In addition, a tax break for New York City developers that has been used in creating hundreds of thousands of new residences in recent decades, including many below-market rentals, will expire on Wednesday. Elected officials in the State Legislature chose not to renew the tax break, known as 421a, despite warnings from the real estate industry that new multifamily housing construction might end without it.
In Manhattan, the average rent on an apartment newly leased in May was $4,975 a month, a head-spinning 22 percent increase from the year before and $550 per month more than the average rental price before the pandemic, according to a new report by the real estate firm Douglas Elliman. In Brooklyn in May, apartment rents reached an average of $3,744 per month, the group said, a 12 percent jump from the beginning of 2020.
While apartment rents decreased for a while during the first year of the pandemic, the rates have accelerated over the past year, continuing a trend that predated the coronavirus. Yet, the number of apartments available to rent in Manhattan is under 2 percent, according to Douglas Elliman, underscoring the intense demand for housing in the city and an insufficient number of new apartment units being built.
“We also have to keep producing housing,” said Jessica Katz, the city’s chief housing officer. “The housing crisis is as much a supply issue as an affordability issue.”
The housing shortage in New York City began many decades ago, when the growth of the city’s population started to outpace new residential construction. That trend has continued over the past decade: The city added about 629,000 new residents but only about 185,000 new multifamily units.
New York City has long been a city of renters, but an increasing number of tenants are struggling to survive. Roughly one-third of renters are “severely rent-burdened,” meaning they spend more than 50 percent of their income on rent, according to a survey released last month.
This story originally Appeared on Nytimes.com