Residential lease renewals are down in New York City, according to an article published by Bloomberg. As Equity Residential CEO Mark Parrell notes in the piece, the company has seen renewal rates at its properties decline by 5% since the beginning of 2022.
Although the pandemic has become largely manageable, and most ways of life have returned to some semblance of normalcy, it seems some tenants are once again leaving the city. This time, though, their motivation is different.
Pandemic Grace Periods Have Expired
Those who stuck around NYC over the last few years were partly able to do so because of the government programs implemented to prevent eviction. Additionally, during the first pandemic-related exodus, landlords experienced decreased demand and had to adjust their rental rates accordingly. A combination of these incentives kept renters in New York apartments, at least until recently. Now, the clock has run out on the programs, and demand has increased. The result is that new leases and lease renewals are subject to an average 21% increase in rent.
Tenants Leaving NYC Again
Whether tenants can't catch up with their back rent or because new leases are subject to higher rental rates, the effect is that people are once again leaving NYC in search of lower rent. Notably, even though some are leaving the city searching for a better bargain, landlords are experiencing an increase in demand.
Although lease renewals are down, landlords aren't having difficulty finding new tenants to sign new leases. The individuals leaving the city in the latest exodus don't seem to indicate a universal trend. Instead, demand for residential units is stable even under the rental rate hikes.
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