Landlords don’t like them and brokers despise them, but a record number of money-strapped apartment hunters are looking to share leases with roommates.
One indicator is the increase of share ads on the free online listings service Craigslist. Jim Buckmaster, CEO and president of Craigslist, said the New York section of the Web site receives about 25,000 new room and share ads each month, up about 10 percent from last year. Approximately half of the listings are for Manhattan apartments. The other half covers apartments in the outer boroughs and the surrounding tri-state area.
Precise figures are hard to come by, but Jeremy Abelson, president and co-founder of rental firm Urban Hostess, said he believes 75 to 80 percent of buildings in the city accept shares.
The anecdotal experiences of Mark Lewis, vice president and managing director of Manhattan Apartments, support the numbers. Lewis told The Real Deal in November that more people were sharing apartments than at any other time in recent history.
“It’s economics. If you have to spend $2,400 for a studio in a doorman building versus $1,800 two years ago, how many people just out of college can afford that?” he said. “So you’ll see three people in an apartment where you used to see one.”
The communal living arrangement can sometimes last five or even 10 years, Lewis said. “It’s a combination of not meeting a husband or wife and not being able to afford an apartment on their own,” Lewis said.
Renters trying to find a place to call their own — with a roommate or two — usually head to parts of Manhattan with buildings that allow shared leases. Neighborhoods that traditionally serve as havens for younger, newer city residents, such as Murray Hill, the far West Side in the 40s and 50s, and the far East Side in the 80s and 90s, are common locations for shares.
Two buildings known for being share-friendly are Rivergate at 401 East 34th Street, and Normandie Court, spanning from 95th to 96th streets and First to Second avenues, where the preponderance of recent college graduates earned it the nickname, “Dormandy Court.”
Despite growing demand, brokers and landlords are hardly fond of share seekers.
“We hate them,” said Paul Brensilber, president of Jordan Cooper & Associates, managers of 40 residential buildings predominantly in Manhattan. “Nothing good can come of them.”
In his 17 or 18 years in the real estate business, Brensilber has found that roommate arrangements all end the same way — with one person left holding the bag.
“People share because they can’t afford it,” Brensilber said. “We try not to rent to people that cannot afford apartments.”
Soozy Katzen, director of relocation services at Fox Residential Group, said she does not like working with renters looking to share leases, and so she seldom does.
“They’re probably the last people I want to work with,” Katzen said, because the parties involved are generally not of the same mind and sometimes they work with different brokers, which muddies the search.
In Manhattan, the current residential vacancy rate of less than 1 percent and minimal new rental development means landlords can afford to be picky. Landlords can weed out share applicants by instituting more stringent criteria.
Stephen Kotler, an executive vice president at Prudential Douglas Elliman, said, “It is becoming more difficult for shares to find apartments in a tight market.”
Steve Hakimzadeh, co-founder and principal of residential brokerage firm HH Realty Group and a property owner, has one building in the East Village with 11 units that is almost all shared units and another on the Upper East Side where one out of six units is a share.
He requires that each person earn 40 times her share of the rent, typical of landlords who generally require shareholders to earn 40 to 50 times their share of the rent. He sees shares as an added source of income because he can charge more per apartment.
Hakimzadeh says more lenient landlords consider the roommates’ earnings together.
And “there are some landlords that will not take shares, period,” Kotler said.
Applicants that do not earn the enormous salary requirements can often meet landlords’ criteria by paying a larger security deposit, prepaying several months’ rent or getting a tri-state area guarantor, who must earn 80 to 100 percent of the monthly rent.
Steven Carter, a relocation specialist and associate broker at Citi Habitats, has a different take on the share market. He has found that the number of shares “has decreased a bit,” from about six years ago when he first started out. Today, shares make up one third of his business; six years ago they made up 100 percent.
Carter attributed the decrease in demand to a different perception about the city — that it is now a safe place to live alone. People would rather take a smaller apartment with a co-signer than live with someone else, he said.
Another characteristic of shares is their tendency to modify apartment layouts. Some landlords do not allow tenants to install walls to divide bedrooms up.
But living alone is still not financially feasible for many renters.
“What people can afford has decreased in the past two years, so people are packing into apartments,” Urban Hostess’ Abelson said.