In the middle of my frustration with the rent on my apartment being increased and facing the prospect of moving in New York City, I came across this New York Times article about how the balance of power in landlord/tenant relationships has shifted this year. It turns out that last year when I rented an apartment I benefitted from the fact that it was a renter’s market. That’s not true anymore, and apparently my situation is not at all unique. Every topic that the article covered from the deal I got on my apartment to the process of looking for a new apartment was something I have experienced in the past few weeks. Because this is the only place I have seen this issue mentioned, I feel compelled to bring this information to the public.
Last summer when I was looking to move in with my boyfriend we found a place through a broker. I had never used a broker in the past because the broker’s fees (usually one month’s rent or 15% of the annual rent) were prohibitively expensive; and, why use a broker when you can find a terrible roommate on craigslist for free! With this broker it was different though, because the building, presumably desperate to fill vacant apartments, was paying the broker’s fee. I benefitted from this arrangement because the broker did the legwork for me and I didn’t have to pay the price. I also got a really sweet deal on my apartment. The reason? They throw in 2 months “free.” This means that there is a base rent for the apartment ““ say $2,000 a month, but because they add 2 “free” months to your annual lease the actual rent you pay monthly is $1,714. What previously may have been an apartment slightly outside of your budget magically becomes one you can afford! Awesome, right? Totally!…until the lease renewal comes and they are raising your rent and the rent they are basing it on was that less-than-affordable $2,000 a month. Now that awesome deal of below-market rent you got on your apartment becomes the market rate and exponentially higher. And they’re not throwing in free months anymore because they’re not desperate anymore and they already got you in the building. So now you’re in the not-awesome position of either having to cutback elsewhere so you can make your rent or you’ve just been, as they say, priced out of your apartment.
But, never one to be a Negative Nellie you think about what a great opportunity this is. You can move into a less-expensive neighborhood, out of the city and really start saving money. Great! But…it’s going to be harder this time. Landlords aren’t paying the broker’s fees anymore. So either you can do the work yourself or shell out that extra month’s rent for a broker. Loathe to front even more money, my boyfriend and I really tried to find apartments on our own. But sifting through Craigslist is tiresome and frustrating. There are so many scams and apartments that are advertised deceptively. We ended up using a broker and while we don’t love shelling out the money, we’re hoping that we are able to avoid entering into this same situation in a year where we have to move again. Even using a broker wasn’t that easy. When I applied for the apartment we’re moving out of I did not meet the income requirements ““ typically they require that you make 40 times the monthly rent. But, again the desperation must have clouded their judgment because the building said “Fine! No problem! Just get yourself hooked up with a guarantor! Hope you can make your rent! Good luck!” Maybe the landlords wised up to the fact that people are still getting laid off and that jobs aren’t secure. Maybe they got tired of having to deal with guarantors. But the first apartment that we applied to had an even higher income requirement (52 times the monthly rent) and required a second security deposit equivalent to a month’s rent. This seemed completely unnecessary and we were frustrated by it, but apparently isn’t all that uncommon, according to the New York Times. Some places are requiring a guarantor or second security deposit no matter what your income.
One anecdote in the New York Times pieces was about a man whose lease renewal came with a rent increase far above to 10% legally allowed in New York City. For some reason he decided to stay in the apartment and pay the higher rent. One thing I can say I’m proud of is that we may be moving to an Outer Borough, but at least we have the sense to not be completely screwed by the landlord power shift.