From the June issue: In a potentially troubling new reality for landlords, the vacancy rate at Manhattan rental apartments has been trending up. According to data from market analyst Jonathan Miller, April’s 2.3 percent rate was the highest for that month since he began tracking the metric in 2007. But some say the increase won’t necessarily trigger cheaper rent.
That’s largely because landlords often prefer to throw in financial sweeteners — like a free month of rent — before lowering asking rents, even if it means collecting slightly less from a tenant for the year.“I would predict that concessions will linger a lot longer rather than rents actually going down,” said Julia Miller, leasing and sales manager at Town Residential.
But when it comes to vacancies, one landlord’s disappointment is another’s boon. A recent housing report from the nonprofit advocacy group Community Service Center showed that when adjusted for inflation nearly half of rent increases on stabilized apartments come from the “vacancy bonus,” an up-to-20-percent increase on rent-regulated apartments that a landlord can legally add whenever an apartment becomes vacant.
“They wouldn’t be landlords if they weren’t trying to maximize returns,” said Oxford Property Group agent Desmond Eaddy. The vacancy bonus has come under political fire lately, but a proposal to eliminate it has languished in Albany.