Rent increases on lease renewals fall for the 3rd straight month
In December 2022, rent increased on lease renewals for market-rate apartments in NYC were 3.2% compared to 18.2% a year before. Rental activity continues to cool heading in the winter months, where 84% of renewals reported an increase of less than 5%. Notably, the average December renewal in Manhattan was a 2.4% increase compared to 6.7% in Brooklyn. Increases in rent renewals have been hovering around 5% since August, indicating that the post-pandemic correction in prices seems to be behind us.
2022’s rental market was a rollercoaster. The year started off with a dramatic reversal of the rent discounts seen throughout the pandemic. Manhattan renters in particular navigated double-digit increases sometimes upward of 50% when their leases came up for renewal.
Heading into the summer, the usual seasonal uptick coupled with the influx of renters returning to the city resulted in unprecedented demand. As 2022 comes to a close, things have “normalized”. Rents are back or have surpassed pre-pandemic prices while demand has cooled heading into the winter months.
So what can we expect in 2023? Here are openigloo’s NYC 2023 rental predictions:
Rent prices will remain flat.
Regulatory discussions around Good Cause Eviction and Broker Fees.
Upward pressure on pricing in the outer boroughs.
Renters will demand transparency and stability when apartment hunting.
New construction in 2023 will help relieve supply constraints into 2024.
1) Rent prices will remain flat in the 2023 NYC rental market
Since summer 2022, rents have stabilized. Even increases on lease renewals have remained sub-5% indicating there is no longer appetite for 20% increases. We expect this attitude to continue into 2023 with the usual seasonal upticks throughout the year.
2) Regulatory discussions around Good Cause Eviction and Broker Fees.
2022 brought a lot of debate around Good Cause Eviction and broker fees. Headlines of 50% rent increases and some tenants being charged $20k broker fees on stabilized apartments caused upset. We predict that restrictions on rent increases and caps on broker fees will be a serious part of regulatory discussions in 2023.
3) Upward pressure on pricing in the outer boroughs.
In 2022, rent changes across the boroughs began to converge. Rent increases in Manhattan, Brooklyn, and Queens were the same, indicating that tenants are more open to looking outside of just Manhattan. Because the return to office movement in NYC has been slower to materialize, renters will continue to look to more spacious and affordable spaces in the out boroughs putting upward pressure on pricing.
4) Renters will demand transparency and stability when apartment hunting in 2023 NYC rental market.
2022 threw a shock into the rental market. Many tenants were left scrambling after being priced out of their units and felt frustrated by the lack of pricing transparency and stability of their housing. In 2023 renters will demand more transparency with respect to price increases, and management’s responsiveness before they sign a lease. Renters will not just take space, location, and price into consideration during their apartment hunt, but they will be looking for some peace of mind that they can renew their leases for multiple years at incremental and tolerable increases.
5) New construction will help relieve supply constraints into 2024.
2022 saw an increase in issued building permits as developers raced to secure their projects before the 421-a tax exemption was set to expire. This tax exemption was given to new rent-stabilized projects where a percentage of units were set aside for affordable housing lotteries. Permits covering 58,000+ new units were granted. While it’s unclear how many of these projects will start in 2023, any injection of new housing supply in New York will provide some relief for renters.
Rent increases on lease renewals continue to stabilize
In November 2022, rent increases on lease renewals for market-rate apartments in NYC were 5.2% compared to 11.6% a year before. As rental activity cools heading in the winter months, 82% of renewals reported an increase of less than 5%. The average November renewal in Brooklyn and Manhattan was a 6% increase, compared to 0% in Queens. Increases in rent renewals have been hovering around 5% since August, indicating that the post-pandemic boom in prices seems to be behind us.
New York City is expensive, and apartments are scarce. In order to meet the demands of a growing population, the city is constantly building apartments. Affordable housing lottery helps tenants secure affordable housing throughout the five boroughs. Here are answers to some of the frequently asked questions we receive about the affordable housing lottery at openigloo:
1. What is the affordable housing lottery program in NYC?
NYC affordable housing lotteries are run by two city agencies; The New York City Department of Housing Preservation and Development (HPD) and the Housing Development Corporation (HDC). These agencies collaborate with private landlords and real-estate developers to make sure a portion of new development projects are affordable and reserved for the housing lottery. The city considers an apartment affordable if the tenant does not spend more than 30% of their household income on rent. In exchange for participating in the program, these private landlords and real-estate developers receive multi-decade tax abatements. In the lottery, all apartments have rent stabilization leases, which means tenants are eligible to renew, and the rent can only go up by a certain amount every year. The affordable housing lottery is just one way to secure a rent-stabilized apartment. It’s not the only way. To learn more about rent-regulated apartments, read our blog post here.
2. Who is eligible for affordable housing units in New York?
Households of various sizes and incomes are eligible to apply for the lottery. Each building in the lottery has its own rules and parameters for who can apply. For example, below is a matrix explaining who is eligible for apartments in a new Harlem development. This is how you would interpret the top section; there are 13 1-bedroom apartments available for households that make up 130% of the Area Median Income (AMI). Henceforth if your family has 3 people, and together you make between $94,972-$156,130 per year, then you are eligible for that apartment. If the program chose you as renters, you’d pay $2,770 for a rent-stabilized unit in that building.
3. Can people from outside of New York apply to the lottery?
People from outside of New York can apply for the lottery, but there is a preference for NYC tenants. Therefore, some buildings may also have more specific community preferences, where they need to fill a portion of the units with families from a specific neighborhood.
4. How long will the program take to select apartments?
In fact, no one can predict how long the program takes to select an apartment. Several renters secured an apartment within months, while others waited years. Our successful tenants have told us to be patient and steady; apply, apply, and keep applying.
To learn more about NYC affordable housing lotteries, be sure to visit NYC Housing Connect. There you can browse available apartments and apply.
Radiators heat 80% of NYC buildings – and 70% of households reported that those chronically overheated. But what are radiators, how do they work, and what do renters need to know about them to survive NYC winters?
Radiators work by drawing heat from water or steam and using that heat to warm up your apartment. They are made from metal because it is an excellent conductor of heat and can usually be found in your apartment windows. Here are 4 things you should know about NYC radiators.
1. Radiators are supposed to be scorching hot.
In NYC, radiators have a few states – overworking, underworking, and in some lucky cases functioning just right! Renters had to open their windows while using radiators in the early 20th century to keep warm. This is because the city wanted to combat airborne illnesses and create ventilation in crowded apartments and buildings. Despite creating sauna-like conditions, your radiator is overheating your apartment as intended.
2. You can’t control them.
While you might want to open or close the knob on your radiator, please remember that it is only an on/off switch. This knob does not control the heat. In fact, if you leave the knob turned only halfway, you might get a lot of steam trapped – which can create a loud clanking sound.
3. You can install a valve to control heat on radiators.
Renters can buy radiator valves to install and control the heat emitting from a radiator. If you are interested in installing one, it’s important to have confirmed permission from your landlord beforehand.
4. You can request a radiator cover from your landlord if you have children under the age of 12 residing with you.
Radiators can be scorching to the touch and can pose a real danger to young children. That’s why in 2013, a New York state bill passed requiring landlords to install radiator covers at the request of a tenant residing with a child aged twelve or younger. A radiator cover is a protector that covers the hot metal pipes but still allows heat to pass through. In accordance with the rules, landlords must pay for the radiator cover installation and have 90 days to do so. If he/she fails to do so, the tenant may install a cover and deduct the cost from the rent.
5. You may need to bleed your radiator.
You may need to bleed your radiator if it’s not working or making loud clanking noises. As a result, renters must bleed radiators when there is too much trapped air in the pipes. It’s important to bring this to your landlord or super’s attention. Renters should NOT attempt to bleed your radiator on their own. In some cases, boiling water could come spraying out, both burning you and flooding your space.
Winter is upon us! That mean’s heat season is in full effect. From October 1 to May 31 every year, landlords are legally obligated to make sure your apartment and building have functioning and sufficient heat. Here are 5 things every new New Yorker should know about the city’s heat season.
1. When the temperature drops, your landlord needs to turn on the heat.
Many NYC renters do not have control over their heat and instead rely on the building’s landlord or management company to turn it on when the temperature drops. There are city guidelines for when the heat should kick in. During the day, the indoor temperature needs to be 68 degrees Fahrenheit if the outdoor temperature drops to below 55 degrees. At night time, the indoor temperature needs to be at least 62 degrees Fahrenheit no matter what the outdoor temperature is.
The city legally requires landlords to ensure your building has a functioning and sufficient heat – they don’t have to pay for it. While it’s quite common for most NYC leases to include heat, there may be instances where you have to pay for your own heat. Perhaps you have an electric HVAC you can control, or the landlord passes on the heating bill to you every month. If you’re paying for heat and it’s more than what you were expecting to pay, it doesn’t hurt to bring up the issue when you’re negotiating your renewal. Here are 6 tips to help you negotiate your rent.
3. There are no laws about an apartment being too hot.
Unfortunately, there are no rules about an apartment being too hot. At openigloo, we’ve read hundreds of reviews from renters complaining about sauna-like conditions during the winter months. In NYC, 80% of buildings are heated with radiators, and 70% of those households report being chronically overheated. This is because radiators were designed to overheat apartments in order to force tenants to keep their windows open. During the early 20th century, the city wanted to keep buildings ventilated and combat airborne illnesses – so overheating was the answer.
4. You can not control the heat coming from your radiators.
It’s important to note that you can not control the heat coming out of a radiator (unless it has a control valve installed). The knob on the side of your radiator is simply an on/off switch. If you leave it halfway, it could lead to clanking noises.
5. You can file a complaint with 311 if your heat is not working.
NYC winters can be cold. Insufficient heat can pose serious health risks, especially for elderly people and children. If your landlord is not responding to your complaints about broken heat, you can file a complaint with 311. You can call or file a complaint online. The city may send an inspector to investigate – if they find that the landlord is not abiding by the heat season guidelines, they may issue violations and corresponding fines.
Rent increases on lease renewals continue to stabilize, with the exception of Brooklyn
In October 2022, rent increases on lease renewals for market-rate apartments in NYC were 5.9% compared to 8% a year before. After a busy summer season, rents have started to cool, with 74% of renewals reporting an increase of less than 5%. Notably, Brooklyn’s increases in renewals continue to outpace other boroughs – the average October renewal in Brooklyn saw a 10% increase compared to just 4% in Manhattan. This could be an early sign of heightened demand in the borough.
Renting apartments in NYC is unlike anywhere else. With millions of renters in the city, and many more moving each year, it’s important to go into your apartment hunt armed with the right information.
Here are 5 things every new New Yorker should know before renting an apartment.
1. Scams are everywhere. Be careful.
Scammers prey on newcomers when it comes to apartment hunting. They’ll post listings that seem too good to be true and have a low price point. They may pressure you into making a deposit in order to see or apply for the apartment. They may say you can’t see the apartment because the current tenant is still living there. These are strong indications that it could be a scam. All real estate agents have to have a license with the State – if you’re feeling uneasy about the correspondence with an agent, you can look them up here and confirm they have a valid real estate license. If you’re dealing with an owner – confirm they are actually the owner of the property. Put the address in openigloo and you can see who the listed building owners are. A good rule of thumb is to never pay anything without seeing the space. If you’re not in the city, find someone to see it for you. Dealing only with verified and licensed agents and/or owners is also a good practice.
2. Most landlords require that you make 40x the rent and have a 700+ credit score.
Requirements to rent an apartment in NYC are strict. 40x the rent is standard. That means if you are looking at an apartment that is $2000 a month, your household income needs to be $80,000 a year to qualify ($2000 x 40 = $80,000). A 700 credit score is also typical. For example, if you’re a new grad moving to New York and you haven’t started working yet, getting approved is going to be tough without a guarantor. It doesn’t matter if you have a strong offer letter outlining your upcoming salary. Moving to NYC to look for a job will be difficult. If you don’t meet the income or credit requirements, you’ll need an American guarantor (preferably in the tri-state area) who makes 80x the rent and has a credit score of at least 800. If you don’t know anyone who can guarantee a lease, you can look into third-party guarantor providers.
Broker fees cause a lot of confusion for renters. In New York, renters are responsible for paying the broker when they sign a lease. In many states, landlords pay this fee (but not in New York). However, there are no fee apartments in NYC – this is when the landlord has agreed to pay the fee to the broker, or they are renting it themselves, so there is no fee. In any case, a 15% fee is normal. If the rent is $2000 a month, the fee to the broker would be $3600, which is equivalent to 15% of the annual rent ($2000x 12 months x 15% fee = $3600). Some brokers may charge just 1 month’s rent as the fee. When you sign a lease, expect to pay the first month’s rent, a security deposit equal to one month’s rent, and a broker fee. Broker fees are negotiable, so don’t be afraid to try and get the fee lower. If you want to avoid a broker fee, search for no-fee listings on openigloo.
4. Research the building and landlord before you move in.
Lots of apartments in New York show really well. New appliances, clean hardwood floors, pre-war charm. But you never really know what it’s like to live in space until you’re already there. On openigloo, you can read reviews from other tenants, access city data on the property (open violations, bedbug reports, litigation history), and figure out who owns the building. Avoid apartments with hidden issues – pests, faulty heat, or thin walls are things that could sour your rental experience.
5. New York has tenant laws to protect you. Get familiar with them!
New York has dozens of laws to help protect renters. For example, landlords can only charge a maximum of $20 as an application fee. Landlords must return security deposits within 14 days of move-out. Landlords must give notice if they want to raise your rent by more than 5%. And the list goes on. You can read more about NYC Housing Laws here.
Renting in New York City is tough, but it’s important to go into your apartment hunt armed with the right information. Reach out to the openigloo team anytime with any questions or concerns. We’re here to help renters find a great place to live.
Once you’re settled into a new place, submit an anonymous review about your building on openigloo, and help a future renter with their apartment search.
Renters finally get some reprieve on rent renewals as increases dip below 2021 levels for the first time this year.
In September 2022, rent increased on lease renewals for market-rate apartments in NYC fell to 5.2% compared to 12.5% in August. After a busy summer season, rents have started to cool, with 76% of renewals reporting an increase of less than 5%. Notably, Brooklyn renewals were 2 percentage points higher than in Manhattan. Few neighborhoods reported double-digit rent increases for September renewals; these include Clinton Hill, Williamsburg, Crown Heights, and Gramercy.
Rent increases on renewals continue to stabilize, but popular neighborhoods continue to experience high double-digit increases
In August 2022, rent increased on lease renewals for market-rate apartments in NYC averaged 12.5%. Despite New York lease renewal increases cooling slightly since earlier this year, rent increases are still nearly double what they were during the same period in 2021. 63% of August renewals experienced an increase of less than 10%. Notably, neighborhoods such as Upper East Side, Upper West Side, Chinatown, and Bushwick experienced increases of over 20% during August. The average increase in renewals in Manhattan was 13%, Brooklyn at 11%, and Queens at 12%.