As New Yorkers struggle with higher gas and grocery prices amid record-high inflation rates, the cost of rent is also increasing — and isn’t expected to level off anytime soon, according to data and experts.
The net effective median rent in Manhattan increased by a whopping 10.1 percent between July and October and 20 percent since January as inflation jumped to the highest level seen since 1990, according to data compiled by Miller Samuel/Douglas Elliman.
In Queens, the third-quarter median asking rent was $2,200 this year, just $100 shy of the pre-pandemic peak set in quarter three of 2019, according to data from StreetEasy.
While numbers from Miller Samuel/Douglas Elliman show housing costs across Manhattan, Brooklyn and Northwest Queens are still lower than 2019, early numbers from real estate analytics company UrbanDigs show prices jumped beyond pre-pandemic levels this month.
So far, the median asking rent in Manhattan is up 27 percent this month compared to last year and up 4 percent compared to November 2019, the data show.
In Brooklyn, the median asking rent is up 15 percent so far this month compared to last year and up 5 percent compared to Nov. 2019.
“I wish I had better news on that one, I think a lot of tenants are likely to get sticker shock at their next lease renewal,” Greg McBride, the chief financial analyst at the personal finance website Bankrate.com, told The Post.
“If inflation does eventually moderate and we get back to that 2 percent rate of inflation, then OK, that’s an environment where rents would likely increase at a much more modest, pedestrian pace, but if inflation stays at 4 or 5 percent, that’s going to translate into similar increase in rents year after year.”
New York’s numbers reflect a nationwide trend that’s seen a 0.4 percent increase in housing cost for renters between September and October amid a dwindling supply of listings, high demand and a supply chain bottleneck that’s increased the cost of home building materials, Labor Department data show.
Earlier this year, rents in tech hubs like New York City, Los Angeles and Chicago were declining by 15.8 percent but in September, they jumped by 7.6 percent year over year, according to data from Realtor.
“In New York City, the vacancy rate here is already absurdly low and rents have been steadily rising post pandemic as there is more demand than supply. Additionally, if mortgage rates start to go up and affordability is affected it will force potential buyers to become renters as they are priced out of the market,” Pamela Liebman, the CEO of real estate giant Corcoran, told The Post.
“If mortgage rates rise, that will put additional pressure on an already robust rental market and we could see a serious rise in rent. And as landlords’ costs go up due to inflation, they will continue to pass the increases on to the tenants.”
The pandemic massively disrupted New York’s housing market and is partly to blame for the sky-high increases, said Jonathan Miller, the President and CEO of Miller Samuel Inc.
“The rate of growth in 2021 has been like a rocket ship, but it’s coming from a very low place because rents fell to 25% during the early days of the pandemic and now are rising,” Miller explained.
“If we look at net-effective median rent for all of Manhattan compared to October of 2019, so pre-pandemic but the same seasonal period in the year, median rent is 0.8 percent below 2 years ago. It’s very close to parity.”
Still, with billions in stimulus dollars flowing through the region, expected wage growth and the return of international buyers, demand is only expected to go up and unless the housing supply increases, rent costs are slated to jump even more, too, said Miller.
In 2020, the number of new housing permits decreased by 26.3 percent citywide and in Manhattan, only 1,896 new housing permits were issued last year, down 65.6 percent from 2019 and the lowest level seen since the 2010 Great Recession, city statistics show.
“Rents are going to continue to grow throughout the end of the year and throughout next spring,” said Nancy Wu, an economist with StreetEasy.
“We’re going to see a very busy rentals market [next year] and high demand is going to lead to higher rents, given the supply is pretty constant.”
At the start of the pandemic, New York implemented a moratorium on evictions barring landlords from booting tenants who can show they’re behind on their rents because of COVID-era financial difficulties but the program will end come January 15.
Beyond that, cash-strapped renters can apply for state aid through a federally financed program designed to help lower-income New Yorkers pay their housing costs but that program has a bottom, too.
So far, tenants have filed 252,000 applications, 73,000 of which have been paid out, totaling $913 million in aid.
An additional 73,000 applications, totaling $917 million in aid, have been tentatively approved.