Record Vacancies Trigger Renters’ Market
Izzy Falkovich, 23, had not expected to leave her Washington Heights apartment when her lease ended in June. But when her roommate showed her the low prices advertised for apartments with more amenities and in better locations, she began to look.
Just days after driving back to New York from their respective quarantine locations in Massachusetts and Connecticut to tour apartments, Falkovich and her two roommates signed a lease. Their new apartment, situated further downtown, was closer to both public transportation and Riverbank State Park, boasted a rare in-unit washer and dryer, and had a price tag that was $35 less per month for each roommate.
Falkovich and her roommates are not alone in their mid-pandemic apartment search success. Landlords across the city have been forced to make more concessions, including offering one or several rent-free months, as the vacancy rate continues to rise. About 54 percent of new leases in New York City were signed with some sort of landlord concession in August 2020, according to a Douglas Elliman market report, the highest number of concessions in the last nine years. Prospective renters also had far more options than a typical August, with available listings up 166.2 percent in Manhattan, up 130.5 percent in Brooklyn , and up 78.3 percent in Queens over the same period last year. New leases were down about 24 percent from last year across the city. The abundance of options and relatively low number of prospective tenants has created an unusually favorable market for renters.
“The tenant has much more say because the landlords have been hit hard,” said Jonathan Miller, President and CEO of Miller Samuel, Inc., a real estate appraisal firm that prepares market reports for Douglas Elliman.
Landlords have been so unusually willing to grant concessions and negotiate with renters in part because vacancy has continued to rise throughout the pandemic, hovering at about 5% in Manhattan in August, according to the Douglas Elliman report. The rising vacancy rates across the city can be attributed to high unemployment and a sprint to the suburbs, said Miller. While universities declined to provide student location data, Columbia University shifted all undergraduate courses to be taught online for the fall, while New York University and Fordham University have given students the option to take their courses online, likely contributing to the decrease in renters.
Studio and one bedroom apartments rental prices have been the most affected by the pandemic downturn. The median cost of studio apartments in Manhattan decreased 7.4 percent from last year, and the median cost of Manhattan one bedroom apartments dropped 8.2 percent, according to the Douglas Elliman report.
Miller said that as long as vacancies continue to rise, he believes renters are likely to continue to have the upper hand.
“I see this pattern sustaining for quite a while,” Miller said. “I don’t know what quite a while actually means, but I know it’s not a month or two.”
