High rents driving Manhattan’s vacancy rates up: Reports

Buildings along East 1st Street between 1st and 2nd Avenues. Photo Credit: EPA / Mike Nelson

New Yorkers have had enough with skyrocketing rents in Manhattan and are increasingly avoiding the borough for cheaper pads elsewhere, according to a real estate report released Thursday.

The survey conducted by Citi Habitats indicated jumps in Manhattan’s vacancy rate in November, continuing the trend of the past six months. In fact, Citi Habitats’ overall vacancy rate, 2.02%, represents the highest level in six years, with the East Village leading the way with a 3.24% vacancy rate.

With Manhattan rents averaging $3,464 last month, renters are sending a message by choosing to live in other boroughs, according to Gary Malin, Citi Habitats’ president.

“We have a great city. We have a great product and owners are going to push (with high rents) until the tenants fight back,” he said. “Well, now they’re fighting back.”

Manhattan rents jumped about 2% from the same period last year, according to Citi Habitats.

Another Manhattan market report released Thursday, by Douglas Elliman, showed a 2.87% vacancy rate. It said the average rents went up 2% from $3,993 in November 2014 to $4,071 last month. The real estate group MNS said average rents were $3,945 last month, a 4.83 % surge from the same period last year, in a report also released Thursday.

Malin said renters are getting fed up with paying a lot for little space, especially in the Village. Phoebe Kreutz, 38, a writer who’s lived in the East Village her entire life, agreed, especially with some people paying up to $4,000 for a studio in the neighborhood.

The result, she said, is a destruction of the community’s character, which she fears will spread.

“At some point you’ll blow up the market. It’s a whole different world,” she said. “We are going to run out of city to gentrify.”

Rosemary Wakeman, the director of Fordham University’s urban studies program, said the vacancies can pose a problem for Manhattan communities due to a loss in tax revenue and, more importantly, a loss in economic activity for the remaining mom-and-pops.

“People have to take a train for a cheap laundry service sometimes,” she said.

In response, renters are flocking to cheaper and more spacious options in Queens and Brooklyn, according to Malin.

Richard Allen, 51, an East Village resident for 30 years, observed that New Yorkers are increasingly looking further afield in the search for reasonably priced space. “Ridgewood has become trendy — that’s how far people are moving out,” he said.Wakeman predicted that the “pendulum will swing back” when it came to vacancies but said new developments, and the tremendous rents that come with them, would probably keep middle- and lower-class renters away from Manhattan.

“I don’t know if we’ve reached the peak yet,” she said.