Manhattan apartment rents are falling for the first time since the Great Recession — and with less reason to think they’ll rebound any time soon. That signals big trouble for the entire city.
Collapsing demand is behind the second-quarter drop, notes StreetEasy Market Reports: Residents, especially high-income ones, continue to flee the pandemic.
And with restaurant seating limited and virtually all other public activities on hold, there isn’t a lot of reason to stay if you can go: New York City is a far, far less attractive place to live right now — and perhaps for a long time to come.
Rents overall grew slightly in Brooklyn and Queens — but nearly a quarter of rentals were discounted. In Manhattan, more than a third came with a discount, slicing median rents about $221 a month.
The drop was highest for the priciest units, StreetEasy reported. And the average cost to buy an apartment also fell 4.1 percent from last year, to $1,062,276.
And, of course, many tenants aren’t paying at all: Bloomberg Businessweek found that a full quarter of city renters have gone four months without paying. That means they’ll owe thousands of dollars when the time comes to pay, while many who’ve lost their jobs can’t pay.
This leaves landlords in dire straits. Property values are sinking, and the city will have to admit that sooner or later and accept a distinctly smaller tax take. Indeed, commercial rents are likely hit even harder.
The people who move away won’t be paying taxes in the city, either — nor spending money here to support lower-income jobs.
Cheaper rents are a plus for those who stay — but the city’s recovery mountain keeps getting steeper.
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