Plenty of Apartments…If You’ve Got Plenty of Money: Key Points from Selected Initial Findings of the 2021 New York City Housing and Vacancy Survey (HVS)
Oksana MironovaSamuel Stein
This brief analyzes the patterns of rents and vacancies reported in the Initial Findings of the 2021 HVS. In Part 2 of our analysis, we summarize what the HVS reports about housing conditions and tenant hardships.
Once every three years, the New York City Department of Housing Preservation and Development (HPD) sponsors the preparation of the New York City Housing and Vacancy Survey (HVS). The survey is a byproduct of the city’s rent regulation system and its primary purpose is to determine the city’s vacancy rate. The continuation of rent stabilization in NYC is contingent on a continuing “housing emergency,” quantified by a vacancy rate of lower than 5 percent.
The 2021 HVS–fielded in the midst of a pandemic, February 2021 to July 2021–showed a relatively high 4.54% vacancy rate, driven largely by wealthy Manhattanites temporarily fleeing the city and the over-production of high rent units.
In addition to determining vacancy rates, HVS provides invaluable data about rents, incomes, as well as housing stock composition and conditions. While the 2021 microdata won’t be available until later this summer, initial HVS findings show that:
- Asking rents increased by 34 percent above inflation between 2017 and 2021.
- The income necessary to afford the median asking rent in NYC has gone up by 74 percent, accounting for inflation, since 2014, from $63,082 (in 2021 dollars) to $110,000. Wages increased by only 16 percent over the same time period.
- Vacancy rates in low-rent apartments were 0.9 percent; they were 12.6 percent in high-rent apartments.
- Rent regulation is effective at preventing rent gouging and displacement: The 2019 Housing Stability and Tenant Protection Act (HSTPA) saved 15,670 apartments from deregulation.
- For 37,040 apartments where new tenants moved in since 2019, HSTPA kept rents around the city’s median of $1,500 -- $300 lower than they would have been without the 2019 rent law reforms.
This is the first of two briefs summarizing the 2021 HVS initial findings. Our next brief will focus on issues of housing conditions and tenant hardships.
The rent is too damn high
Asking rents in New York City, or rents in apartments that were on the market when the HVS was fielded, increased by 34 percent, accounting for inflation, between 2017 and 2021.
With each HVS fielded in the past decade, the asking rent rate climbed at a rising rate, from 2 percent (2011 – 2014), to 30 percent (2014 – 2017) to 34 percent (2017 -2021), meaning that NYC’s rental unaffordability is getting worse fast.
You must earn at least $110,000 to afford to move into most apartments in NYC
After decades of wages stagnation and real estate development focused on high-rent units, the rental market has dramatically shifted to serve wealthier and wealthier New Yorkers over the past ten years.
The income necessary to afford the median asking rent in NYC has gone up by 74 percent since 2014, from $63,082 (in 2021 dollars) to $110,000. Wages increase by only 16 percent over the same time period.
This means that a median priced apartment in New York City is increasingly out of reach for not only low-income New Yorkers, but for middle-income earners too.
Vacancies in high rent apartments skyrocket in 2021, as low rent apartments disappear
In 2021, more than one in ten high-rent apartments was on the market, while low and very low apartment vacancies plummeted below one percent. While the high-rent vacancy rate was inflated by the temporary exodus of wealthy renters during the height of the pandemic, it reflects a longer trend: The market is over-producing high-rent units unaffordable to the vast majority of New Yorkers, while under-producing the low-rent housing most New Yorkers need.
There are almost no apartments (0.9 percent vacancy) on the open market at the current median rent of $1,500, but plenty of high-rent apartments renting for over $2,300 (12.6 percent vacancy). This not only means that low-, moderate-, and middle-income households will have trouble finding an apartment. It also means that household living in less-than-ideal situations–including with unsafe building conditions or in overcrowded apartments–are unable move.
Geographically, vacancies were concentrated in Manhattan, which had a 10 percent vacancy rate, 5.5 points above the city-wide rate (4.5 percent), and 9.2 points higher than rate in The Bronx (.8 percent).
Strengthened rent laws prevent rents from going even higher
In 2019, New York State passed the Housing Stability and Tenant Protection Act (HSTPA), the most important, far-reaching, and comprehensive protections for tenants in about a half-century. The law closed loopholes, introduced by real estate-friendly legislatures in the 1990s, which allowed landlords to use apartment and building improvements, as well as tenant turnover, as pretenses for steep rent hikes and deregulation.
2011 reforms that raised the high vacancy threshold and made small changes to Major Capital Improvement rent increases began to slow the rate of deregulation in the city, and the 2019 HSTPA finished the job. Between 2020 and 2021, HSTPA saved 15,670 apartments from deregulation, reversing a trend started with pro-landlord reforms that weakened the State’s rent regulation system over the past few decades.
Further, the 2019 law kept rents in 37,040 apartments that turned over at the median rent of $1,500. That is $300 lower than it would have been without HSTPA.
Historical overview of New York City’s Rental Crisis
Since 2011, most of the city’s private market tenants have been rent burdened, paying more than 30 percent of their income in rent. In 2021, nearly one million households (53 percent) were rent burdened, while 600,000 households (32 percent) were severely rent burdened or paying more than 50 percent of their income in rent.
The rental crisis impacts poor renters the most, and Black and Latino/a/x tenants are more likely to be rent burdened than white or Asian tenants. Severe rent burdens were a near universal experience for poor households in the private rental market without a subsidy: 85% of households earning less than $25,000 were severely rent burdened. Black and Latino/a/x households (36 percent) were more likely to be severely rent burdened than white or Asian households (28 and 29 percent). Overall, Latino/a/x households had the highest share of rent burdens, with 59 percent paying more than 30 percent in rent.
New Yorkers’ high rent burdens today are a result of real estate investment and housing policy decision over the past 50 years. The U.S. had a price and rent control system in place during WWII, which many states immediately phased out in the late 1940s. In New York State, a coalition of tenant, consumer, and labor groups pressed the state to continue controlling rents. However, by the late 1960s, the state government had implemented decontrol measures leading to the decline of rent regulation across the state. The impact was severe: vacancies dropped to 1.2 percent and median rents increased by 27 percent.
The city responded with the Rent Stabilization Law of 1969, which was quickly undercut by a series of state laws in 1971 that limited municipal control over rent regulation and allowed landlords to deregulate units upon vacancy. The state’s laws led to both increased landlord harassment and a spike in rents, as landlords tried to push out tenants to deregulate units. The historical overview of rent-to-income ratios below shows a sharp jump in the median rent burden in the 1970s. (See chart below.)
The rent burden ratio hovered around 30 percent through the 1980s and 1990s, but began climbing again in the 2000s, when speculative investors begun to purchase 100,000 units (about 10 percent) of the city’s rent stabilized housing stock. As rent regulated landlords grew more sophisticatcinred, investors weaponized the rent law loopholes, developing complex revenue generating strategies predicated on systematic rent increases above the annual rent guidelines, driving the rent burden up even further.
Too much of the housing stock’s gains are in units unavailable for rent
The city’s housing supply grew by approximately 175,000 units between 2017 and 2021, a rate HVS Initial Findings author Elizabeth Gaumer characterizes as “slow but steady.” There was, however, a “substantial” growth in buildings with more than 100 units (9% growth, or 65,000 units), as well as a big increase in buildings with 6-19 units (11% growth, or 42,700 units).
But even as the city added a substantial amount of new housing, it continued to struggle with the problem of intentional emptiness. The number of units that were both vacant and unavailable for sale or rent went up by 43 percent, from 248,000 to 353,400. This significant increase was likely driven by four intersecting market dynamics:
- the overproduction of high rent units only accessible to wealthy households;
- the exodus of wealthy renters from New York City during the start of the pandemic, including some who may have switched their primary residence from their city apartment to their “country home;”
- the ongoing practice of turning full apartments into permanent short-term rentals; and
- owners of rent stabilized housing withholding apartments from the market in the hopes of forcing legislators to weaken the 2019 rent laws.
The largest grouping of intentionally empty apartments were units held off the market for occasional, seasonal, or recreational use. The number of such apartments in the city have gone up by 37 percent to 102,900 since 2017, and have nearly doubled since 2014.
135,700 of units off the market in 2021 were either coops or condos. The number of vacant and off-market coops and condos more than doubled since 2017, when there were roughly 63,000 units. Co-ops and condos also represent a larger share of the total vacant, off-market units, from 26 percent in 2017 to 38 percent in 2021. These figures are likely a result of both long-term overproduction of luxury condos/co-ops as investment vehicles and the short-term impact of the pandemic on the high-end rental market.
More HVS Analysis
In this brief, we have analyzed the patterns of rents and vacancies reported in the Initial Findings of the 2021 HVS. In Part 2 of our analysis, we summarize what the HVS reports about housing conditions and tenant hardships.
