New York City is known for its high cost of living, especially when it comes to housing. But the pandemic and the mass exodus of residents to other states have not slowed down the rent increases in the city. In fact, according to a recent report by Douglas Elliman and Miller Samuel, the average rent in NYC has reached new highs in July 2021, surpassing the pre-pandemic levels.
Manhattan Rent Breaks Records
The report, which covers the rental market in Manhattan, Brooklyn, and northwestern Queens, shows that the average rent in Manhattan was $5,588 in July, up 9.3% from a year ago and 2.2% from June. This is the highest level since the report began tracking the data in 2008.
The median rent, which is the midpoint of all rents, was also at a record high of $4,100, up 10.7% year-over-year and 4.6% month-over-month. The vacancy rate, which measures the percentage of available units, was 3.67%, down from 4.72% in June and 5.07% in July 2020.
The report attributes the rising rents to the strong demand from renters who are returning to the city after the pandemic lockdowns, taking advantage of the incentives offered by landlords, such as free months and waived fees. The report also notes that the supply of rental units has declined as some landlords have converted them to condos or co-ops, or sold them to investors.
Brooklyn and Queens Also See Rent Increases
The rental market in Brooklyn and northwestern Queens also experienced rent growth in July, according to the report. The average rent in Brooklyn was $4,347, up 11.9% from a year ago and 6.4% from June. The median rent was $3,400, up 14.9% year-over-year and 6.3% month-over-month.
The average rent in northwestern Queens, which includes Astoria, Long Island City, Sunnyside, and Woodside, was $4,003, up 16.8% from a year ago and 9% from June. The median rent was $3,200, up 14.3% year-over-year and 6.7% month-over-month.
The report says that the demand for rentals in Brooklyn and Queens has been driven by the preference for more space and lower prices than Manhattan, as well as the improved transportation options and amenities in these areas.
Renters Face Affordability Challenges
While the rising rents may be a sign of recovery for the city’s economy and real estate market, they also pose affordability challenges for many renters who have been hit hard by the pandemic’s impact on jobs and incomes.
According to a study by StreetEasy, a real estate website, nearly half of New York City renters spent more than 30% of their income on rent in 2020, which is considered a burden by housing experts. The study also found that one in four renters spent more than half of their income on rent, which is considered severely burdened.
The study warns that these renters are at risk of eviction or homelessness if they lose their income or face unexpected expenses. The study also calls for more government assistance and policies to help renters cope with the high cost of living in the city.