One of New York’s biggest housing groups has accused the federal government of being “asleep at the switch” as thousands of tenants flee the city.
The Community Housing Improvement Program (CHIP) says skyrocketing vacancies and unpaid rent is hurting both owners and occupiers.
“New York City housing is infected with COVID with no vaccine in sight. After more than four months of depressed rent collections, housing providers are now facing a grim long term prospect as people flee the city,” said Jay Martin, Executive Director of the Community Housing Improvement Program (CHIP).
“Tens of thousands of New Yorkers are still struggling to pay their rent. They are crying out for help and federal lawmakers have been asleep at the switch,” said Martin. “The lack of action on robust relief for renters will likely cost hundreds of small property owners their livelihoods and thousands of renters their homes.”
CHIP, which represents the owners of 400,000 rent stabilized apartments, said its most recent membership survey found that residential vacancy rates have tripled since February.
According to survey responses, the vacancy rate now stands at 10.78 percent, up from 3.38 percent in February, for our members.
Although more pronounced at the high end of the market, CHIP found that the vacancy rate for apartments with rents below $2000 a month has more than doubled, coming in at 7.08 percent in August, up from 3.06 percent in February.
“This indicates that even some of the city’s entry level apartments are not being rented anymore,” said the group in a statement. “CHIP members report that they are significantly cutting rents and offering multiple months of free rent, and are still struggling to attract tenants.”
The survey found that 17.23 percent of CHIP members tenant haven’t paid their August rent, a number that has held steady for the past few months.
The majority of CHIP members have first floor retail space that subsidizes their rent-stabilized apartments above.
The survey found that roughly half (49.48 percent) of commercial tenants have paid no rent in August and most landlords have set up payment plans or other deals with restaurants and retail stores.
The survey was conducted between August 13 and August 18. The sample size includes the owners and operators of a little more than 80,000 units of housing, the majority of which are pre-1947 rent stabilized buildings.
Commenting on the state of the sector, most CHIP members expressed dire concern for the growing number of vacancies in the city.
“For the first time in 40 years, we have a tremendous oversupply in housing as families are fleeing the city,” said one survey respondent.
“Vacancy rates are killing our business. It’s not even pricing – there is a frightening dearth of demand,” said another.
Landlords also fear the pandemic is the death knell for small mom and pop commercial tenants.
“They need assistance similar to the rent relief program, as we desperately need these businesses to exist for our neighborhoods,” said a CHIP member who took part in the survey.
The city’s market rate market isn’t faring much better.
According to listings website, RentHop, demand has plunged across Manhattan while the outer boroughs have been picking up some of the slack.
Median one-bedroom rent fell five percent year-over-year in Manhattan, with neighborhoods like Tribeca, Chelsea and Murray Hill hit hardest.
“The weak demand will likely continue as the pandemic remains a threat and companies extend their remote-working policies,” predicts Renthop.