Rent Prices Soar in Manhattan and Brooklyn Despite Economic Challenges

Despite the slow economic recovery and a population still below pre-pandemic levels, rents in Manhattan and Brooklyn continue to break records, in contrast to national trends of stabilizing or declining prices.

According to the Elliman Monthly Report, at the start of the pandemic, the median rent in Manhattan had reached $4,385. Following an exodus, a year later it fell 15% to $3,650.

However, since then, new rent has skyrocketed, reaching $5,470 in June, 30% higher than February 2020.

Brooklyn shows a similar if less extreme trend. In February 2020, the median rent was $3,442; today it is $4,087, 20% higher.

Why is rent going up in New York?

These increases are not explained by population growth. The city lost 400,000 people between 2020 and 2022 (although this could be exaggerated). Manhattan and Brooklyn dropped 80,000 and 130,000 people respectively.

Although the population has grown in the last year, especially in Manhattan, it is still smaller than before.

Although the city recovered almost all the jobs lost during the pandemic, the nation saw employment grow by 4 million, or 3%.

Experts agree that there is no single explanation. Among the reasons are: the exodus and return altered normal patterns, benefiting owners. Remote work and digital nomads increased demand.

In fall 2022, Fed rates slowed purchases, increasing rental demand, and services like Airbnb keep units off the market.

Experts believe that rents will stabilize and perhaps fall

The accelerated departure of couples with children under 5 years of age, for better schools or space, affected. Analysis by James Parrott shows decline in workers aged 25 to 34 and parents with children under 4 years of age.

Remote work fueled demand for larger apartments, exacerbating the trend for smaller homes.

Although prices are unsustainable, reasons such as speculation, workers looking for more space and scarcity contribute to increases.

As more buyers rent, rent-regulated units remain empty. Preferential rental agreement kept tenants in place, and Airbnb increased short-term supply.

Supply of new homes decreased due to changes in tax incentives. During 2023, only 30 multi-family buildings started construction each month, compared to 83 in 2022.

Mayor highlights need for construction incentives as city exceeds affordable housing targets. REBNY seeks programs to increase supply.

Although multiple factors explain rent increases in New York, the outlook indicates stabilization and possible decreases. The dynamics in the rental market continue to be the focus of attention in a city in constant evolution.

YouTube de Caleb Simpson

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Alaina Randazzo, a young woman from Manhattan, showed her 80-foot apartment, the size of a car park, or a closet to YouTuber Caleb Simpson. It is perhaps the smallest in Manhattan.

Credit: YouTube Caleb Simpson.

Caleb Simpson YouTube channel

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Simpson, who specializes in filming videos of unusual homes, expressed his surprise at seeing every corner of this Manhattan apartment.