Absolutely. The NYC real estate market is an absolute nightmare in so many ways. Right now it seems most akin to the DeBeers control over the diamond market (ie: an industry based on false scarcity).
No, I think apartments really are scarce. It's not like landlords are sitting on vast quantities of inventory to drive up rents.
That said, rent regulation (mostly rent stabilization vs. rent control, these days) does skew the market, creating a small number of lottery winners lucky to have below-market rents and driving up rents for everyone else competing for the unregulated inventory, regardless of their economic status.
Sorta true, sorta false. There are not vast quantities of inventory, but there certainly isn't a shortage. There are loads of "luxury rentals" in battery park city, downtown brooklyn and williamsburg that the developers are having a hard time getting people into, even with all sorts of incentives.
The prices are pulled out of thin air. The new developments have to charge usurious rents to recoup their costs, but a lot of individual owners bought their building outright in the 80s for peanuts and just charge whatever they think they can get. Any old building in the LES or east village is basically a mint for the owner.
There may be a shortage of affordable, nice apartments in places where people want to live. Good luck finding a nice place for < $2000 in the LES. However, there is no shortage of expensive, crappy apartments in "uncool" parts of the city. In a weird twist of reality it's now easier to find a good deal in the UES than it is in the LES...
Good luck finding a nice place for < $2000 in the LES.
Fun fact: if an apartment is rented for less than $2000, it becomes subject to rent stabilization.
Many landlords would rather have an apartment go vacant than become subject to rent stabilization. Better to lose a year's worth of rent now than 20 years worth of rent in the future, not to mention loss of flexibility (i.e., you can't sell the apt without permission of the tenant).
This isn't actually true. If an apartment rents for more than $2000 it is no longer subject to rent stabilization, and there are various tricks that landlords use to make sure it doesn't fall back under such as issuing rebates or free months and then quoting an effective monthly rate.
That's actually exactly what's happening in the management companies. If you go an ask for an apartment from a broker in a price range in a neighborhood range you will automatically be told "That's a nice idea, but what youre asking for doesn't exist. Try this one for the same price in a different neighborhood, or try the same neighborhood for $300 more than you would pay."
If you are trying to move to a similar apartment that you are in, in the same neighborhood, for the same price, you will be told your apartment does not exist.
If you go to a management company trying to get into a big complex like StuyTown or any of the luxury rentals you will be quoted a price that is pulled out of thin air, and you will be lied to that "this is the last apartment available in XYZ highrise."
In short, managers are absolutely sitting on the best deals because they ALWAYS try to move the riskier product first. As the market gets worse, there is more risky property available, and thus it is even HARDER to find a good deal in a bad economy through brokers (the current gatekeepers of the market).
If there's one rule of new york city real estate, it's that this is always the last apartment in the building, and I always have someone else coming by to sign for it in an hour, but if you sign right now..
Only sort of. Rent control's been phased out quite a bit over the decades and since the financial collapse, market rents are below the rent control caps all over the city. I'm currently in a rent-controlled apt, not paying full rent because the rent-controlled maximum drifted above what the market would bear.
