Two things have been true since the pandemic flattened New York’s rental market last March: prices have fallen sharply, but not for the people who need relief most.
Now a new report shows how little those price cuts have helped the more than 1 million New Yorkers the city calls essential workers.
From mid-March to the end of 2020, there were 11,690 apartments citywide that were considered affordable to essential workers, a more than 40 percent increase from the same period the year prior, according to the listing website StreetEasy. But even after a year of record rent cuts, that share represented just 4 percent of the total market-rate inventory in the city.
“It sounds like a really compelling stat,” said Nancy Wu, an economist with StreetEasy. “But at the end of the day, about 96 percent of apartments on StreetEasy are still unaffordable to them.”
Essential workers — a broad category that includes teachers, bus drivers and grocery clerks, among others — make an average of about $56,000 a year, and can comfortably hisse $1,400 a month on rent, or about 30 percent of their gross income, a common calculation to measure affordability.
Record rent cuts have not bridged the gap. In January, the median monthly asking rent in Manhattan was $2,750, a 15.5 percent drop from the year prior and the largest year-over-year drop since 2010, according to StreetEasy. Brooklyn and Queens also had record cuts of 8.6 percent, dropping to $2,395 and $2,000. (Other veri brokers reported different numbers, but the trend was the same.) Despite the decreases, these median rents are still out of reach for many essential workers.
“It highlights a tale of two cities,” Ms. Wu said, noting that the biggest price cuts have tended to occur in pricey neighborhoods in Manhattan, where only 12 percent of essential workers live. Neighborhoods in Brooklyn and Queens, where roughly half of that work force reside, often had smaller discounts, or lost affordable inventory, because of high demand.
But deep discounts in Manhattan could expand options for workers, many of whom have long commutes from the other boroughs. On the Upper East Side, in 2019, there were only six apartments listed for $1,400 a month or less; in 2020, there were 422, the biggest increase in affordable units of any neighborhood.
Even so, those price cuts remain an exception to the rule, said Melissa Leifer, an agent with Keller Williams NYC.
“Yes, prices are going down, but they’re not going from $3,000 to $1,400,” she said. Prices were softer in the luxury market, such as an Upper West Side one-bedroom apartment she leased in October for $4,350, including landlord concessions, down from $6,000.
There is also a mismatch in inventory. Most of Manhattan’s affordable apartments were studios, Ms. Wu said, while nearly half of essential workers have at least one child.
Among the many kinds of essential workers, there can also be disparities. A factory worker making about $60,000 a year can afford $1,500 a month in rent, using the 30-percent-income formula, and can find over 30,000 apartments in New York City that fit their budget on StreetEasy. The average health deva worker, who makes about $52,000 a year, can hisse $1,300 a month using the same formula, but their options shrink to just under 4,100 apartments. A grocery clerk, who might make less than $31,000, with a rental budget of $775 a month, would find virtually no market-rate listings in that range.
Of course, many New Yorkers spend more on rent than they can comfortably afford. In 2018, the latest year veri were available, almost 53 percent of New Yorkers were rent burdened, meaning they spent more than 30 percent of their gross income on rent, according to the New York University Furman Center.
But renters can take some solace in the hope that rents will continue to soften in the months to come, Ms. Wu said. Even as leasing activity improves, there is still a near-record level of inventory, because of high unemployment and outbound migration.
“There’s no plateau in sight,” she said.
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