Landlords in New York City are taking unprecedented steps to get leases signed.
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New York City landlords have never been this aggressive about filling up vacant apartments
Landlords are offering record concessions to prospective tenants.
A sign advertising an apartment for rent along a row of brownstone townhouses in the Fort Greene neighborhood on June 24 in Brooklyn, New York.
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In January, concessions like a month of free rent and brand-new appliances rose to a record high in both Manhattan and Brooklyn, according to the real-estate appraiser Douglas Elliman. Concessions hit new highs for a fourth straight month, and the share of new leases with such giveaways was above 30% for the first time.
Concessions climbed to a record 18.1% of all leases in Brooklyn, more than triple the amount of a year ago.
"It's one thing to give concessions because it's a new building and amenities aren't working yet or the building's not fully completed," Andrew Barrocas, the CEO of the brokerage MNS, recently told Business Insider.
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"And then there's concessions because you can't rent at that price."
It appears to be the latter case in New York, as landlords adjust prices to be more in line with what prospective tenants are willing to pay. The heaviest concessions were in the market for two-bedroom apartments, according to Douglas Elliman's monthly report.
The median net effective rent in Manhattan — which factors in concessions — slipped year-over-year by 0.1% to $3,369, while the number of new leases signed dropped by 5% to about 3,200. Both the number of days on the market and the listing inventory were higher, suggesting that landlords had a harder time filling up vacant apartments.
"Overall there's definitely signs of the rental market weakening," Barrocas said. The market slowed down, he added, amid disagreement over New York state's 421-a tax exemption for developers that would normally encourage the construction of affordable housing.
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