We saw the number and it was just insane.
It's literally doubling what we're paying right now.
We never expected that much.
I mean, that was just a real shock to us.
This apartment is not worth $3,500.
There is nothing worth $3,500 in New York City.
Rents in New York City are at an all-time high.
In June 2022, citywide median asking rent reached $3,500.
That's about a 35% increase from 2021.
The median asking rent is $4,100 in Manhattan, $3,200 in
Brooklyn and $2,600 in Queens.
Half the renters in New York City spend more than 30% of their income on rent, and a third of renters spend
more than 50%.
My mom called me the other day and she's like, "You're 31, you should own property." And I literally said,
"With what money? Because it all goes to my rent."
In 2021, New York City surpassed San Francisco as the most expensive city
in the US to rent a one-bedroom apartment.
With the city entering the most competitive rental market in a decade, affordable housing is increasingly
hard to find.
I'm going to filter for two bedrooms, which is what I'm living in right now for $2,250, which is what I'm
paying right now in my current neighborhood.
And there's nothing.
Literally no matches.
Some renters who got pandemic discounts are seeing their rent increase by at least 30%
. For market rate apartments rent increases aren't regulated, meaning landlords can charge as
much as they think they can get on the open market.
My name is Kacie Cleary.
I'm 39 years old and my rent went up $700.
My name is Thelma Rose Annan.
I'm 32 and my rent increased $2,100.
My name is Ernestine Siu.
I'm 23 years old and my rent increased by $2,100 a month.
So what's causing these unprecedented rent hikes and is there an end in
sight?
New York has been expensive for a very long time.
And that has to do with demand, right?
People want to live here.
I saw an episode on Oprah with my mom about making a vision board.
So I made one when I was 17 before college, and I had New York on there in Manhattan.
Everything's here. You have all walks of life.
Anything you want, any cuisine you want.
You have Broadway, museums, everything.
Couple that with persistently low housing supply and you have a recipe for extremely expensive
city. After the pandemic hit in March 2020, New York City's population dropped by about
340,000.
Renters are fleeing New York City, leaving a record number of empty apartments in Manhattan.
And as vacancies rise, rents are dropping.
During this period, rental inventory reached levels not seen in over a decade.
The last time rents in New York had had such significant drop off was during the 2009 financial
crisis.
When the pandemic happened a lot of us millennials, Gen Z, we kind of laugh that we are
finally able to afford to live in the city that we love so much.
At the height of the pandemic, a third of listings in New York City were offering rental concessions in the
form of one month or more of free rent.
Being a landlord in the beginning of the pandemic was quite scary.
There were so many unknowns, and as New York City started to shut down, there was this concern, Well,
what about all of our units?
Are our tenants going to be able to pay rent?
What's going to happen?
We have a lot of expenses as small landlords, our mortgages, our city
bills.
Ernestine, a recent college grad from California, moved to New York in January 2021 to
start her first job for CNBC's "Fast Money".
New York City was empty at the time.
People were away from the city.
She and her roommate found a two bedroom apartment in Manhattan's East Village for $2,250.
We actually got a great deal.
I believe we got like a month or two off of the rent.
So our rent was actually discounted.
And also our apartment has in unit washer dryer, which you don't find a lot in New York City unless you're
paying a premium.
Kacie and her husband had been living in their Upper East Side one-bedroom apartment since 2015 and received
a $450 rent cut during the pandemic.
We really strongly considered moving out and finding a new apartment, something with better space for the
same price.
But our landlord actually came back and said we'll lower the rent to X amount, so we
were pretty happy.
Thelma has been living in New York since 2018.
In 2020, she reached a personal milestone and got her own one-bedroom apartment.
So I found this apartment on StreetEasy for $1,882, and it was a one bedroom.
And I thought that was an incredible price because you can never find that in New York.
So I instantly jumped on to it and then it increased to $2,400 the next year.
There's been a lot of times where I had oatmeal for dinner because I needed to pay my rent.
And when the pandemic happened and I was able to not only find this place but afford it because it
became affordable.
I was so excited.
But that looming presence of rent increasing again was always in the back
of my head.
In mid 2021, New York City began to come back to life as vaccines became available and restrictions
were lifted. New York City is dead forever.
That was the proclamation from some last year when sidewalks across the city emptied and many small
businesses closed their doors for good.
But new data today shows a reawakening.
Rent soared as tenants lost the bargaining power that they had at the height of the pandemic.
I've been in the business 13 years and I've never seen the rental market quite like this.
I've seen it competitive, but not where there's bidding wars for rental properties.
My original rent was $2,250, so they're saying if I want to renew the rent, it'll be
$4,395. So yeah.
I actually did refresh my page because I thought this was an error and I looked at the number and
I just started laughing.
$3,500, $3,500, $3,500.
Like, I had to keep saying it out loud to myself because it was such a ridiculous number
that I was like, this cannot be possible.
This must be a joke.
We got a new lease increase.
We really want to talk to the landlord and discuss an option of can we negotiate a little bit or is there any
wiggle room? And they just wrote back within 15 minutes saying no, that they already gave us a
preferred rate of that $700 increase.
So they were not willing to budge on negotiations at all.
We didn't think our apartment was worth 2700.
It's small and it doesn't really have all the amenities.
The fourth floor walkup, the $2,700 is also our preferred rate, where it's actually at $3,100.
Now, with inventory very low, landlords can charge much higher rates and certainly make up some of the losses
that they incurred during the pandemic.
I think some of the misconceptions that people have about New York City landlords is that every single one
is a huge institution just reaping in profits when in reality there are a lot of small
landlords, especially throughout Brooklyn and Queens, who maybe they live in one unit and rent out the other,
and they're dependent on these renters to offset their mortgage and expenses.
Of the city's nearly 3.6 million units, two thirds are rentals.
About 1 million are rent stabilized, meaning that rents can only be increased by a fixed amount each
year. But even those lucky enough to be living in rent stabilized units are seeing larger than usual
rent increases.
In June 2022, the New York City Rent Guidelines Board approved a
3.25% increase on one-year leases and a 5% increase on two-year
leases, the highest rent hike in nearly a decade.
The fastest growing borough has been Manhattan.
In terms of prices, Manhattan was also the hardest hit and now we're seeing prices that are higher than 40%
year-over-year. That would have been something I thought was a typo years ago, but is now a sad reality
for people living in Manhattan and trying to cope.
If I'm already checking off the boxes of what makes a great tenant, I have a full-time job.
I make over six figures.
I'm single, quiet.
And I can't even afford to live here.
Who is the housing market for?
So when we received the lease renewal and the mail, we just knew immediately we're not going to do
this.
We actually found a great one that we liked.
It was over in Kew Gardens in Queens.
We started to put an application in and later that day I was laid off
from my position and my role.
And you know, anybody that knows New York City, you need proof of
employment and offer letter pay stubs.
And at that point, I didn't have any of that.
Kacie and her husband left their Upper East Side apartment and moved into an Airbnb in the Bronx.
We thought that that was the best choice for us because it allowed for a lot of flexibility.
They do offer short term leases, which was really nice.
It was almost like a sublet.
We said no to $700 and we did think about that.
But I think in retrospect, I would have done a little bit more research and look for different apartments and
a little bit more effort into making a decision.
Before we actually just said no to our landlord, we realized that after it was all said and done, the
Airbnb itself really cost just about as much as the rent increase would have been at that
$2,700.
As I apartment hunt, I grow frustrated because I see very blatantly
the benefits of what boroughs have and what other boroughs don't like.
What do I give up?
Do I give up having access to be able to get food easily, or do I give up
being able to walk to a doctor?
Do I give up my safety because some neighborhoods are safer than others?
For a whole week I was just breaking down, looking at the prices.
One day I literally called my mom and I was like, Mom, I feel like a failure.
I can't even afford living in the city.
We've put in one deposit, so ideally we don't go past another one.
Is the agent here yet?
Could you picture a full bed in here with your desk?
Yeah. I feel like my dad's would fit here and then, like, I could have a full bed, but then, like, I need
something for my closet.
I love it, but I'm.
I don't know if I can afford it, honestly.
So my roommate and I saw three or four apartments before finding the one that we have
now that we just got approved for.
And that process was insane.
We actually applied to apartments that we didn't even know if we wanted to live in just for
backup for safety because it was just so competitive.
There is even an apartment where we had to put in a $1,000 deposit just for our application to be
considered.
You know, as a real estate agent throughout Manhattan, Brooklyn and Queens, we're seeing that apartments are
on the market for less than a week and they would be rented at the first showing or first open house.
The fastest listing that I had rented was in Bed-Stuy, and it had a backyard.
It was a two-bedroom rental with a backyard.
We had previously rented it for $2,700.
We put it on the market for $3,000 and we had close to 75 people at the first open house and it
rented that day and I think it rented for $3,600.
Another challenge for New Yorkers is the requirement that they earn 40 times the rent when applying for an
apartment, with the median asking rent in Manhattan around $4,000.
That means the minimum income to qualify for an apartment at that price is $160,000.
The median household income in New York City is $67,000.
If an applicant doesn't meet this requirement, they need to find a guarantor who makes at least 80 times
the rent to cosign their lease.
So my roommate and I toured this apartment.
It was $4,800 for two bedrooms and one bathroom in downtown Brooklyn, and it had
everything that we wanted.
But we didn't meet the criteria of making 40 times the rent in our income.
When I first moved into this apartment, it was $1,882 a month and I was making
$65K. I was very privileged enough to afford that rent requirement, but because it wasn't
40 times that I needed a guarantor, that is something that was both
embarrassing to deal with as a 29-year-old who with a master's degree, you know,
I proved I can make it on my own.
But here is a roadblock that doesn't make sense and seems to be
very classist to push certain people out.
With inventory rising right now, we're seeing a lot of that inventory come from people who are getting priced
out of their pandemic deals.
About a third of the inventory in the city right now is coming from those people.
We've thought about Jersey City, which is really cool.
It's not out of the question. I mean, those are all really close to New York.
That's just kind of like a wait and see kind of thing.
But we're willing to do Brooklyn, Queens.
I mean.
Kacie is waiting until she finds a new job before starting her apartment hunt again.
There's so many remote opportunities now.
Who knows where I'll end up?
It could be in New York. I could be in Boston or Philadelphia, but I'm really open to anything.
So. And here's my resume.
Just kidding.
Thelma's lease ends in September 2022.
She won't be renewing.
You know, I remember at the beginning of the pandemic how scary that was and
how I mean, if you were here, it was very empty and scary.
So to see New York come alive again has been incredible.
And then to not even be able to continue to experience that joy simply because I can't
afford to live here is that's ridiculous because I'm like, okay, then what's next?
It is looking more like I'm going to put my stuff in storage and
go to Europe and work remotely there and hope that housing calms down in
New York.
Thelma ended up buying a one-way ticket to London.
Hopefully I can come back once the market has cooled down a little bit and I can find a spot or
I don't know, maybe I'll officially become a London girl.
Who knows?
Ernestine is moving to Brooklyn with her roommate.
Her portion of the rent will be $2,200.
I love it. I love it.
Originally, I was very against Brooklyn, but I actually love this area.
I like this area more than where I originally am living right now in East Village.
I love how it's like right by the water.
There's so many cute restaurants around and it just seems like it's like easier access to, like, healthy
things I could do in everyday life.
So when we signed this lease for our new apartment, the upfront costs were
$10,000. So that's including the security deposit and that's including first month's rent.
But the thing that really threw us off was the broker's fee, which was $2,000.
I had to dig into my savings and my savings literally ...
Like a big chunk of it just went away.
So I'm just going to have to change my lifestyle a little bit and save where I
can. So it's just little compromises that you have to make.
It's just all compromises.
It's really an odd feeling, not having a set place right now and just really kind of feeling like a nomad.
So it's hard to think about where I'm going to be in a few months and where we're going to be settled in.
And also my cat. I want to make sure my cat is happy.
It really does come down to supply and demand.
There's a lot of people who want to live in New York and the amount of apartments in New York, there's
just not that many of them.
And that imbalance right there is going to cause the unaffordability that we're seeing across the city.
The finish line keeps moving and I'm like, what is the purpose of me running this race
anymore?
With the U.S. Economy on shaky ground, there's a chance that New York City rents could start to
normalize. We're going to see a lot of inventory come online, so that would be people moving out of the city
or a large rash of construction being built or something going on with the demand side.
If there's a ton of job losses like in a recession, things like that, where people just couldn't afford
what they could afford before then, that would also lead to prices to fall as well.
So one of these two things has to budge.
The scales are starting to tip into buying.
So if you look at that rent versus buy analysis, I think as rents are at an all
time high, it's really worth looking at why am I spending $5,000 to rent when
I could own the same apartment for less?
I think the hardest part during this process was the mental strain that it took on me.
It was hard to choose between whether I wanted to pay the premium of New York City for the
opportunities that you get here or just move home and save my money.
I'm optimistic. I think this is a temporary fix and something's got to break.
I think that at some point the mayor is going to have to do something and we'll have more opportunities and
more apartments out there.
Being able to have this for two years has been so uplifting and so inspiring.
I feel almost unstoppable and I feel so grateful.
And I see New York coming alive.
But at the same time, New York is coming alive.
I'm being pushed out at the same time.
You know, "New York tough" is a saying and it's true, but I feel like we're being beat down
and you can only be as tough as you can.