Report: Surging NYC rents displacing tenants who got discounts early in the pandemic

Report: Surging NYC rents displacing tenants who got discounts early in the pandemic

The posture of landlords has since changed.

“Landlords have been raising rents more aggressively on units they leased during the pandemic in effort to recoup the earnings they lost,” the analysis reads. “On average, rentals that were listed in 2020 or 2021 and relisted in Q2 2022 showed a 20.4% increase in asking rents per year.”

A separate report from Douglas Elliman and Miller Samuel showed the average rent in Manhattan surged past $5,000 in June, a record-setting high.

Disappearing discounts

The number of available rentals in Manhattan rose last quarter compared to the first three months of 2022, according to StreetEasy. But roughly 44% were likely driven by renters leaving their homes in the absence of earlier discounts.

“It’s also possible that some tenants decided to leave for non-financial reasons but would be faced with one of the most competitive rental markets in more than a decade,” the report reads.

Many of those tenants are now seeking more affordable options in Brooklyn and Queens.

“We’re hearing in our district — in north Brooklyn and east Brooklyn — that residents are being hit suddenly with massive rent increases that they can’t afford, and as a result they’re having to relocate again,” Salazar said.

As the city has slowly reopened, the real estate landscape has turned with it. Lines of apartment viewers have been captured in footage shared on social media in recent months. The surge in demand for rental housing has also proven difficult for brokers to keep pace with.

Brandon Abelard, a real estate salesperson with Compass, one of the country’s largest brokerage firms, said he has stopped doing open houses. Instead, he limits showings to an appointment-only basis because of the delay of prospective renters.

“I have a few rental listings myself, and it is quite overwhelming,” said Abelard, whose rental listings are largely based in Brooklyn and Queens. “The amount of inquiries I get per apartment — I can tell you I have about 10 of them, and I received over 250 emails in about two days for each apartment. Some of them are getting close to 350 emails over a weekend.”

A ‘good cause’ bill

The StreetEasy analysis shows the number of units in Queens declined by 9% from the previous quarter. Meanwhile, median rent in the borough soared by 13%, compared to a quarter earlier. Available rentals in Brooklyn increased by 5%, but median rent climbed to $3,200 — a 12% jump.

“Unfortunately, the recent improvement in rental inventory has been largely driven by households being priced out of increasingly unaffordable rentals,” the analysis reads. “In addition, as interest rates rise, more would-be homebuyers may be forced to resign themselves to renting, pushing up the demand for rentals even further.”

The “good cause” bill pushed into Albany would entitle renters to lease renewals unless they failed to pay rent, caused nuisance or violated the terms of their lease. It would also give market-rate renters similar protections to those living in rent-stabilized units — by installing safeguards against price increases deemed “unreasonable.”

Under the measure, increases of more than 3% of the previous rent, or 1.5% of the Consumer Price Index, which ever is higher, would not amount to “good cause” for eviction.

Salazar said she is continuing to fight for these protections and pressed for more urgency from elected officials around the issue, including from Gov. Kathy Hochul.

“Even though the legislature isn’t in session right now, I think it’s urgent that we return as soon as possible and that in the new session, we really need to prioritize passing this legislation to protect all the renters who don’t even have the protections of rent stabilization or rent regulation” Salazar said. “If we fail to act, we will continue to see this displacement.”

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