NYC Rental Market Pushed to Breaking Point by Covid shutdown

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NYC Rental Market Pushed to Breaking Point

Bloomberg

Covid-19 is pushing New York City’s affordable housing crisis to a breaking point.

Look at 25-year-old Jessica Lee and her husband, who needed four roommates to afford their $4,000-a-month four-bedroom apartment in Brooklyn’s hip Bedford-Stuyvesant neighborhood, a relative bargain in the Big Apple. Now her husband and everyone else in the house have all lost their restaurant jobs and she’s the only one still working—at a company making hand sanitizer. The landlord is threatening legal action to collect the $20,000 in back rent. “Nobody is hiring in the food industry,” she says. “I’m on the hook, because I am the only employed person on the lease.”

Two-thirds of New Yorkers rent their homes, making it America’s biggest rental market, and it’s always had its own crazy kind of housing math. But with unemployment soaring and the typical rent about twice the national average, the numbers no longer add up. A quarter of the city’s apartment renters haven’t paid since March, according to the Community Housing Improvement Program (CHIP), a group that represents mostly landlords of rent-stabilized buildings.

Some landlords, with their own bills to pay, are running out of savings, so the city is bracing for hundreds of millions of dollars in delinquent property tax payments.

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In New York and other densely packed cities, people who can work remotely—predominantly office workers—are moving to the suburbs if they can afford it. But many renters can’t. They include the poorest and most vulnerable people, particularly minorities and immigrants, documented and undocumented. Among them are also millennials with multiple roommates.

These are the people who keep places like New York running every day, sometimes at great risk to themselves. They also have the highest unemployment rates. A majority of renter households are stretched, paying at least a third of their income on rent. More than 700,000 of them lost income as a result of the pandemic, according to New York University’s Furman Center.

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For landlords, the problem isn’t just nonpaying tenants. It’s harder to find replacements for the ones that are leaving, says Dondre Roberts, an agent with brokerage Nestseekers International. A landlord he represents near New York University in Manhattan now has a 17% vacancy rate because college students are waiting out the pandemic at their parents’ homes instead of returning to school and their apartments, he says.

“Typically a studio would go for $2,600, but now it’s $2,300,” Roberts says. “A lot of landlords are offering one month free rent, and they’re paying the broker fee. It’s a tenant’s market.” Of course, tenants with jobs are getting harder to find.

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