August Rent Survey
Vacancy Rates Skyrocket, Rent Collection Remains Low But Steady
(New York, NY) — New York City housing is now facing a double whammy of crises: skyrocketing vacancies and COVID-related income loss. A recent survey of CHIP members found that the residential vacancy rates have at least tripled since February. According to survey responses, the vacancy rate now stands at 10.78%, up from 3.38% in February, for our members.
This jump in vacancies isn’t only at the high end of the market, although it is more pronounced for more expensive units. Our sampling found that the vacancy rate for apartments with rents below $2000 a month has more than doubled, coming in at 7.08% in August, up from 3.06% in February. This indicates that even some of the city’s entry level apartments are not being rented anymore. CHIP members report that they are significantly cutting rents and offering multiple months of free rent, and are still struggling to attract tenants.
“New York City housing is infected with COVID with no vaccine in sight. After more than four months of depressed rent collections, housing providers are now facing a grim long term prospect as people flee the city,” said Jay Martin, Executive Director of the Community Housing Improvement Program (CHIP).
CHIP has also been surveying our members each month to track rent collection. Our members reported that 17.23% of residential tenants have not paid rent so far in August. In July, our survey found that 17.72% of residential tenants did not pay by the middle of the month. While the collection rate is holding steady month to month, operating income is still dramatically down because of the rising vacancy rates.
“Tens of thousands of New Yorkers are still struggling to pay their rent. They are crying out for help and federal lawmakers have been asleep at the switch,” said Martin. “The lack of action on robust relief for renters will likely cost hundreds of small property owners their livelihoods and thousands of renters their homes.”
CHIP also surveys members about commercial property collection. A majority of our members have first floor retail space that subsidizes rent-stabilized apartments above. Our survey found that roughly half (49.48%) of commercial tenants have paid no rent in August. Additionally, many CHIP members report that they have already had to agree to payment plans or other deals with restaurants and retail stores, so total rent collection is most definitely worse than 50 percent.
The survey was conducted between August 13 and August 18. The sample size includes the owners and operators of a little more than 80,000 units of housing, the majority of which are pre-1947 rent stabilized buildings. Roughly 30% of buildings responding were in Manhattan, and roughly 20% were in the Bronx, Queens and Brooklyn respectively.
CHIP represents the owners and operators of more than 400,000 units of rent regulated housing in New York City. In our survey, we asked members for comments on the current state of the industry. Overwhelmingly they expressed dire concern for the growing number of vacancies in the city. Here are a few of those comments:
“For the first time in 40 years, we have a tremendous oversupply in housing as families are fleeing the city.”
“Vacancy rates are killing our business. It’s not even pricing – there is a frightening dearth of demand.”
“In 46 years operating properties, vacancies have never been this bad. It’s more than three times worse than it has ever been. We have reduced rent over 20 percent just to keep renting.”
“Vacancy is up and apartments are much harder to rent – have to reduce rents and give concessions. Tenants not paying rent feel that they do not have to and that they are protected by our elected officials.”
“Rent collections in our Bronx and upper Manhattan buildings are 80% or better, but the small mom and pop commercial tenants need assistance similar to the rent relief program, as we desperately need these businesses to exist for our neighborhoods.”
“About half of the apartments are vacant now with more tenants asking to be let out of their leases. Landlords will have a hard time meeting their tax and mortgage obligations by next month.”
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