Manhattan tenants are pushing back against landlords’ raising rent

New leases surged 24% in March
By Meenal Vamburkar | April 11, 2019 07:00AM

(Credit: IStock)

The median net effective rent rose 3.8 percent year-over-year to $3,288. (Credit: iStock)

As landlords get more aggressive with pricing, more Manhattan tenants aren’t sticking around.

In March, the borough saw a 21 percent jump in new leases, according to Douglas Elliman’s latest rental market report. That indicates that more tenants are choosing to opt for new leases rather than renew existing ones, as landlords push for higher rents, said Jonathan Miller, CEO of appraisal firm Miller Samuel and author of the report.

“It’s not a big rush to new development rentals, but more about the change in outlook of landlords,” he said. “The pushback is coming in the form of tenants signing new leases elsewhere.”

The median net effective rent rose 3.8 percent year-over-year to $3,288. That marked the third consecutive increase. At the same time, the share of new leases with concessions held steady at 41.8 percent versus 41.7 percent a year earlier.

“We’re looking at a long grind of declining reliance on concessions, just like we had long grind of increasing reliance on concessions previously,” Miller said.

Still, the signs point to a slowly strengthening market. Manhattan’s vacancy rate also fell to 1.86 percent from 2.05 percent — as inventory shrank 10 percent.

The luxury market continued to benefit from the slide in high-end sales. New leases surged 24 percent, with the median rental price dipping 2.2 percent to $8,250. The entry threshold was unchanged at $6,500.