New York is known to be the most expensive city in the world. Over the past few years, residential prices have increased 33 percent on average from December 2009 through June 2017, according to a Streeteasy report.
As rents increase twice as fast, wages remain stagnant. Many New Yorkers either don’t make enough annual income to obtain an apartment, or don’t have the sufficient credit. Many are forced to double their checks to make up for the monthly rent, making it difficult to save for other necessities, such as healthcare, education, or even a down payment toward a home.
Due to this, many real estates agents aren’t making sales or residential profits, resulting in a downfall in the stock market as well.
“New York City residents who are earning the least amount of money are experiencing the greatest competition for housing and the steepest rent increases,” said StreetEasy Senior Economist Grant Long.
But how are rent prices determined?
The New York Rent guidelines state that the market rate, apartment rental rates, and lease terms are negotiated between the owner and tenant. The NYCGB determines rent increases for lease renewals of rent-stabilized apartments, lofts, hotels, and single-room occupancies.
Another factor that affects increases is the location of the property, whether it is close to a train station, shopping areas, or even its proximity to Manhattan.
The increase on market rate units are entirely left to the discretion of landlords, as they weigh potential profits against the possibility of losing reliable tenants and the cost of vacancy. As for determining what the market rate is, small landlords say they do various things, from looking through nearby listings, to asking neighbors and visiting open houses.
According to a New York Times article, “The Rent Stabilization Association, a landlord advocacy group, says that 70 percent of its 25,000 members are small-property owners, who have one or two buildings with no more than 48 apartments in each.”
Many New York apartments are placed under controlled and stabilized rent. Controlled apartments are generally a prized possession in the city. Rent-controlled apartments have only applied to people who live in a building built before 1947, and have been living there since 1971. These apartments are mostly occupied by the elderly or their lawful successors. There is a very small percentage of these apartments on the market. So, for those of us who are hoping to land a rent-controlled apartment, chances are we’re out of luck.
The advantage of having a rent-stabilized apartment is the limitation a landlord has on the rent increase each year, and the guaranteed right to renew the lease.
Although the program helps to maintain a stable rent for those units, it still doesn’t help the increase in rents across the city.
According to an article of Curbed New York, “Mayor Bill de Blasio’s initiative to create and preserve 200,000 affordable units by 2024 as well as the tax incentives given to developers of pricey rental projects who set aside some units as affordable housing.”
Even with that set plan, it still isn’t enough.