For a grand total difference of around $120. Off a $4100 mean rent. That’s not a material difference at those rates. And its not a move towards more affordable rents. But again. We saw bigger drops during the early years of the ecconocolypse. They reversed themselves shortly. And in real effects most residents continued to see their rent go up year to year. So practically speaking it didn’t have an impact. And this won’t. Show me evidence of that being sustained long term, or of much bigger drops.
The real estate business world wide exploded a decade ago. And while foreclosures hit an all time high, and home values cratered. NYC property values and rents largely continued to go up. And the terms haven’t changed for NYC real estate. The tax structure, regulations, urban planning and population growth are still pretty much exactly the same as they’ve been since the 90’s. Short of a population exodus like the one seen in the 50’s and 60’s housing costs aren’t going to go down in a material way with the current approach.
I’ve run across some news stories and op eds indicating that developers and land lords might be sitting on vacant stock rather than renting it during these brief soft periods. Essentially they can afford to not bring any income in off a certain number (sometimes all!) of their units for up to a year as they wait for rents and sale prices to come back up. Why rent at $2700 in July. That just locks that rate in for at least a year, and caps raises there after. Wait till January and you can rent at $3200. Why sell in May at $2m if you can wait till August and sell at $2.4. Spread across thousands of units its apparently a good way to do business. There’s some speculation that that sort of withholding behavior might exaggerate some of the numbers with regards rents and values. Soft periods look softer because there are fewer transactions.
They know the demand is there, and that some one will pay what they’re looking for. Eventually. And they’ve got the resources to wait. These units aren’t built or owned by small local concerns or independent land lords. The middle and working class rent small spaces in crappy worn out buildings owned by small operators. Your landlord is a person you have met, who is very excited about this frost free refrigerator. The “luxury” units (which would often qualify as normal housing elsewhere save for the price. Buddy of mine lives in one of those buildings) are built, owned, rented and sold by big development companies. Your Landlord is an LLC.
