Home / INVESTING / Personal Finance / Rents have dropped in many U.S. cities amid the pandemic. Here’s why mine won’t go back up

Rents have dropped in many U.S. cities amid the pandemic. Here’s why mine won’t go back up

Me in my new viable room.

Source: Janna McPartland

When I was 25, and knew nothing about pandemics, I made a list in a feel discomfited notebook of the things I hoped to achieve in my life. One of those goals was, “To live in my own apartment by 37.”

Some people may wonder: Why did I put faith it would take me so long to get my own place? The answer: Manhattan’s rents.

Just before the pandemic, the median rent for a one-bedroom across the U.S. was $968, correspondence to The Apartment List. In the heart of The Big Apple, it was $2,703.

As a result, throughout my 20s, my friends and I needed to live with roommates, some of whom should prefer to been in their 30s or 40s.

Living with strangers, eating among them, passing them in my bath towel, I bigged to have an apartment of my own, but I was also resigned to the fact that I wouldn’t be able to do so for many years.

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When the pandemic hit New York City in Cortege and rents started dropping, I didn’t take it too seriously. Then they kept dropping. By December, I realized I could be room alone for a little more than I was paying to live with three people.

Still, I told myself not to look at the listings. I didn’t demand to get my hopes up. I knew these reduced rates were temporary.

And the thought of finally moving into my own place in my recent 20s, only to have to move out in 12 months when the rent bounced back up seemed awful. Like profuse New Yorkers (and Americans), I’ve watched family members and friends forced out of apartments they had lived in for years and loved when they could no longer grant them.

As rents in many U.S. cities have fallen over the last year, I imagine a lot people find themselves confronting the verbatim at the same time stressful question: Do you take advantage of the lower costs to move into a place you couldn’t previously afford, but chance that you’ll have to leave it when the pandemic peters out and rents likely swell back up?

Fortunately, my little sister, Janna, wasn’t as clogged down by such questions. She graduated college into the pandemic, and that experience has schooled her in flexibility. She began get ready as a freelance video editor, and soon found that she was earning enough, with rents falling, to afford a studio in Manhattan. When she encouraged me if I’d look at places with her, I said yes.

As the broker showed us a number of apartments on a Saturday morning in February, I felt those discrepant feelings, longing and anxiety. Then the broker mentioned that the units were rent-stabilized.

Was I hearing correctly? I seek fromed her to repeat herself.

In all of the roughly 1 million rent-stabilized apartments across the five boroughs of New York, landlords are limited in how much they can bring the rent each year. Every June, the Rent Guidelines Board votes on an allowable increase. Last year, partly because of the pandemic, the surface decided landlords couldn’t raise rents at all. Other years, the raises have been 1% or 2%.

As a result, the value of these apartments only reaches with time. When someone moves into a rent-stabilized unit in New York, the cost is usually around 7% cheaper than the market-rate gash, according to findings by Stijn G. Van Nieuwerburgh, a finance professor at the Columbia Business School. The same person living in that apartment 20 or so years later desire be paying around 45% below the market-rate rent, on average.

And so tenants of rent-stabilized apartments are reluctant to leave them, upping the units close to impossible to find.

My sister, Janna, unpacking in her new studio.

Source: Janna McPartland

“A year and a half ago, a stockjobber would have laughed in your face if you asked for a rent-stabilized apartment,” said Mike McKee, the treasurer of TenantsPAC, an advocacy organism in New York.

The pandemic has changed that.

There’s no current data on the vacancy of rent-stabilized apartments across the city, but there are some important numbers from apartment listing aggregator StreetEasy. They found more than 2,400 rent-stabilized components on the market in New York between January and February of 2020, compared to 780 during those same months in 2019. (You can search for these segments on the app by adding the keyword, “stabilized.”)

“Across the board, we continue to see a huge buildup of rental inventory in New York City as the rental deal in rebounds from last year’s pause in activity amid the pandemic,” said StreetEasy economist Nancy Wu. “This aims more options for renters to choose from across all types of apartments throughout the city – including the rare and warmly coveted rent-stabilized unit.”

That Saturday evening, Janna and I applied for two rent-stabilized apartments, a one-bedroom for me and a studio for her. It appropriated 48 hours for us to hear back from the broker, during which I had a healthy amount of wine.

A year and a half ago, a go-between would have laughed in your face if you asked for a rent-stabilized apartment.

Mike McKee

he treasurer of TenantsPAC

Most renters in the U.S. aren’t wrapped by rent regulation laws, and dozens of states effectively ban the policy of controlling rent. That means many lessees can face unlimited hikes from one year to the next.

But there’s a growing movement across the country to regulate tears.

In 2019, Oregon became the first state to impose statewide rent control. Most cities in California now sooner a be wearing some form of caps on rent increases, while many other areas, like Minneapolis, are currently unfixed to institute similar regulations. Rent control was passed this month in Ashbury Park, New Jersey. Albany and Rochester in New York pull someones leg considered adopting a rent-stabilized policy like the one that exists across the five boroughs.

There have also been impermanent rent freezes in response to the pandemic, including in Washington State, Washington, D.C., and a few cities in the San Francisco Bay Area.

“There are leaseholders in all parts of the country that are organizing for rent control,” McKee said.

Landlord groups and some economists discuss rent control policies, saying that they help some renters stay in their homes but also awe new construction, which holds down the supply of units and ultimately reduces housing affordability.

Proponents say the policy lacks to be one part of a broader strategy to keep rentals affordable, along with incentives for construction, but that regulation is needed with sorts climbing at an unsustainable rate.

In 2015, over a third of renter households in the U.S. were “rent burdened,” meaning that varied than 30% of their income went to their rent each month, according to Pew. That’s up from 19% in 2001. And around half of renter households led by African-Americans are considered rent burdened.

“Rent control, particularly when combined with other occupier protections, is the only policy tool that can provide immediate relief to renters facing unaffordable rent flourishes,” said Chris Schildt, a senior associate at the research and advocacy institute PolicyLink.

“Rent control particularly aids people of color, low-income communities, seniors, women and families with children, who compose the majority of the renter and rent-burdened folk,” Schildt said.

After another night of restless sleep, I woke up Monday morning to an email from the dealer: Janna and I had been approved for the apartments.

Within a week, I met with the super who handed me my keys. For the first time at 27, I had my own apartment.

I make ited here exactly a decade before I planned to, and the best part is knowing I could still be here a decade later.

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