Business

New Yorkers spend an average of $10,454 upfront to rent a unit

Property

Published February 13, 2024, 2:05 p.m. ET

According to a StreetEasy study, high upfront costs have created a “lock-in effect” that leaves New Yorkers unable to afford to move to a new location. Getty Images

Moving is always a huge pain — but new data shows it’s also more expensive for New Yorkers than many can bear.

Additionally, the average cost of securing a new rental apartment in New York City has become so exorbitant that many renters are effectively forced to remain in these apartments, a recent report from StreetEasy found.

According to the listing portal’s findings, the average New York renter currently has to pay a whopping $10,454 in upfront costs before they can move in – the highest upfront costs the service has recorded since it began tracking in 2010.

That’s a 7.1% increase over the average upfront cost of $9,763 in 2022 – and a 28.7% increase over the pre-pandemic average of $8,125 in 2019. These numbers went up in 2022 Back in 2020, when a number of New Yorkers left the city, creating an oversupply of rental units, leading to cheaper prices. But starting in 2021, landlords increased prices largely exponentially, and those upfront costs have been vertical ever since.

The rise in these costs – which typically include the first month’s rent, deposit and an agent fee – has led to a “lock-in effect” where tenants cannot afford to move out.

Since the pandemic, the cost of moving into a new apartment has increased dramatically. Getty Images/iStockphoto Brokerage fees generally make up the majority of upfront costs. Getty Images/iStockphoto

The company found that brokerage fees account for the majority of upfront costs, and city dwellers who pay a fee as a condition of their lease are, on average, likely to spend nearly twice as much (42.9%) in upfront costs as those who do do not do .

According to StreetEasy, this is particularly brutal for low-income New Yorkers. Those earning the median household income in the Bronx can afford less than 1% of rent outside the borough, StreetEasy reported. Overall, these average costs are still more than five times higher than the average U.S. renter’s $2,000 cash balance in checking, savings or money market accounts.

Locally, renters in the Bronx, who earn a median income of $45,517, must spend 15.4% of their annual income on these upfront costs, the highest burden in the city. In Manhattan, whose median income of nearly $96,000 is the highest within the city limits, renters must pay nearly 13% of annual income to sign a new lease.

The report concludes that the situation “does not benefit the rental market as a whole” and that more measures need to be taken to make the market more transparent and manage tenants’ “financial obligations to landlords.”

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Source: nypost.com

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Robert Wilson

Business & economics analyst. Breaking down intricate financial trends for informed decision-making.

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