Scorecard: A rise in vacancy rates also allows for a “vacancy bonus”

A monthly roundup of news and reports on the residential market

TRD New York /
Jun.June 24, 2016 04:20 PM
 

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.

 
 

Related Articles

arrow_forward_ios
Marcus & Millichap CEO Hessam Nadji

Marcus & Millichap CEO predicts “exodus” from cities to last two years

Marcus & Millichap CEO predicts “exodus” from cities to last two years
A photo illustration of Quora CEO Adam D'Angelo from a scene in the film The Matrix (Warner Bros./Village Roadshow Pictures; Quora)

“Our HQ will be in the cloud”: What if remote-first work is an opportunity, not a compromise?

“Our HQ will be in the cloud”: What if remote-first work is an opportunity, not a compromise?
HelloOffice CEO Justin Bedecarre

HelloOffice raises $20M in Series A funding

HelloOffice raises $20M in Series A funding
1300 Flushing Avenue (Google Maps)

Bushwick office building trades for $44M, sign of life for i-sales market

Bushwick office building trades for $44M, sign of life for i-sales market
As resi brokers in South Florida report an uptick in sales and rentals largely fueled by homeowners fleeing dense markets like New York, office brokers say they’re starting to see a similar trend play out among tech firms. (iStock)

More tech firms eye Miami as Covid carries on

More tech firms eye Miami as Covid carries on
Wall Street firms and their landlords are making plans to welcome a trickle of employees back into their buildings as New York slowly reopens. (Getty)

“Very gradual return”: Wall Street tenants, landlords lay out reopening plans

“Very gradual return”: Wall Street tenants, landlords lay out reopening plans
270 Park Avenue (Google Maps; iStock)

City planning through a pandemic

City planning through a pandemic
“We’re not in the business of land-grabbing:” Hana CEO on the future of flex space

“We’re not in the business of land-grabbing:” Hana CEO on the future of flex space

“We’re not in the business of land-grabbing:” Hana CEO on the future of flex space
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...