It took a once-in-a-century pandemic to slow decades of residential rent increases in the metropolitan area, according to new federal data.
Rents for apartments, houses and other primary residences in the 25-county region that includes Long Island rose 0.9% in January compared with a year earlier, the federal Bureau of Labor Statistics reported on Wednesday. That’s the smallest year-over-year increase since 1958.
The rent slowdown was likely caused by the Manhattan rental market, which has been upended by pandemic-related job losses and residents moving to Long Island and other suburbs, experts said, adding suburban rents have increased..
"The rental market in New York City has been hit dramatically in the COVID era," said Jonathan Miller, president and CEO of the appraisal company Miller Samuel.
"The key reason is that unemployment has disproportionately impacted lower-wage earners and hourly-wage earners who have a higher probability of being renters," he said. "You've got heavy [rent] declines in the city versus a modest uptick in the suburbs."
In the five boroughs, residential landlords have been discounting rents to levels not seen since the 2007-09 recession. The median rental price in Manhattan was down 17.3% to $2,800 per month in December compared with a year earlier — an improvement over November’s record 21.7% decline, according to a report by Miller for the Douglas Elliman real estate agency.
The rent slowdown also reflects the stress on family budgets because of the pandemic, said Martin Kohli, the bureau’s chief regional economist.
"Tenants are not able to pay all of their rent," he said. "These partial payments show up in the data and are one reason for the small increase, year over year."
Regional rent is one component of the bureau’s consumer price index, which also was released on Wednesday.
The index, which includes Long Island, climbed 1.2% last month compared with January 2020. That was the smallest year-over-year increase since April’s 1.1% when the coronavirus was taking hold in New York State.
Kohli said the rent slowdown tempered the price index’s rise. He said the index doesn’t include home sale prices.
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