Fearing Rent Will Keep Dropping, Landlords Have Kept Over Half the Unrented Manhattan Apartments Off the Market
New York City — Back in college, I played basketball. I recall during practice one of my teammates complained to our coach. "Hey," he barked at Coach, "how come you always call fouls on me but not on Rick? That's not fair!"
Coach shook his head. He then fired back, "Son, fair is a place where they judge pigs!"
Over the past few weeks, New Yorkers can be overheard grumbling around the city. "It's not fair all these vacant apartments are unavailable." Ah, fair is a place where they judge pigs, apparently. In fact, there's a word for what these shrewd landlords are doing, it's called "warehousing."
Just as Kenny Rogers once famously sang about "you've got to know when to hold 'em," though landlords don't consider themselves "gamblers" per se, their business practices suggest otherwise. After all, this age-old practice of holding onto unrented apartments until the prices go back up — to their liking — is similar to playing poker.
According to UrbanDigs data, over half of the unrented apartments in Manhattan are off the market. As for why landlords have resorted to warehousing, like most things — the tactic stems from necessity.
Due to the pandemic, a million jobless workers in New York City meant roughly a million fewer people were in search of new housing. The city’s unemployment rate hovered near 20 percent — a figure that flirted with rising to Great Depression levels.
“From our data, we expect rents to stay at decreased levels through 2021," says Nancy Wu, economist for StreetEasy. She then added, "It’s going to take a while for rents to return to where they were.”
Indeed, there's a reason on the first day of class just about every professor of economics scribbles the following lesson on some chalkboard:
The higher the demand, the higher the price. The lower the demand, the lower the price.
Landlords around the city found themselves scrambling. Faced with little to no demand for renting, like a heartbroken lover begging his sweetheart to come back — landlords made incredible concessions.
Pic: screenshot provided by author, from Twitter
From offering a free month of rent to even waiving parking fees, landlords made every effort to entice renters to return. But not even offering incentives could fend off the plunge in rents.
No wonder the co-founder of UrbanDigs, John Walkup, advised New Yorkers on the hunt for affordable yet quality housing "to strike while the iron is hot and that time is right now!"
Ah, but at the moment — it appears landlords around the city are fed up. They've taken to snatching up the unrented apartments, even keeping them off the market.
Are such practices "fair"? Perhaps not. But as my old coach reminded:
Fair is a place where they judge pigs.