Prices Leave Tenants Flat
A high rise seen in rental costs
By PETER GRANT and ANNE E. KORNBLUT
Daily News Staff Writers
From the toniest brownstone neighborhoods of Brooklyn to once rubble-strewn South Bronx, New Yorkers are experiencing dramatic, double-digit rent increases, an exclusive Daily News survey has found.
In neighborhoods citywide, people are paying more than ever for their apartments and are struggling to find an affordable place to live.
Although a U.S. Census survey shows that rents have risen 18% over the last three years, in some areas it has leaped by nearly double that figure, according to The News' survey.
In some sections of Brooklyn, apartment rental prices have jumped 30% over the last five years. The most desirable parts of Queens have seen rents soar 16%. In the Bronx, rents in some prime areas are up 16%.
To examine the rental picture at a time when the state Legislature is threatening to overhaul rent control, a Daily News team focused on at least six neighborhoods in each borough. The News contacted more than 30 brokers to determine rent increases from 1992 to 1997.
The results show steep hikes in parts of Brooklyn, Queens and the Bronx as more people than ever are looking for apartments.
The hikes are being spurred by an array of forces. Rents have spiked up 20% in Manhattan over the last three years and have priced many people out of the borough. Immigrants are streaming into the city looking for homes. Young professionals are moving here in droves as they land new jobs thanks to the improving city economy.
"We've been overrun with customers," said Susie Kline, a broker in the Williamsburg section of Brooklyn.
"There's only a 2% vacancy rate in Manhattan, so you could pick anywhere not too far from Manhattan and see the same sort of trend."
Lisa Ferber, a copy editor at Seventeen magazine, is one of the countless people fed up with Manhattan and looking for a new place in Brooklyn.
Ferber can't afford to pay more than $650 a month. In Manhattan, that meant sharing a tiny Greenwich Village apartment with an almost claustrophobic bedroom.
"It was like I was living in the baby's room," she said. "It was embarrassing to say this was all I had made of myself."
But now as she embarks on finding a new place, she knows it may be tough going because prices and demand are high.
Certain pockets of the city, like Park Slope in Brooklyn, have always drawn hordes of Manhattan renters in search of more space at lower prices. Other areas have not seen any increase in demand or rent hike.
But The News' survey found that rent increases are extending to neighborhoods beyond Manhattan.
Bay Ridge, for example, a traditionally working-class zone for families, has seen rents rise between 16% and 22% as immigrants have been pushed out of Manhattan.
Two neighborhoods near Brooklyn Heights — Cobble Hill and Carroll Gardens — have seen the average price of a one-bedroom leap 29% since 1992, from $775 to $1,000 a month. Fort Greene has seen a 21.1% rise in the cost of a two-bedroom, while Windsor Terrace's rents have risen as much as 30%.
In general, the median rent of all apartments in the city rose 18.4% from 1992 to 1995, according to the New York City Housing and Vacancy Survey released by the U.S. Census. Experts say that the rate of increase has accelerated since then. This was a 9.8% increase after adjusting for inflation.
"In the past two years, it's really shot up," said Steven Sharabi, a broker at Jonathan Shaye Realty in Windsor Terrace. "I'd say demand has grown about 70%."
The rebuilding of the South Bronx, for example, has sparked sharp rent increases in many neighborhoods even as it turned the area from a symbol of urban decay into a sign of hope.
"Up here the norm is now a one-bedroom apartment for $650," said one broker who asked to remain anonymous. "The days of the South Bronx being cheap are over."
The rise in rents has profound political implications in a city that has three renters for every person who owns a house or apartment.
The increase in rents comes at a time when State Senate Majority Leader Joseph Bruno (R-Rensselaer) wants to eliminate rent control for all but the elderly and disabled.
Since World War II, there have been two rental markets — one regulated by the state and city and the other subject to market forces.
The units most affected by the recent rent increases have been the 600,000 unregulated apartments, The News' survey found. These are mostly in buildings with five or fewer units, or are co-ops or condos rented out individually by their owners.
But demand in many areas has also put pressure on the city's 1.1 million rent-regulated apartments.
The city Rent Guidelines Board has been allowing these rents to rise between 2% and 7% a year for most of the 1990s.
But landlords also are able to add another 9% to the rents when units turn over — even more by making major improvements to the apartments.
This pattern — and the sharp increase in rents of unregulated units — has given Bruno's opponents a powerful argument.
"The continued rise in rents makes the case for continuing regulations much stronger," said Jay Small, executive director of the Association for Neighborhood and Housing Development.
But no matter what happens in the Legislature, New Yorkers are pushing ahead into many middle-class enclaves with abandon.
Grocery store owner Jimmy Dawood, who moved to Bay Ridge five years ago with his wife and children, said he now pays $780 for a two-bedroom apartment. He said he sees plenty of newcomers moving to the area.
In Rego Park, Queens, where apartments were once readily available, there are now waiting lists of up to eight months as young professionals move in.
"As soon as an apartment is available, it goes fast — and I'm talking fast," said George Alexiou, owner of Century 21 Alexiou in Astoria, Queens.
Rent Control: Applies to apartments in buildings with two or more units built before Feb. 1, 1947 and continuously occupied since June 30, 1971. Landlords can get up to a 7.5% increase annually until a maximum base rent is reached. There are about 70,000 city rent-controlled apartments.
Rent Stabilization: Took effect in 1969. It covers buildings built from 1947 to 1974 as well as any rent-controlled apartments that become vacant in buildings with more than six units. Each year, the Rent Guidelines Board determines rent increases for these apartments. Last year, it recommended a 5% increase for one-year leases and a 7% increases for two-year leases. The city has about 980,000 rent-stabilized apartments.
Unregulated: About 600,000 apartments are subject to market forces. These are mostly in buildings with five or fewer units, or are co-ops or condos rented out by their owners.
Sen. Joseph Bruno's Plan: On June 16, 1997, state rent regulations with cease to exist for the nearly 1 million rent-controlled and stabilized units. To protect the elderly, the state would expand a program that provides rent protection to those over 65 who earn less than $20,000 annually. As former rent-regulated apartments become vacant from June 1997 to June 1999, landlords would be allowed to charge market rents. In June 1999, all apartments except those rented by low-income seniors would go to market rents when the lease expires. State Democrats plan to fight this plan. Bruno would also expand luxury decontrol of more higher-priced apartments.
Original Story Date: 03/09/97
Original Story Section: City Central