New York, adoringly dubbed as “The Big Apple,” is arguably one of the most enticing places to live in for many people. It is actually one of the most overpopulated cities in the world. Despite this, there seems to be a surprising lack of tenants living in apartment flats in the tall towers surrounding the always-crowded busy streets.
This interesting mystery has reached a level considering that the population in the city continues to grow. The big question is: Why are there too many vacant apartments if there are many people in New York?
What the Naked Eye Can See vs. The Actual Situation
The situation in New York, while mostly invisible to tourists, is starting to get serious. If the analogy were based on the Laws of Supply and Demand, the presence of too many apartments and lack of apartment owners or tenants would mean that the price of rent will decrease considerably.
Surprisingly, that is not the case.
To understand the situation, we have listed down certain things that onlookers have observed in New York City’s rental situation:
- Manhattan neighborhoods feel empty at night because of the dark Fifth, Madison, and Park Avenue apartment buildings amid the brightly lit city streets.
- The population in New York has already reached a record high
- In 2016, New York reached the projected population for 2020.
- About 50,000 new residents move to New York City every year. Meanwhile, those who are leaving the city are pegged to be between 20,000 and 30,000 people only.
- If analyzed, these numbers would create a constant demand for housing and might even put a strain on the real estate industry.
This information points towards the opposite of what is being reported. If there are a lot of people living in New York, why would there be excess apartments that remain vacant? The answer may lie in a 2011 report published by the New York Times.
According to the report, some neighborhoods in Manhattan feel like a ghost town due to the significantly empty apartment buildings. Although this makes it seem like very few people want to rent apartments in the area, it isn’t the actual situation.
The truth is rich and powerful people, whom the media outlet dubbed as “out-of-towners,” own apartments in the borough that they rarely use. It turns out, they only consider their Manhattan apartments as investments and don’t actually use them as living spaces.
Taking this into account, it seems like some people have started to manipulate the industry in a way that would benefit them. Here are the things NY Times and other media outlets pointed out:
- After 2000, apartments in Manhattan owned by absentee renters went from 19,000 to almost 34,000, a staggering 70 percent increase.
- Real estate prices and sales in Manhattan dropped to a record low in the last quarter of 2017, based on a report from CNBC. This may have been caused by the looming uncertainty with the Republican tax plan, brokers explained.
- Prices of rentals continue to shoot up in Brooklyn and Queens, while the sales in both boroughs decreased. This was presumed to be caused by an increase in mortgage interests and amendments to federal tax law.
- Real estate brokers don’t consider the decrease in sales to be necessarily bad.
Although this information may seem illogical at first glance, a closer look shows that the situation in Brooklyn and Queens are entirely different from Manhattan.
For the two boroughs, the sales decreased, but the prices shot up which means that brokers are aiming for quality sales over quantity. Meanwhile, Manhattan prices remained stagnant as there are always wealthy people who can— and will— buy apartments anytime.
The only thing that makes sense for both situations is that those in the upper echelon of the economy remain with the advantage. For Brooklyn, the prices are too high that only very few people can afford it. For Manhattan, only those who can afford it have already bought spaces they don’t even use.
Mistakes You Should Avoid When Renting In New York
Although it may seem hopeless, you shouldn’t give up hope that you will ever find a place to live in the Big Apple. What you need to do is to make sure to follow these best practices when renting in New York:
- Never forget to bring requirements should you need to submit an application for an apartment you love. This may include proofs of identification, employment, and income.
- Always know your credit score. This will make it easier to gauge which apartments are within your paying capacity.
- Prepare your requirements and criteria for choosing an apartment. This will make it easier to narrow down your options significantly.
- Don’t look for rentals in the summer. Since it is the peak season, prices will most likely be higher than during any other time of the year.
- Search for apartments at least 25 days before your expected moving date.
- Never apply for too many apartments at the same time.
- Carefully review your lease before signing it.
Knowledge and thorough understanding of the situation is your best shot at finding the perfect apartment in New York City amid all these issues.