 more per month? They re-sign.”
