NYC Apartment Hunting: Beyond the Illusion of Scarcity

Every morning my Douglas Elliman Real Estate lliman inbox is inundated with #brokerblasts daily email lists of vacant apartments available for rent. When I moved to #NewYorkCity in April 2023, I struggled for weeks to find an apartment, so it came as a surprise to me once I became a licensed #realestateagent that there are thousands of vacant apartments needing tenants in the city at any given time. I believe that the industry goes to a lot of trouble to give the illusion of scarcity of housing to keep rents high. And the system is just inefficient? leading to a surplus of available spaces remaining largely unnoticed due to a skewed perception of scarcity. Now as an agent, I see so many lovely apartments in great locations where management struggle to get them rented.

?

Exclusive Listings vs Open Listings

The go-to hub for apartments in NYC is StreetEasy so when you move to the city, you are advised to start looking there. However, the listings on #StreetEasy are posted by agents with #ExclusiveListings only and since the agents pay for listing on the platform, so they must be motivated to pay. The busiest season for rentals is from around April to August after that hardly anyone is looking for apartments, so it is a waste of money to pay for ads. The rental market is seasonal in that by the time the new academic year has started and new diplomats have started their United Nations tour, by September nobody is running around looking for an apartment. Another issue that a landlord pointed out to me is that Street Easy only allows one exclusive agent per building so nobody else can advertise vacant apartments on the same building. When I moved into my building, the property management company had just ended their exclusive marketing agreement with a top brokerage in the city then hired agents to work in-house after the exclusive broker had created an additional layer of bureaucracy as the agents sought to protect their fees by limiting communication between applicants and management. In-house agents can make quicker tenant approval decisions. My application took less than a week.

?

About 70% of housing in #NYC is rental #accommodation and most of these apartment buildings are owned by large management companies like Centennial Properties NY that own buildings all over the city. When you get a landlord with about half a billion dollars’ worth of rental apartments, it is not worth it for them to pay advertise each unit or give any agents exclusive rights to market so they give any agent in the city the opportunity to rent out their apartments through #OpenListings. Centennial Properties even hires agents to work from their offices at 740 Broadway on a commission-only basis because they have so many vacant apartments that need to be filled every day. Although Street Easy is the giant in exclusive listings, most of the apartment stock in NYC is marketed through these types of open listings. Apartment rentals through open listings are the bread and butter of new agents in the city because it is quick money. You can always tell if the market is slow like now because the big landlords are willing to pay agents a fee to bring in a tenant and even give concessions, like a free month’s rent. Right now, I am even seeing instances of 2 months free rent, besides the agent fee, because things are slow in December. Depending on who pays agent fees and how quickly they pay, agents can choose to market apartments from landlords like Solil.com, Stonehenge, Golden Realty, etc. Then there are property management companies that manage properties for landlords who outsource the management like C+C Apartment Management which manages my building. Nobody knows how many property management companies there are in the city, I have a spreadsheet full of them and some specialize in certain boroughs. When you first come to New York City, you don’t even know where to begin looking so it is easy to turn to Street Easy, but you must pay a 15% annual rent agent fee for most apartments listed on Street Easy. Open listings are usually #NoFeeApartments because the landlords are willing to pay the agents' fees.

Most apartments in New York City are not advertised because websites like Street Easy do not accept open listings. The only website where you can advertise open listings is RentHop . For an agent to pay to advertise an open listing, they must be confident it is priced to sell. The sweet-spot for open listings is around $3,500 where you will get a lot of leads. Even if they don’t take that specific apartment, there are plenty of other options to show them. The problem with advertising an open listing is that you can’t put the full address on the post otherwise anyone can take their client there and take it. However, when I post apartments from Centennial on Rent Hop, I find several other ads for the same apartments. Some agents don’t even visit the apartment to take pictures, but they just steal other agents’ pictures. Some agents are doing well finding leads on TikTok but you need a minimum of 2,500 followers to qualify for #CreatorMode where you can add a contact lead. My #TikTok account is new so I only have 534 followers so please follow me @debbiepetersnyc www.tiktok.com/@debbiepetersnyc so I can get creator status.

When I see the daily broker blasts, ?we receive from property management companies, it is evident that there is an excess of apartment rental stock and this is caused by a lack of information on availability for renters, as well as price. According to Apartments.com, as of December 2023, the average rent in New York, NY is?$3,649 per month. When you rent an apartment in New York, you can expect to pay about $3,045 per month for a studio, $3,649 for a one-bedroom apartment, and around $5,026 for a two-bedroom apartment. There is a housing shortage because rents are too high for most people. The city tries to help by offering #CityFHEPS?rental assistance supplement vouchers but a voucher for a one-bedroom apartment is $2,387 for everything including utilities while an average one-bedroom rents for $3,649 so there is a shortfall in what the city pays in rent. In September 2023, Mayor Office of Mayor-Elect Eric Adams allowed for CityFHEPS vouchers to be used for housing anywhere in New York State, but most voucher holders are unaware of this change. A couple of weeks ago I attended Michael Pinter, https://www.dhirubhai.net/in/michael-pinter-5b3a063/’s monthly #NassauCounty #RealEstateInvestors’ Association monthly meeting in Lynbrook. It was full of small mom and pop landlords who were excited at the opportunity to get voucher tenants from NYC, but they don’t know how to find them. I have a lot of voucher clients who are still struggling to find accommodation, so I let them know that there are apartments in #LongIsland. To be fair, it is not easy to move so far out when you have children in city schools and other challenges. My one client, who has a special-needs child, has been in a shelter for months. He found an apartment on his own, but it tested for lead and was rejected, so he is still looking. His son just had brain surgery and the whole situation just broke my heart.

I am starting on my real estate virtual wholesaling journey so I am speaking to a lot of agents from out of state so that they can help me find distressed properties, I recently connected with a great agent in New Jersey who also invests in real estate and somehow the issue of #Section8 vouchers came up. She could not believe that Section 8 tenants struggle to find accommodation in New York City because landlords in the rest of the country love the guaranteed income from government payments. She has some apartments coming on market soon and since Section 8 voucher holders can go anywhere in the US, I circled back to some of the Section 8 voucher holders who contacted me in the past to offer them Jersey as an option. Most New Yorkers don’t want to leave the city. One lady, who I stopped trying to help a few months ago because she refused to view a three-bedroom apartment ‘unless it had 2 bathrooms’ told me off that agents like me were not trying to help her. The truth is I try hard, but nobody has a solution for vouchers which are below the cost of rent and then Section 8 tenants have a reputation for being ungrateful. Section 8 pays a lot more rent for its voucher holders and it depends on zip code so landlords in NYC can get market rent. One of my landlords who is going through it with an unruly Section 8 tenant in one of his apartments, has 4 units coming up for rent in the next month. On the one hand, he likes the reliability of the government payments, but he is dreading the drama of getting other difficult tenants. As an agent I can screen tenants as best as I can, and I really want to get housing for voucher holders so I hope that the difficult tenants will not ruin it for others. New York landlords have had bad experiences as well with diplomats using their immunity status so many property managers say no to diplomats, but I have successfully placed diplomats and foreign students by having them buy third-party rent insurance for the length of their lease through Insurent Agency Corporation

My final advice to anyone moving to and even just moving apartments in New York City is to get an apartment rental agent. The number of apartments listed for rent is just the tip of the iceberg. There are many tired landlords that just don’t bother to advertise apartments or even hire a property management company. I know one guy who owns a lot of commercial and apartment buildings who answers the phone himself so relationships with guys like him matter. There are lots of big landlords down on #DelancyStreet who are one-man operations with an assistant or maybe a small family outfit. Some buildings are well-maintained but some are not, some even belonging to the same owners or management companies. Agents go to apartments to ‘preview’ and take pictures. I went to a building the other day where a tenant complained that the heating wasn’t working or the hold water. This is the type of information you need to know, especially if you are moving in winter. An experienced agent helps you locate hidden gems and reliable landlords. The bigger the property management company or the landlord portfolio, the more likely there is room for error, unless you are in a luxury building. Hopefully, the more rent you pay, the better the facilities but that is not always the case. The janitor in my building makes sure that the lobby is spotless every day but neglects to clean the corridors on the other floors so issues can happen anywhere.

If you are looking for an apartment or a relocation expert in New York City, please email [email protected].