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Thursday, February 29, 2024

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

Moving is always a major pain — but new data shows that, for New Yorkers, it’s also more pricey than many can bear. 

What’s more, the average cost of securing a new rental apartment in New York City has become so exorbitantly expensive that many tenants are essentially forced to remain in these units, a recent report from StreetEasy has found.

According to the listing portal’s findings, the average New York renter currently needs to pay a whopping $10,454 in upfront costs before being able to move in — the highest upfront cost recorded by the service since it began tracking it in 2010. 

That’s a 7.1% increase from 2022’s $9,763 average upfront cost — and a 28.7% jump from the pre-pandemic average of $8,125 in 2019. These numbers slid during 2020, when a number of New Yorkers left the city and created a glut of rental units, which made for cheaper prices. But beginning in 2021, landlords largely hiked prices exponentially, and ever since these upfront costs have gone on a vertical trajectory.

The rise in these costs — which generally include the first month’s rent, the security deposit and a broker’s fee — have created a “lock-in effect” whereby tenants can’t afford to move out. 

streeteasy upfront costs report
Since the pandemic, the cost of moving into a new apartment has increased dramatically. Getty Images/iStockphoto

streeteasy upfront costs report
Brokers’ fees are generally the most significant portion of upfront costs. Getty Images/iStockphoto

Brokers’ fees, the company found, compose the largest portion of upfront costs, and city slickers who pay one as a condition of their lease likely spend nearly twice, or 42.9%, as much in upfront costs as those who don’t on average. 

This is especially brutal for lower-income New Yorkers, StreetEasy notes. Those earning the median household income in The Bronx can afford less than 1% of rentals beyond the borough, StreetEasy reported. Across the board, this average cost is still more than five times above the average $2,000 cash balance US renters have in checking, savings or money market accounts.

More locally, renters in The Bronx who earn the median income of $45,517 need to spent 15.4% of that annual income on these upfront expenses, marking the highest burden in the city. In Manhattan, whose nearly $96,000 median income is the highest within city limits, renters must pay nearly 13% of annual earnings to secure a new lease.

The situation, concludes the report, “does not benefit the rental market as a whole,” and begs for more policies to be enacted to make the market more transparent and manage renters’ “financial obligations to landlords.”

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