New York City Rents Rise, Even as Thousands Struggle to Pay
On her first day in office this week, Gov. Kathy Hochul said that she would move to strengthen New York’s beleaguered effort to distribute …
On her first day in office this week, Gov. Kathy Hochul said that she would move to strengthen New York’s beleaguered effort to distribute pandemic rent relief, highlighting the plight of hundreds of thousands of struggling New Yorkers who are at risk of being evicted.
On the same day, one apartment rental site, Zumper, published a report that showcased a very different trend: After a market rebound, New York City had surpassed San Francisco and claimed the inglorious post of the most expensive place to rent a one-bedroom apartment in the nation. Data from July from the listing site Zillow, while still showing San Francisco as the more expensive place to rent, showed that New York City had closed a gap between the two cities since March 2020 and was only about 4 percent behind.
That both story lines could be true at the same time — surging rents and continuing, widespread economic pain — was yet another reminder of New York City’s longstanding issues with inequality and a striking reflection of how the recovery from the pandemic has, in some ways, been uneven.
The rent increases have been driven in part by the return of people to more expensive neighborhoods in New York City, and specifically Manhattan, where rents had dropped during the pandemic, analysts said. The desperate need for rent relief, however, is most acute among lower income New Yorkers in parts of the South Bronx or Queens.
“It really is a tale of two cities when it comes to New York City — when we talk about rent rising rapidly, we’re really talking about some of the most expensive areas like Manhattan,” said Nancy Wu, an economist at StreetEasy, which is owned by Zillow.
Hochul moves to change the rent relief program
The pandemic dealt a significant blow to renters in New York.
An analysis of census data from late June and early July by the National Equity Atlas, a research group associated with the University of Southern California, estimated that more than 830,000 households in New York State, the majority in New York City, were behind on rent, with a total estimated debt of more than $3.2 billion. Almost half of the renters in those households were unemployed and more than three-quarters earned less than $50,000 a year, according to the analysis.
But the rollout of New York’s rent relief effort — which is designed to deliver payments directly to landlords and provide broad protections against evictions for tenants, even as their applications are pending — has been slow and riddled with errors. And there are fears that many people who need help have yet to apply.
As of Wednesday, 176,000 people had applied to the program, with the largest numbers of applications in New York City coming from ZIP codes in the Bronx, according to state data. On Tuesday, state officials said more than $200 million in payments had been made — less than 8 percent of the $2.7 billion allocated for relief by the state.
In one of her first acts as governor, Ms. Hochul said the state was conducting a “rapid review” of the program’s work flow, and reassigning 100 contractors to help landlords complete the paperwork required for payments to be disbursed.
She also said the state would spend an additional $1 million on outreach, specifically focusing on areas where the state was not receiving as many applications as expected.
“We want to reimburse the landlords, make people whole,” she said on MSNBC on Wednesday. “People don’t know about this, so I’m going to be working at the local level to get the message out.”
Assemblywoman Linda B. Rosenthal, who chairs the social committee and held a hearing earlier this month on the rent relief program, said she was “very, very happy” with Ms. Hochul’s urgent moves on rent relief.
“There are a million issues she could have picked,” Ms. Rosenthal said.
Median rents are on the rise
Zumper used data from more than one million active rental listings — from other rental listing services as well as through the company’s own platform — to calculate the asking median one-bedroom rent in New York City and San Francisco, both infamously expensive cities.
In March 2020, that figure in San Francisco was $3,500, compared with $2,850 in New York City, according to Zumper. After the pandemic hit, and many people with means to relocate and ability to work remotely left their homes in the cities, rents dropped. By January 2021, the median rent in San Francisco had fallen 23.4 percent to $2,680, and the median rent in New York City had fallen 17.5 percent to $2,350.
Then as the vaccines became more available, and cities started relaxing their pandemic restrictions, people began returning to the cities, and rents began rising again, though they were rising much faster in New York City, said Jeff Andrews, the author of the Zumper report.
By August, the median rent for a one-bedroom in New York City was $2,810, about 1.4 percent below the March 2020 number. The median rent in San Francisco was $2,800 — still 20 percent below the March 2020 number.
Mr. Andrews said part of the difference in trajectories could be explained by the high number of tech workers who lived in San Francisco before the pandemic, who may not have returned to the city because they have a greater ability to work remotely.
He said that even though the median one-bedroom rent in San Francisco is 20 percent below the March 2020 number, it is still only $10 less than New York City’s median rent — showing how staggeringly high rents in San Francisco were in the first place, which may be dissuading people from returning entirely.
“It speaks to how outlandishly expensive San Francisco has been,” he said.
There are several caveats to the idea that New York City has grown more expensive than San Francisco overall. Zumper’s most recent data showed that the median asking rent for a two-bedroom apartment in San Francisco was $3,830, significantly higher than the $3,000 in New York City.
Mark A. Willis, a senior policy fellow at New York University’s Furman Center, said that the data may be skewed because it represents only rental units that are on the market, and not all units, including those that are currently unavailable but where people are living and paying rent, for example.
And the Zillow numbers show a slight difference. The Zillow Observed Rent Index, a special measure that takes into account what is available on the market, was $2,752 for an apartment in New York City in July, compared with $2,875 in San Francisco.
But Ms. Wu said both Zumper and Zillow appeared to be showing a similar overall trend.
“According to Zillow data, New York City rents are growing faster month over month than San Francisco,” she said.
Both data from Zumper and Zillow show that the changes in rent differ across boroughs. In Manhattan, the median one-bedroom rent dropped by about 19 percent from March 2020 to January 2021, compared with 10 percent in Queens, 5 percent in Brooklyn and 4 percent in the Bronx, according to the Zumper data.
And by August, the Manhattan and Brooklyn rents had recovered or even increased slightly compared with March 2020, with the Bronx slightly down and Queens still more than 6 percent below March 2020 levels.