Rents continue to tick up heading into summer months.
In March 2023, rent increases on lease renewals formarket-rate apartments in NYC ticked up to 10.8% compared to 20% a year before and 10.2% in February 2023. Increases on lease renewals have stabilized compared to 2022, where the market saw steep corrections in rent and 20%+ increases were standard. However, the majority of lease renewals are still in the sub-5% range. Meaning, landlords are increasing rents less than 5% when their tenants are up for renewal. Our recommendation to both renters and landlords is to compare the renewals they are receiving/giving to the numbers below so they can assess if the pricing is aligned with the rest of the market.
In February 2023, rent increases on lease renewals for market-rate apartments in NYC was 10.2% compared to 26.4% a year before and 8.1% in January 2023. Increases on lease renewals have stabilized compared to the levels seen in 2022, where the market saw steep corrections in rent. However, the majority of lease renewals are still in the sub-5% range. Meaning, landlords are increasing rents less than 5% when their tenants are up for renewal and steep double digit increases are becoming less common.
Your questions answered about subletting an apartment, short-term leasing, Airbnb and more in New York City.
Subletting is a common practice in New York, where leaseholders rent out their space to other renters for a period of time. There are many reasons a renter may need to sublet. Perhaps they are leaving the City for a few months for work or personal reasons. Instead of breaking their lease, they can sublet their space to someone else to cover the costs of rent. If you’re a renter in NYC, here are 5 things you need to know about subletting your apartment.
1. Subletting for less than 30 days is illegal.
In New York City, renters cannot sublet their space for less than 30 days. So if you’re going on vacation for a couple of weeks, renting out your space is not permitted. Buildings need to be zoned to accommodate short-term rentals. For example, dormitories or hotels are permitted to lease short-term. Most residential buildings in NYC don’t have the appropriate permissions to accommodate short-term renters.
2. You can use Airbnb and other platforms to sublet.
But what about Airbnb? Airbnb and other short-term renting platforms are having a hard time in New York City, since stricter laws came into effect. All spaces listed on Airbnb for short-term renting (less than 30 days), need to apply for short-term renting permits from the city. But if you want to host for periods longer than 30 days, you can still use Airbnb without this city permit.
3. You need to notify your landlord if you want to sublet your apartment.
All renters are entitled to sublet their apartment. Under the law a landlord cannot unreasonably withhold the right to sublet. However, the landlord can refuse to sublet with good reason. If you want to sublet your space, you must inform your landlord and give them a 30-day notice. You will also have to submit documentation about your subtenant. They likely will have to meet certain income and credit requirements to qualify. Your landlord has the right to ask for additional info within that 30 day or period, or deny the request (with good reason). If they don’t say anything, you can assume an approval after the 30 day window has passed.
4. You CAN sublet your rent-stabilized apartment – but there are restrictions.
Rent-stabilized apartments are also eligible for sublet with a few restrictions. You can only sublet the apartment for 2 years at a time. You cannot indefinitely sublet your space. If the apartment is unfurnished, the maximum you can charge the subtenant is the same rent you pay. If you leave the space furnished, you can charge a 10% premium on the rent. Not sure if your apartment is stabilized? Check out our comments here.
Subleasing your space at the end of the day is a contract. Both parties should set clear expectations on price, security deposit, timeline and other rules. Once you get approval from your landlord to sublet, get your subtenant to sign a sublease agreement. Here is a free template to get you started.
Have you ever subleased your space? How was the experience? Was your landlord flexible? Be sure to share an anonymous review on openigloo, and help the next renter that considers your building and landlord.
New York City has some of the strongest tenant protections in the country and has a stringent process of how and when renters can be evicted from their homes. While everyone hopes to never be at risk of eviction or potentially in a combative situation with a landlord, it’s important to know your rights. Here are 4 things every renter should know about evictions and illegal lockouts.
1. Only a City Marshal or Sheriff has the authority to carry out a Warrant of Eviction.
Eviction proceedings take time, and only a court order from a judge can result in an eviction. Landlords cannot force you to leave without an eviction order. Receiving a letter from your landlord is not an eviction either. If you’re uncertain about whether a notice you’ve received is legitimate, call 311 and ask for the Tenant Helpline.
2. An illegal lockout is when a landlord changes the lock on your apartment or removes your things without a legal eviction order.
Lockouts are illegal and considered a misdemeanor in NYC. If you find yourself in this situation, you can call the police and file a report. While the NYPD cannot help you regain access to your unit, they can take your statement and supervise while you get locks changed back. Go to nyc.gov/IllegalLockouts to learn more about what to do if you’ve been locked out of your apartment.
3. Short-term tenants and undocumented renters are also protected from evictions and lockouts.
You may think that because you don’t have a lease or are an undocumented immigrant that these laws don’t apply to you. That is false. Even without a formal lease, once you’ve lived in a space for 30 days you are entitled to the same protections as any other renter.
4. Landlords cannot withhold essential utilities and repairs.
In some cases, tenants may feel pressure to leave their home because the landlord is withholding essential utilities, such as water and electricity, and repairs, like ceiling leaks and holes in the floor. This kind of behavior is considered tenant harassment and is completely illegal. If you find yourself in this situation, report it to the City and keep everything well-documented. You can take your landlord to court for harassment, and if they are found guilty of tenant harassment, they could face penalties, including applying for building permits and other City programs.
If you are unsure about any of the above or what your rights are as a tenant, call 311 and ask for the Tenant Helpline to get free one-on-one support. Tenant Support Specialists can connect you with free legal resources and other guidance. The Mayor’s Public Engagement Unit also has resources with more information on how to protect yourself against evictions and illegal lockouts.
Have you ever had a landlord that didn’t respect NYC eviction and lockout rules? In addition to connecting with City resources, be sure to share an anonymous review on openigloo and help the next renters that may consider that building. During your apartment hunt, you can also check openigloo for the eviction histories of every address in NYC. This City data can help you assess which landlord portfolios are particularly known for their eviction practices.
In January 2023, rent increases on lease renewals for market-rate apartments in NYC were 8.1% compared to 17% a year before and 3.2% in December 2022. Rental activity seemed to cool in the latter months of 2022, but January saw a bounce back. 71% of New York lease renewals were still sub 5%. There was notably a big bounce in Manhattan rent increases, 11.1% vs. 2.4% last month. The neighborhood with the highest reported rent increases was the West Village at 36%.
Renting an apartment in New York is not easy. Housing is competitive, prices are volatile, and applications are invasive. First-time renters may be overwhelmed by how much information brokers and landlords ask for. At openigloo, we often get messages from renters asking us what’s normal for an NYC rental application checklist, as handing over dozens of personal documents to a stranger feels weird. But rest assured, these kinds of requests are very common.
Generally, landlords are looking to confirm 3 things: your income, your credit, and your rent payment history. In NYC, renters need to make 40x the rent and have credit of around 700 to be eligible for an apartment without a guarantor. The 40x rule means your annual gross household income needs to be 40x the rent (for example, if the apartment is $2000, your income needs to be $80,000 per year: 2000 x 40 = 80,000). If you want to prepare for your apartment hunt and get your application ready, this is what you’ll need:
1. 6 months bank statements.
Provide full PDF reports and not screenshots. Your name, address, starting and ending balance needs to be on the statements. Make sure these statements showcase bi-weekly deposits from an employer and rent withdrawals. Highlight these line items to make it easier for the application reviewer to identify. If you have multiple accounts, savings or investment accounts, you can include those as well.
2. Last 3 pay stubs.
These should be official receipts from an employer that showcase your gross and net income. Landlords want to see that you are working right now. Usually, they won’t take into consideration an offer letter for a job you haven’t started yet.
3. Employment Letter.
A short letter from your manager outlining your job title, salary, and how long you’ve been there will really help strengthen your application.
4. Last 2 tax returns.
This is another way for the landlord to confirm your income history. The income you declare should match the 40x rule. If it doesn’t (maybe you’ve since received a raise), explain that in your application.
5. Credit Report from the past 30 days.
Landlords may run your credit for you – this shouldn’t cost you more than $20. But if you have a valid report from the past 30 days, you can submit that. It needs to be the full credit report – not screenshots from Credit Karma or other websites. You can get a copy of your full credit report on Experian.
Landlords want to see that you pay rent on time. Show receipts, Venmo screenshots, or rent ledgers from your previous landlords, etc.
7. Landlord Reference.
While not mandatory, this will really help strengthen your application. Just a short letter from your past landlord that says you were a tenant in good standing with no issues.
8. Photocopy of your government-issued ID.
If you do not have all of the above, you may need a guarantor. A guarantor needs to make 80x the rent to have a credit score of around 800. Ideally, they should be US residents from the tri-state area. Double-check with the landlord or broker on whether guarantors are accepted. Your guarantor will need to provide tax returns, their credit report, and ID to confirm their eligibility. Get those items organized in advance to submit with your application. If you don’t know anyone that can guarantee a lease for you, there are third-party guarantor services you can pay to guarantee your lease.
Get your documents organized and in order on openigloo. You can use our applicant profile to send complete and strong applications to landlords and brokers across the 5 boroughs.
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.