So Shea Long, a software developer, was able to live without roommates until he was 30 years old. He moved into a one-bedroom apartment in Midtown Manhattan early last year and was paying $2,150 a month in rent. He was aware that he had gotten a deal as part of a mass relocation of landlords Reduced rents amid the pandemic to keep renters in place while many others fled the city at the height of Covid-19.
Then, in April 2022, when he logged into the online payment portal to submit the rent as usual, a message popped up: he will pay $3,650 (£2,912) as of June.
The new price tag on his rent is a reality he obviously doesn’t want to swallow — but Long feels he may have no choice but to stay once he’s settled all moving expenses, a new security deposit, and the first month’s rent and more. He also wants to avoid the intense anxiety of finding a new apartment that’s even available, as New York City’s inventory is at its lowest since the 2008 financial crisis. “It’s not really worth going through all that fuss” when all those costs aren’t much cheaper than his 60 percent rent increase, he says. “Right now I’m thinking about getting a roommate again because it’ll just eat up my 401(k)” savings.
Long’s conundrum is one that many New Yorkers face, now that moving to a cheaper apartment isn’t as easy as browsing real estate listings. Renters are often financially and logistically unable to leave their homes if they wish to remain in the city, putting them in inevitable situations that put them beyond their means.
Such was the case for 29-year-old account manager Andy Ward, who moved into a Brooklyn studio last year and paid $2,100 a month as a pandemic incentive, with a month free. But in April 2022, when Ward received an automated email asking him to sign his lease via email, he was greeted with the news that he now has to pay an extra $400 each month.
Sam Chandan, a professor of finance at New York University in New York City and director of the Center for Real Estate Finance Research there, says the renters who are feeling the tightest are those in “work housing,” or “the rents that are affordable and within reach of the teacher, the firefighter, the policeman”. So not only can they not stay in their current homes, they could be evicted from the city altogether. And while living in big cities has always favored the rich, some fear this crisis could crowd out working-class renters, potentially meaning only a certain privileged class of people will be able to live in big cities.
“You don’t move at all”
Experts say these peak rents are different than in a city like New York. “The pace of rent increases has really preceded anything we’ve seen recently,” says Chandan. “In many cases, rents have risen faster than median family income.”
The main driver of this increase is that more and more people around the world have returned to cities in huge numbers, explains Chandan. For example, more people are moving to New York City today than before the pandemic. According to local government, the reopening of office buildings and schools played a big part in moving people to New York, as did the arts and entertainment scene, like Broadway, which revived.