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Desperate NYC Tenants Are Waging Bidding Wars, As Rental Demand Surges
By
Jake Offenhartz
Published Oct 15, 2021
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By
Jake Offenhartz
Published Oct 15, 2021
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At least 70 prospective tenants wrapped around an Upper East Side building earlier this month, financial documents in hand, shouting numbers at a real estate agent as if at an auction. A few blocks uptown, another broker fielded close to a dozen offers above asking price on a fourth floor walk-up. In Prospect Heights, a two-bedroom, originally listed for $3,750 per month, leased for $4,500.
As New York City’s real estate market continues its dramatic turnaround, stories of tenant bidding wars have ricocheted across the industry. While such battles have long been a feature of home-buying, real estate experts say they are virtually unprecedented for the city’s rental market.
That began to change this spring, as the availability of COVID-19 vaccines brought droves of New Yorkers back to the city and, more recently, employers began ordering their workers back to the office. The sudden surge in demand has added a new wrinkle to the already vexing process of New York City apartment hunting.
Janna Raskopf, a rental agent at Douglas Elliman, said she’d never rented an apartment to a tenant for more than it was listed. Since Labor Day, she said, more than half of the units she’d leased were being bid up, often as much as 20% more than their asking price.
“There's a sense of urgency and desperation that I’ve never seen before,” said Raskopf.
Read More: Costly Broker Fees, Scourge Of NYC Renters, Return With A Vengeance
The bidding wars were first waged in the most desirable Lower Manhattan neighborhoods, including the West Village and SoHo. But brokers say they’ve seen offers above asking price in Upper Manhattan, Midtown, and swaths of Brooklyn.
Last month, Brooklyn saw its highest level of lease signings for a September since at least 2008, according to the Elliman market report.
Kirk Douglas, a 26-year-old who works in advertising, said he’d timed his move from the West Coast to coincide with the “New York City renaissance.” After his three-month sublet ended in September, he decided he wanted to stay in the city, and went about searching for a two-bedroom with a future roommate.
When they eventually found a perfect apartment in their budget with outdoor space in Prospect Heights, Douglas said he was informed by a broker that the place would likely be rented above asking price of $3,750.
“We decided not to bid out of principle, and also because the chances were extremely slim,” said Douglas. “We didn’t anticipate it being this challenging.”
The broker, Kristi Ambrosetti, said that the apartment received more than 20 bids, and ultimately rented for $750 above its asking price. Many of those offers came from people who had lost out on other apartments, the broker said, making them more likely to put in above-market offers, among other desperate measures.
“The ones that have lost three or four apartments are acting very aggressive, and they're smart to do so,” Ambrosetti said. “People are writing personal love letters to the landlords.”
The emergence of bidding wars comes at a time of growing disparity between the top and bottom half of New York City’s rental market, according to Jonathan Miller, head of the real estate appraisal firm Miller Samuel Inc. Nearly 20 months into the pandemic, the wealthier half of city renters are chasing COVID-friendly apartments, including those with outdoor space and large common areas for remote work.
“We're seeing very specific types of apartments that consumers are fighting over,” Miller said. “When you throw a surge in demand against fixed supply, you're going to see bidding wars.”
The Real Estate Board of New York defended landlords and brokers who encouraged bidding wars, which they blamed on the city’s failure to add more housing. As with hefty broker fees, there are no laws barring landlords from asking tenants to bid above asking price.
The Met Council on Housing, a tenant rights group, said they’d begun receiving their first calls from concerned tenants who’d encountered bidding wars in recent weeks. Andrea Shapiro, a program manager at the organization, faulted a decades-long trend of deregulation that has allowed more landlords to raise the prices on their apartments as they see fit.
“We're having these huge fluctuations in the housing market right now, and we know that whatever starts at the top of the market always makes its way down,” said Shapiro. “People paying 20% over asking price is not good for our city.”
Tagged
REBNY
renters
rent
covid landlord
new york city
manhattan
brooklyn
broker fees
real estate board of new york
economy
landlord
real estate
Jake Offenhartz
Jake Offenhartz is a former Gothamist reporter.
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Gothamist is funded by sponsors and member donations
Gothamist is funded by sponsors and member donations
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