The New Yorkers are returning to the city; causing rents to rise extremely high While during the epidemic New Yorkers left the city for an unknown period of time, once the pandemic subsided, locals have been returning to the city, and the result is a lack of apartments for rent and a sharp increase of rental prices. A similar trend is observed all over the US – data showing that the share of income required in order to finance rent has almost doubled.
According to a current report by Douglas Elliman real estate and the appraisal company Miller Samuel, the decline of COVID19 and the New Yorkers returning to the big apple after the epidemic has influenced rental prices, causing them to reach historic levels. The report shows that the average rent in Manhattan las month (January 2023) reached the price of 4,097$ – representing a 5% increase in comparison to the same month last year. Brooklyn, not far behinds with average monthly rent standing at 4,165 $- a 30% increase compared to January 2022. Northwest Queens also broke a record last month, with an average rental price of $3,369.
Workplaces demands for employees to return to work from the office has brought most of the New Yorkers back to the city and in search for apartments, resulting in rental prices climbing in all neighborhoods. The amount of people returning to the city and the shortage of apartments available for rent caused the prices to rise- up to a historic digit that the city did not know before. These factors combined led to a vacant apartment staying available on the market for a period that is approx.10 days shorter than the same period last year, lowering the percentage of vacant apartments in the city down to 2%. Although housing experts predict that rental prices will decline this year, the experts at Douglas Elliman do not expect this to happen in the foreseeable future.
According to a report by Moody’s Analytics published last month the rise in rental prices is not unique to NYC. American citizens across the continent are forced to set aside more than 30% of their monthly income in order to afford housing- the highest proportion seen over the past 20 years.
As per the director of economic research at Moody’s Analytics Thomas LaHsalvia, most of the Americans are now spending a significant portion of their income on housing The average American household continues “rather than on other essential purposes. to be under financial pressure,” Lahsalvia pointed out, “and this has consequences on
“.the quality of the life they live Data from the real estate agency Zillow, shows NYC at the top of the list with 68.5% of monthly income set aside for rent, followed by Miami, with 41.6% and $3,600 average and $3,190 average rent. .rent, and Fort Lauderdale, with 36.7%
Although only three states that have crossed the 30% -Massachusetts (32.9%), Florida (32.6%) and New York (31.2%), many other states also recognized a significant increase compared to previous years
For comparison, in the 1990’s an average household had to set aside about 23% of its monthly income for rent, and a decade ago about 25%. It is clear to see the rent-income ratio has climbed gradually over the years, with the most significant growth recorder These figures are recorded after decades where people were advised “after COVID19. not to spend more than 30% of their income on housing,” says Alia Muhammad, CEO of the apartment rental platform Openigloo , “In cities where the rent is high, this parameter is very difficult to achieve now”.
As a response to the new and unknown situation, on January 2023 the Biden administration released a draft of the Tenants’ Bill of Rights, its purpose being moderating the steep increase in rental prices and protecting the tenants. The fact that the federal government and the White House are talking about the need “
for a tenant charter and supporting it is very significant,” said president and CEO of the National Low Income Housing Coalition Diane Yantel. About 35 % of the population- which is over 44 million households in the US live in rent. Before COVID19, about 900, cases of house evictions occurred every year. The pandemic has led to new protections for renters- such as financial assistance, but these ceased to exist post pandemic. Now activists for underprivileged populations are demanding that the government take practical steps in order to assist the tenants.
According to data published in 2020- over 28% of the houses and apartments rented in the US are financed with federal funds. This data led the federal mortgage giants Fannie Mae and Freddie Mac to explore the possibility of establishing tenant protections .that will limit rent increases at properties that have received certain federal mortgages The data also led the Federal Trade Commission to examine ways to expand its actions against procedures that “unfairly prevent consumers from obtaining and holding
Also, The Ministry will allocate 20 million dollars for a designated program, “housing along with non-profit organizations and government agencies in order to prevent tenant evictions and provide legal assistance to low-income earners.
According to Yantel, the historic measures announced by the Biden administration will not solve the American housing crisis and a required in-depth treatment is needed such as establishing more affordable housing units, creating permanent assistance programs and establishing sustainable protections for tenants.
