How to Outsmart NYC’s Post-Pandemic Rise in Rents

At the onset of COVID, rental rates in NYC took a nosedive. According to Streeteasy, the average rent dipped below $3,000 for the first time since 2011. This was in October 2020, when the new median rental price decreased to $2,750. Toss in some move-in concessions from landlords, such as one or two months of free rent, and renters saw even more savings.

Fast forward one year later when thousands of New Yorkers returned to the concrete jungle after many months of remote work at home, thanks to widely available vaccines and eased COVID restrictions. As demand for housing increased, so did pricing.

NYC’s Post-Pandemic Rise in Rental Prices

Today, rental rates in NYC are rising across the board, from apartments in mid-range properties to luxury units in full-service buildings.

According to Emily MacDonald, a PR Specialist for Streeteasy, “prices in buildings with high-end amenities are rising more quickly than those without any extra amenities like a doorman, gym, or pool.”

It’s a subtle difference, however, with price increases in the luxury tier averaging six percent compared to four percent for bare-boned spaces — not too shabby for apartment buildings that don’t come with a doorman staff, laundry facilities, or even an elevator.

Rent Concessions in NYC Are On the Way Out

In addition to driving up rent prices, demand for housing has caused many landlords to rethink their concession strategies.

“Landlords were generous with concessions throughout the pandemic, but now that we’re post-pandemic and COVID restrictions have been lifted, landlords are extremely hesitant to offer any type of rent abatement,” said Eric Benaim, CEO and founder of Modern Spaces NYC.

Because NYC’s rental market is anything but hidebound, it famously adapts to shifting financial conditions quicker than most housing markets in the nation. One example dates back to the stock market crash of 2008.

To lower vacancy rates across the five boroughs, landlords not only began to offer concessions like months of free rent. They also threw in gift cards as move-in specials, many of which were valued at $500 and $1,000. They also paid broker fees equal to one month’s rent, known on the back end of deals as “OP” (meaning, “owner pays.”)

But when the economy got better, landlords withdrew their incentives, just as they’re doing now that COVID restrictions and vacancy rates are dwindling.

How to Outsmart NYC’s Post-Pandemic Rise in Rents

Now that concessions are once again becoming a thing of the past, renters should take a page out of the history books and plan accordingly.

Those returning to NYC face an aggressive hike in rental prices, but this shouldn’t discourage them. After all, it doesn’t hurt to ask landlords or their managing agents if asking rents are negotiable. They’re called “asking rents” for a reason.

Another tactic for renters, especially those who are facing long-term lease renewals without additional concessions, is to offer a fair rental price in exchange for a lease that expires in the spring and summer peak season. This can be a lucrative offer for landlords who are carrying a large volume of leases set to expire in the winter months when vacant apartments tend to sit longer on the market.

Lastly, given the unpredictable nature of COVID, it might be worth signing off on a higher rent if the landlord is willing to include a special lease rider granting renters some recourse should they face insolvency as a result of a future economic downturn.

For more information on how renters can outsmart NYC’s rise in post-pandemic rents, reach out to an Elegran advisor today!