OPEN APP
Home / Politics / News /  New York rents jump as Covid-19 pandemic discounts fade

The high-rise building Isabella Alvarez and her roommate found on Wall Street featured a rooftop terrace, a doorman and a basketball court. A two-bedroom apartment there was renting for about $3,500 a month. But during the pandemic, the landlord offered three months free, reducing the average monthly price to $2,600.

With her one-year lease expiring in October and the market heating up, the landlord raised the rent back to $3,500 without offering any month of free rent. “It’s thrown us for a loop because we really found our home here," Ms. Alvarez said. She is now looking uptown for something more affordable.

Apartment tenants fled Manhattan in droves for cheaper or bigger spaces during the early months of the Covid-19 pandemic, driving up the vacancy rate from next to nothing to more than 11% by May of this year.

Those who stuck it out or moved to the borough were treated to some of the sweetest deals in the recent history of Manhattan real estate. Landlords served up months of free rent and other incentives just to keep their buildings partially occupied.

Some new lease signers seized on these offers to live for the first time in buildings with swimming pools, roof-deck grilling stations, golf simulators and doggy daycare services. Others took the opportunity to save money by moving to apartments that were cheaper than what they had before.

Now, many of those leases are expiring, and tenants are facing sticker shock. Those who want to keep their apartments with the latest amenities or located in stylish neighborhoods must absorb steep rent increases. The most ambitious landlords are attempting to raise rents by as much as 80%, according to Adjina Dekidjiev, a real-estate broker at Warburg Realty. Bidding wars—usually confined to the for-sale housing market—are breaking out for rental units in some sought-after neighborhoods, real-estate brokers said.

“It’s a horrible time to be looking for an apartment right now," said Kunal Khemlani, a broker at the Living New York firm.

The median rental price in Manhattan, including concessions, fell 22% on an annual basis in November of 2020, according to a report from brokerage Douglas Elliman and appraisal firm Miller Samuel Inc.

With more people returning to the city as they head back to the office and with colleges resuming in-person classes, pricing power has swung back to the landlords, according to renters and real-estate brokers. The median Manhattan monthly rent is up to $3,118, after bottoming out in November at $2,743, according to Miller Samuel.

Some Manhattan renters who signed these cut-rate leases prepared themselves for the possibility of paying significantly more this year. Others figured if the pandemic’s fallout lingered, they might be able to renew at nearly the same price.

Joe Weinberg and his roommates seized on Covid-19 discounts to rent a four-bedroom apartment in a neighborhood near Columbia University. Mr. Weinberg said he had some reservations about the move. But his roommates persuaded him to go along, pointing to the reduced rent and closer proximity to downtown than his previous neighborhood. They agreed to a one-year lease for $2,917 a month.

This year, the landlord wants $3,575. “It didn’t really hit me that they would be able to totally take away the discount they had given us," said Mr. Weinberg, who wrote a letter to the building’s managers pleading they not increase the rent by 23% this fall. The landlord responded with one month free rent, he said.

In other boroughs, some renters have been through a similar experience. In Long Island City, Queens, film and video producer Mariana Avelino said she faced a $400 a month increase for the studio apartment she had rented at a discount last year. She said she gave a counter offer, asking the landlord for one month of free rent. The company agreed to a half-month free concession, which Ms. Avelino said she was happy to take.

“Everything in this area is way more expensive and smaller compared to my current unit," she said.

Still, there are signs of landlord overreach. In August, 11.1% of New York City rentals were advertised as discounted in some form, according to listings website StreetEasy. That is down from 31.2% a year ago. But it was up from 9.1% in July. The slight rebound could mean that some landlords were too ambitious with their price increases this summer and have made adjustments, said StreetEasy economist Nancy Wu.

Manhattan renters had also been paying fewer rental broker fees during the pandemic. That, too, is eroding. Sixty-eight percent of rental listings on StreetEasy in September were advertised as “no fee," down from 81% in April.

Tenants who signed a Manhattan lease in the summer or fall of 2020 and are now searching for an apartment need to manage their expectations, advised Corcoran Group broker Eric Shostak. He is aiding Ms. Alvarez and her roommate with the apartment search.

“It’s not going to be anything like what they had," Mr. Shostak said.

Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.

Never miss a story! Stay connected and informed with Mint. Download our App Now!!

Close
×
Edit Profile
My ReadsRedeem a Gift CardLogout