Rent is out of control in Manhattan, Austin, Miami, and other big cities around the country, which are mostly reeling from the pandemic’s economic implications.
According to a new survey from real estate brokerage firm Douglas Elliman obtained exclusively by DailyMail.com, median rent in Manhattan touched an all-time high of $4,000 per month in May, up 40% from a year ago and surpassing out February’s high of $3,700.
Because most landlords in New York City want a renter’s annual income to be at least 40 times the rent, anyone seeking for flats in Manhattan should anticipate to make at least $160,000 per year.
According to real estate analyst Jonathan Miller, who created the Elliman analysis, the rise in rent in New York City comes as competition for housing surges around the city and landlords cease special arrangements that decreased rent for people affected by the pandemic.
‘We have a fast-moving rental market with no concerns about affordability,’ Miller said, ‘and we can expect rent growth to continue during the summer.’
According to Redfin, the average rent in Austin had risen to $2,245 in January 2022, a 35 percent increase over the previous year, and Realtor.com discovered that Miami’s average rent had risen to nearly $3,000 in March, a 58 percent increase in the previous two years.
Many New Yorkers evacuated the city during the COVID-19 outbreak, and rental costs plummeted as frantic landlords tried to entice potential renters into their units with special offers.
To persuade renters to sign new leases, several property management companies offered large discounts or sweets, such as multiple months of free rent.
According to Miller, once the vaccine was released and undermined the narrative that the city was “unsafe,” not only did some residents return, but so did other New Yorkers who had been displaced by prior rent hikes and wanted to take advantage of the new discounts.
As mortgage lending tightens, fewer people are able to qualify for homes in the city’s outskirts, forcing them to join the ranks of apartment searchers in Manhattan, Brooklyn, and Queens, according to Miller.
‘As more people are pushed into the rental market, competition and rental prices have increased,’ Miller added.
According to Miller’s analysis, nearly one out of every five new leases signed in the city has resulted in a bidding war.
It has had a catastrophic impact on New Yorkers, who have taken to social media to vent their frustrations when their rent increased by 50% or more.
Michael, a Tik Tok user, said he received a letter from his landlord informing him that his rent will be increased by $1,300.
‘The fact that we’re getting a $1,300 raise basically pricing us out on principal alone,’ Michael explained. ‘This irritates me because I’ve heard that other people’s rents are increasing by 50%.’
Stephanie Leigh, a New Yorker, took to TikTok to complain about her condo’s owner raising her rent by a “absurd amount.”
‘This market is absurd right now,’ Leigh remarked as she looked for an apartment in an East Village building where flats went for as much as $8,000. ‘This is the first time I’ve ever seen it like this, and I’m moving to New York for the eighth time.’
Warehousing, a technique in which landlords shelf units in order to drive up demand and wait for better rental offers in the near future, has had a minor impact on prices in the city.
According to The Real Deal, more than 1,814 apartment listings were removed in March to increase competition in the market, a move that was criticized by state Assemblywoman Linda Rosenthal.
‘I think it’s terrible that some landlords are keeping units off the market and just waiting for rates to go up,’ Linda told the Wall Street Journal after landlords levied the unoccupied units in an attempt to overturn a 2019 rule that eliminated a 20% rent boost on rent-controlled apartments.
Evan Rugen, a former real estate broker, said his apartment has four vacant units because they’re rent-controlled, which means the landlords can’t raise the price the previous tenant paid because they’re hoping the state will overturn the law.
‘They’re betting the law will change back,’ Rugen explained,’so [the units] just sit vacant, robbing a New Yorker of an apartment.’ ‘The rental market in New York City is crazy.’
Rosenthal intends to draft legislation that will impose fines on landlords who store apartments for more than three months.
Thousands of New Yorkers have been blamed for driving up prices in Miami as they fled the Big Apple due to the hardships.
According to Craig Studnicky, CEO of luxury real estate firm ISG World, thousands of New Yorkers who moved to Miami in the last two years have increased competition and rent.
‘Everything was a reaction to COVID,’ Studnicky told The Washington Post. ‘COVID was the catalyst that pushed so many people out of their predicament,’ says one participant.
High mortgage rates and housing prices, similar to those in New York, have led an increasing number of people to rent in Miami, adding to the competitive market.
Trinity Thein of Miami said on TikTok that she and her husband had to leave their $3,100 two-bedroom apartment after the landlord raised the rent to $4,000.
‘That is just an outright no,’ Thein said, adding that the pair had downgraded to a $2,800 one-bedroom apartment.
Rent increases in Austin have been attributed to economic growth and development as more individuals seek to relocate to the prospering Texas metropolis.
Katelyn Fletcher, 25, of Austin, expressed her surprise on TikTok after her landlord raised her rent from $2,200 to $4,678 per month.
Because there are no rules in Texas prohibiting landlords from raising rental prices, landlords in Austin are free to do as they choose.
Part of the difficulty, like in New York and Miami, is due to soaring housing prices, which have saturated the Austin rental market, according to Jeff Andrews, a senior analyst with Zumper.
‘Rents tend to grow in tandem with home prices when home prices rise. And that’s because, when housing prices climb, renters on the verge of becoming homeowners are priced out,’ Andrews explained.