NYC’s Rebounding Rents Shine Light on Long-Standing Crisis

“Two years into the pandemic, the city is moving ahead with a return to ‘normal,’ but the pre-pandemic real estate market’s ‘normal’ is not something to which we should aspire to.”

Before there was ever a COVID-19 crisis, New York City had a housing crisis.

The year before COVID rocked the city, nearly 50 percent of tenants paid 30 percent or more of their income to rent. For rent-burdened tenants, the pandemic sent them over the edge. Tenants who managed to hang on over the last two years now find themselves on the wrong side of increasing rents. The city’s Rent Guidelines Board recently proposed 2 to 4 percent increases for one million rent-regulated units, despite ongoing tenant hardship. For market-rate tenants, the story is far worse, necessitating state intervention to control price-gouging.

We are students enrolled in a community-based research class at the City College of New York, where, pre-pandemic, 1 in 10 undergraduate students lost access to permanent housing every year. As part of our coursework, the Met Council on Housing, New York City’s oldest tenants’ union, shared data from its Tenants’ Rights Hotline from January 2021 through early April 2022. Met Council on Housing’s hotline is a volunteer-staffed program that provides New Yorkers information on their rights as tenants. Between January 19, 2021 and April 3, 2022, the hotline fielded 5,033 calls.

As COVID-19 spread in New York City, many tenants fled, leaving apartments empty. The city’s vacancy rate averaged 6.5 percent in 2020, and reached 10.5 percent in Manhattan. Landlords, desperate to fill vacant units, offered rent concessions. Now, as leases signed during the pandemic are ending, so are the sweetheart deals, and landlords are pushing rents to new highs.

Data from Apartment List shows that across the city, April 2022 rents are 31.8 percent higher than in April 2021, a year-over-year increase that’s nearly double the national average of 16.3 percent. StreetEasy’s first quarter 2022 market report revealed Manhattan rents rose nearly “$1,000 more per month than they were at the same time last year reaching a record high of $3,695.” The report continues that tenants looking for apartments face a “competitive market,” thanks to “record-high rent prices, low inventory, and very few concessions.”

Increases are also showing up in Met Council on Housing’s data. Since the start of 2022, tenants shared with hotline volunteers that they faced steep rent increases. In January, a tenant called after receiving a renewal with a $500 increase. In February, another tenant called upon receiving a renewal with a 35 percent rent hike. The following month, a different caller reported that their landlord wanted to raise their rent by 40 percent, and another reported a $700 increase.

Between January and March 2021, the hotline received 24 calls about market-rate increases. In the same period this year, that number has tripled to 72. Over the first three months of 2022, questions about rent increases accounted for 18.9 percent of all calls from market-rate tenants.

Rent-regulated tenants are generally protected from outrageous rent hikes. Their rents are set annually, and landlords cannot legally increase rents beyond those levels. Market-rate tenants do not have those same protections, nor any protections for that matter. If a landlord decides not to renew a lease or raises the rent by 50 percent, market-rate tenants have no recourse. For tenants who cannot afford rent increases, these are de facto evictions.

Increasing rents put tenants at risk of displacement. Even among recipients of Emergency Rental Assistance Program funds, market-rate tenants were twice as likely to call the hotline with concerns about lease renewals than were rent-regulated tenants. The only way to prevent displacement is by fighting for change. In Albany, the Good Cause Eviction bill, introduced by Sen. Julia Salazar and Assemblymember Pamela Hunter, would give millions of market-rate New Yorkers the right to remain in their homes and limit how much a landlord can increase the rent at each lease renewal.

Landlords raise the specter of the widespread landlord abandonment of the 1970s and have admitted to withholding tens of thousands of apartments from the market (thus worsening our housing crisis), but real-estate sales have bounced back and money is being made.

Two years into the pandemic, the city is moving ahead with a return to “normal,” but the pre-pandemic real estate market’s “normal” is not something we should aspire to. In the lead-up to the COVID crisis, gentrification rocked New York City. Now, as 2022 rents shatter old records, we must take action to end the affordability crisis. Our research leads to no other conclusion.