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Manhattan Rents Are Higher Than Ever

According to Citi Habitats, New York’s largest brokerage form, the average rent for a place in Manhattan now stands at $3,418 — more than it was back in 2007, at the height of the real estate bubble. More specifically:

Rental averages are up in every category, with one-bedrooms rising the most, by 6.5 percent over the past year, to $2,747, according to the Citi Habitats report. Studios rose 3.6 percent, to $1,953; two-bedrooms climbed by 6.1 percent, to $3,865; and three-bedrooms rose 4 percent, to $5,107.

Perhaps you’re thinking there’s some kind of silver lining to this. After all, an increase in rental prices means everyone’s making money, right? Not exactly.

The uncoupling of the national economy from New York rents is not typical, said Jonathan J. Miller, the president of the appraisal firm Miller Samuel. “When you see rents rising, it is usually reflective of a strong economy,” he said. “That is not the case now.”

Instead, he said, prices are being driven up by a tight credit market that forces people to stay in the rental market and limits new construction.

As usual, there are basically two realistic solutions to this problem, and you know what they are: 1) Downsize and 2) Just move to Brooklyn already. Or, like 25-year-old Joseph Rosati, you can go with what sounds like a pretty 2007 strategy, “Pay more for more.”

Last year, Mr. Rosati and two friends were living in Murray Hill, paying $3,700 for a two-bedroom apartment that they had converted to three. When the landlord decided to raise the rent to $4,300 last July, Mr. Rosati decided to shop for a new place.

The group could not find anything acceptable for under $4,700. They decided that if they were going to shell out that kind of money, they might as well spend a little bit more to be in a neighborhood they liked better.

Rosati and his crew are now living in a Wall Street two bedroom “with an office,” for which they pay $5,400: “They signed a two-year lease, fearful that they would get hit with another increase if they did not.” Ah, Manhattan, where constant anxiety comes included in your rent, like heat and hot water (sometimes.)

The City of Sky-High Rent [NYT]

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