Rents in New York City are notoriously inadequate and have hit an all-time high this year. According to a report by StreetEasy, the citywide median asking rent hit $3,500 in June, up 35% year over year.
Manhattan currently has the highest median rent at $4,100, but that doesn’t mean the other boroughs are ripe for bargains. Those who prefer to rent in the city but don’t want to pay astronomical prices are turning their attention to Brooklyn and Queens, which is also driving up rents there.
In June, the average asking rent was $3,200 in Brooklyn and $2,600 in Queens.
In both Brooklyn and Manhattan, renters spend more than 50% of their paychecks on rent, and in Queens they allocate more than 40%. This goes well beyond the rule of thumb that says your rent shouldn’t be more than 30% of your income.
These rental prices come as a shock to New Yorkers who moved here during the pandemic and to those who lived here long before.
“I just broke down for a whole week”
In the midst of the pandemic, tenants held the bargaining power. Now that many leases signed during the pandemic have to be renewed, the power is back in the hands of landlords.
Kacie Cleary, 39, and her husband have lived in their one-bedroom apartment on the Upper East Side since 2015 and received a $450 rent cut during the pandemic, bringing it down to $2,000. However, their landlord recently informed them that their rent would be increased by $700.
Kacie Cleary.
Photo by CNBC Do it
“When we got a new rent increase, we really wanted to speak to the landlord and discuss an option, whether we can negotiate a little bit or if there’s leeway,” she says. “And they just texted back within 15 minutes and said no they already gave us a preferential rate for that $700 raise. So they were unwilling to move at all in the negotiations.”
The two considered signing a lease somewhere else, but Cleary lost her job, so they decided to move into an Airbnb until she finds employment.
Ernestine Siu*, 23, moved to the East Village in January 2021 and landed an apartment with a roommate when prices were low.
“So our rent was actually reduced,” she says. “Also, our condo has an in-unit washer-dryer, which you don’t often find in New York City unless you pay a premium.”
This year, her rent has nearly doubled from $2,250 to $4,395.
Ernestine Siu.
Photo by CNBC Do it
“So when we got the lease extension in the mail, we knew right away that we weren’t going to do it,” she says.
She and her roommate began searching and were shocked at what was available.
“For a whole week I just broke down and looked at the prices,” she says. “One day I literally called my mom and said, ‘Mom, I feel like a failure. I can’t even afford to live in the city.’”
After touring three or four places, the two ended up at a place in Brooklyn that ended up costing $4,400.
“I’ve basically decided that I need to make a little lifestyle change and save where I can,” she says.
“I’ll store my things”
For some tenants, however, the rent increase was enough to get them out of town.
Thelma Rosa Annan, 32, moved into her Manhattan apartment in 2020 when it cost $1,882. In 2021, the rent increased to $2,400 and this year to $3,500.
Thelma Rosa Annan.
Photo by CNBC Do it
“I actually updated my page because I thought that was a mistake and I looked at the number and started laughing because it was so ridiculous,” she says. “I started laughing because I was like, ‘$3,500, $3,500, $3,500.’ I had to keep saying it out loud to myself because it was such a ridiculous number that I was like, ‘This can’t be possible.'”
While she’s grateful she’s spent two years in the city, she’s unwilling to pay the premium anymore.
“I’m going to store my stuff and go to Europe and work remotely there,” she says. “And hope that housing construction in New York will calm down.”
*Ernestine Siu is Associate Producer on CNBC Make It
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