Rent Rates Rise as Manhattan Apartments Grow Scarce

January 18, 2012 by Leave a Comment

Manhattan apartmentsIndustry studies show that the average rent on Manhattan apartments has risen to a point close to pre-crash rates, according to the New York Post. Over the same period, vacancy rates dropped considerably as residents rented at near-record rates.

The average rent for Manhattan apartments was $3, 309 per month in 2011, up from $3, 046 in the previous year. Rates rose across the board, regardless of apartment type: studios and one-bedrooms saw an 8% increase in rent, while two and three-bedrooms saw a 9% increase in rent. At the same time, vacancies fell from 1.16% in 2010 to 0.96% in 2011.

This bucks the trend seen in the rental market since the average rent on Manhattan apartments hit its record in 2007 at $3,310 per month. After that, rent rates dropped consistently with each year.

Experts see the renting trend as a result of a tight mortgage market and an unstable economy. For residents uncomfortable with making a commitment to a mortgage, rentals seem like a safer option.

While rentals (where they can be found) may seem safer from a fluctuating buyer’s market in Manhattan, they aren’t immune from it: studies have also shown that landlords are less likely to make concessions like paying for the first month’s rent or paying broker fees.

Filed Under: Landlord information, Tenant information

East Village Historic District Approved by CB 3

July 28, 2011 by Leave a Comment

East Village Historic District, CB3

East Village Historic District Approved by CB 3

Tuesday night, Community Board 3 voted in favor of the proposed East Village Historic District after a contentious public session in which local religious leaders once again expressed their concern over landmarking. The vote is another step towards the city’s Landmark Preservation Committee’s official establishment of the East Village Historic District.

The two proposed districts, one that runs along 2nd Avenue between East 7th and East 2nd Streets and another that runs along East 10th Street between Avenue A and B, have been a point of contention in the community since they were proposed by the LPC earlier this year. Preservationist groups have been adamant in support of an East Village Historic 

District as a way of protecting the neighborhood from overdevelopment and as a way to preserve the neighborhood’s rich immigrant history. However, religious leaders have expressed concern over landmarking, and they fear that having a landmarked building would make repairs and renovations both costly and inefficient.

Discussions during the public session were evenly split between those in support of an East Village Historic District and those who were against it. Some religious leaders called for “a third way”-a path to landmark status that protects

houses of worship from the perceived costs-while others called for a return to mediation sessions that had ended in February. Preservationists argued that the concerns of religious groups were unfounded and that a delay in the proposed district was impractical if the neighborhood was to be protected from developers looking to build in the neighborhood.

Ultimately, the board split the vote to cover the two separated districts. The East 10th Street district was approved unanimously, while the 2nd Avenue district was approved by a vote of 23 to 9.

Now, with the community board’s recommendation, the proposal for the East Village Historic District will have to be approved by various city agencies, culminating with a vote from the City Council. Area councilmember Rosie Mendez has already expressed her support for the historic districts.

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Rent Board Raises Rents for Stabilized Apartments in NYC

June 28, 2011 by Leave a Comment

New York apartment, Rent Guidelines Board, rent stabilized apartment, Rent Stabilization Association, Joe Strasburg, affordable housing New YorkYesterday New York City’s Rent Guidelines Board agreed to an increase in rates for lessors of all apartments in New York that are rent stabilized.  The approved changes would raise the limit on rent hikes to 3.75 percent on one-year leases and 7.25 percent on two-year leases.

The vote comes after the state agreed, at the last minute, to extend current statewide rent regulations until new laws can be agreed upon. As with the controversy upstate, city tenants have taken issue with the steady rent increases.  Joe Strasburg, chairman of the Rent Stabilization Association, told the New York Post that the decision was yet another step towards the elimination of affordable housing in New York.

The meeting, held at Cooper Union, was fraught with tension as tenants voiced their anger at the Rent Guidelines Board. Protests were held outside of Cooper Union as tenants objected to what they see as landlord greed.  New York’s rent-stabilized apartments are viewed as the last refuge for affordable housing in a city that is getting progressively more expensive.

Jesse Duperon, a 51-year-old East Village resident, told the New York Daily News that the decision was “economic injustice.” She added, “They’re chasing us out of our own city.”

The board decision is the latest increase for rentals in New York.  Last October, rent hike limits on New York apartments increased to 2.25 percent for one-year leases and 4.25 percent for two-year leases.

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Rent Regulations Expire With No New Plans in Sight

June 18, 2011 by Leave a Comment

NYC rent control, rent stabilization, rent control laws, rent control extension, Albany rent control, Cuomo rent control, Kevin Korber

 

The New York Daily News reports that the New York State Senate rejected a proposal to extend expiring rent regulations while new regulations are still being discussed among lawmakers. The extension, proposed by SenateRepublicans and supported by Governor Andrew Cuomo, was rejected by some Republicans and all Senate Democrats under the argument that it failed to strengthen tenant protections.

Lawmakers in Albany are still in discussions over the provisions of new rent laws, with pressure coming from both tenants’ organizations and real estate developers. Democrats are pushing for more protection for tenants in rent-controlled apartments, while Republicans want to keep current rent regulations as they are, along with added tax incentives for developers and owners of large apartment buildings.

Governor Cuomo pledged to keep the legislature in session until a long-term agreement can be reached. He said that expiration of the old rent laws, which occurred on Wednesday, would not lead to a housing crisis, but warned that a crisis would occur if no long-term rent regulations were in place soon.

Update: Albany has agreed to a last minute, brief extension of the rent control laws while the legislature continues to work toward a viable resolution to the standoff.

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City’s Landlords Push For New Rent Laws

June 15, 2011 by Leave a Comment

The Wall Street Journal reported on the latest debate over new rent regulations taking place in the New York State legislature. The Democrat-controlled State Assembly has been Rent Stabilization Association, rent stabilization laws sunset, Albany rent laws, Real Estate Board of New York, rent regulation debatepushing for broader rent regulations than the ones that currently exist, but landlords and real estate developers have been resistant to such measures.

The debate over regulations had not been discussed in much depth in Albany until recently, now that the current rent laws are set to expire on Wednesday. Landlords and large developers then presented their suggestion for new legislation, which included tax breaks for developers of new apartments, a tax cap for building owners, and legislation that would reverse a court decision that lowered rents on certain apartment buildings.

The proposed changes were brought to the legislature by the Real Estate Board of New York, which represents developers and owners of large apartment buildings. Currently, the Republican-controlled State Senate has introduced legislation on the measures, though Majority Leader Dean Skelos has not expressed support or opposition to the proposals.

On the other side of the debate is the Rent Stabilization Association, which represents owners of small and medium-sized apartment buildings. They have expressed opposition to the Real Estate Board’s ideas, arguing that the tax breaks would exclusively benefit owners of large buildings. The Rent Stabilization Association, as well as other interest groups representing small building owners, has pushed both houses of the legislature to maintain current rent regulations as they are.

The State Senate plans to take a vote for a temporary extension on the current rent laws by Wednesday. Then, it’s assumed that the in-depth discussion of new rent laws will begin.

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Owners Outraged Over Increased Property Tax Bills in NYC

May 4, 2011 by Leave a Comment

NYC property tax increase, tax assessment increase, NYC department of finance

According to the Wall Street Journal, condo and co-op owners blasted the city’s Department of Finance at a hearing yesterday over new property valuation methods that led to some property assessments increasing by as much as 140% in value. That increase could lead to co-op and condo owners paying as much as 40% more in property taxes.

Last year, the Department of Finance began using different valuation methods when analyzing and assessing the value of properties. Under the new system, it was discovered that many co-op and condominium apartments were being undervalued by the city for many years.

The new changes in valuation are set to take effect for 906 buildings citywide. Some buildings are facing an assessment increase of 86% over the previous value.

Homeowners expressed anger not only over the steep rate increases, but also that the changes were implemented without warning. City Councilman Domenic Recchia Jr. said that the Department of Finance “ambushed” homeowners with rate changes that “literally took place overnight.”

With condo and co-op owners set to take a huge hit in property taxes, the question has been raised as to how to offset tax increases to help homeowners.  The Department of Finance is currently implementing a cap on property assessments set at 50%, while a bill in the State Senate is proposing that property taxes on co-ops and condos be capped at a 6% rate. The bill would also re-classify co-ops and condos in the same tax bracket as single-family homes. Currently, they are assessed as rental property.

Finance Commissioner David Frankel said that he would recommend changes to the tax code to relieve homeowners, but that he did not support any property bills currently in consideration by the state legislature.

UPDATE: Commissioner David Frankel, bowing to heavy political pressure, has agreed to limit co-op increases to no more than 10% above last year’s bill.

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Bloomberg to Require Cleaner Burning Heating Oils in NYC Buildings

April 22, 2011 by Leave a Comment

Plan NYC, Bloomberg heating oil, #4 oil, #6 oilYesterday, Mayor Bloomberg released information regarding his PlanNYC Clean Heat Campaign that will require certain buildings to switch to cleaner burning heating oil.  Currently only 1% of buildings in the city use the dirtiest types of oil (#6 and #4), but they produce more soot pollution than all of the cars and trucks in the city combined and a total of 86% of the pollution produced by all buildings.  Fine Particulate Matter (such as soot pollution) is a pollutant that is responsible for over 3,000 deaths and 2,000 hospital admissions in the city every year.

“The new rules adopted today will phase out Number 6 heating oil by 2015 and Number 4 heating oil by 2030,” said Mayor Bloomberg. “But such regulations are only part of the answer. They tell building owners: ‘Thou shalt not.’ We’ve got another message to deliver, too: ‘We can help you do the right thing.”  On that note, the administration is working to cut the red tape in the permitting process required for boiler conversions.  The city is also working with ConEd and National Grid to accelerate upgrades to the natural gas distribution system in order to make alternative fuels accessible to more building owners.

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Bob Knakal Spars With Tenant Advocate Over Rent Regulation

March 28, 2011 by Leave a Comment

Yesterday, Gov. Andrew Cuomo announced that the state legislature has agreed to a $132.5 billion spending plan for the State of New York that addresses the $10 billion deficit facing the state. According to the governor “We set out to build a new New York. It’s the first step down that road.” However, Albany has not yet addressed the sunset of the rent regulation laws that will expire in June.

In this video, Bob Knakal, Chairman of Massey Knakal Realty Services speaks with Maggie Russell-Ciardi, the Executive Director of the NY State Tenants and Neighbors Coalition. They specifically address the $2k deregulation threshold currently in place as well as the decision in Roberts v. Tishman Speyer that had a dramatic impact at Stuytown at the end of 2009.

The Real Deal from The Real Deal on Vimeo.

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Manhattan Rental Market Starting to Sizzle

March 9, 2011 by Leave a Comment

According to an article in Crain’s this afternoon, the Manhattan rental market is back to the pre-crash days when it comes to rising rents, decreasing inventory, and torrid demand. Only 16% of all Manhattan transactions in February included any landlord concessions (e.g.free rent or payment of the broker’s fee).  In fact, that was down from 21% in January.  The vacancy rate in Manhattan dropped to 1.18% and many expect it to slip below 1% as we approach the high-velocity summer rental season.

“Many clients come into our office expecting us to help them find that great deal their friend got last year” said Kate Akerly of Charles Rutenberg LLC, “but the reality is that they may not be aware that the market has shifted dramatically from those days.”  On that note, a market report released today showed that the year-over-year pricing for studios is up 7% to $1,756, one-bedrooms increased 9% to $2,335, two-bedrooms rose 10% to $3,283 and three-bedrooms leaped 12% to $4,347 from February 2010.  Keep in mind that those numbers are average rents for all apartment types across Manhattan (from walk-ups to high-rises and the West Village to Harlem).  The averages are well below the cost of renting in the best neighborhoods or in doorman buildings and dramatically below if you want both!

So what does this mean for renters?  The following are some tips and things to keep in mind if you will be searching for an apartment in the coming months:

  • Choose your broker approximately five weeks before you expect your lease to start.  In a low inventory market, a broker with access to up-to-date availabilities is more important than ever.
  • Assuming that you intend to move-in on the first of the month, begin actively searching on the first of the month prior when tenants deliver thirty days notice to their landlord.  The best inventory will rent quickly, so try to secure a lease by the 15th at the latest.  It is possible to start sixty days in advance, but only expect to view apartments that are listed as available for your move date.  Those may be limited.  The landlord will not “hold the apartment” vacant for you until you’re ready to move.
  • Speak to your broker about the paperwork that will be necessary and gather it all before you start looking for apartments.  You want to be able to submit a complete application as soon as you find an apartment you’re interested in.  If you require a guarantor to qualify, have their paperwork organized as well.
  • Expect to pay a broker’s fee.  The fee to rent a condo or co-op is typically 15% of the annual rent.  In rental buildings your broker may agree to accept as little as one month’s rent.  Don’t expect the landlord to cover the fee for you in this market.  If you really want to avoid the fee, search for ads posted by management companies and owners online.  Be aware that “No fee” broker ads are often used as a bait-and-switch by unethical agents.  Additionally, they are very rarely that broker’s exclusive listing, which means that it may not even be available by the time you call about it.  Also, keep in mind that landlords offering “no fee” rentals often charge more than their condo or co-op competitors.  This is also a good time to decide if you want to live in a rental building owned by a large landlord or an apartment owned by a single investor such as a condo.
  • Early in your search, consider expanding your criteria so that you may consider neighborhoods and buildings that may not be your first choice.  Once you learn the market, focus on one or two geographic areas that you like the best and that you can afford.
  • After seeing enough apartments to feel comfortable that you have a handle on the market, be prepared to submit an application as soon as you see something you like.  With the vacancy rate hovering around 1%, good listings will be rented very fast.
  • Don’t expect the landlord to engage in an aggressive negotiation.  In a tight rental market the landlord knows that other applicants will likely be right around the corner if they don’t accept your offer.
  • Have realistic expectations.  If you view fifteen apartments you can assume that you have a reliable sampling of the current market.  Don’t expect that any day now an apartment that’s 30% larger will magically appear for 25% less than everything else you saw.  It probably won’t and you will miss out on the best inventory available during your search period.

If you would like to speak to a member of our team about your apartment search, give us a call at (212) 400-4838 or e-mail us at yourkeytothecity@AkerlyRE.com.  Feel free to to start your search here in our database of currently available NYC listings.

 

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