Rent has increased 2.5% throughout NYC since the COVID-19 pandemic. That trend, combined with the Rent Guidelines Board -- the panel which regulates rent for almost one million rent-stabilized apartments -- "voted...to support the largest increases in almost a decade," The New York Times reported, means that the rent rates throughout NYC will continue to rise.

The perfect storm of property prices increasing, construction costs skyrocketing and high demand for homes has pushed prices higher and higher, with some tenants wondering how the rates could have gotten so high.

Because of the pandemic, many people have lost their jobs or been forced to take pay cuts, making it difficult to keep up with rent payments. The rent increases are putting tremendous strain on residents of NYC. Tenants are looking for new homes because they can no longer afford the rent where they currently live.

At the same time, landlords are also struggling, as they are not receiving rent payments from their tenants. Those increases are needed, the landlords explain,  so they can continue to maintain the buildings.

With "the price of construction materials jump(ing) nearly 20% in 2021," according to SupplyChainDive, the repairs, and maintenance that every building need cost much more, than even a few years ago.

In the New York Times article, a landlord recounted that he needed the facade of a building repaired and that "a recent fix costing about $19,000 — up from $15,000 four years ago, when labor and materials were cheaper."

At the same time, many tenants are facing financial hardship having lost jobs during the pandemic and struggling to replace their income. One tenant in the New York Times article shared that she owes $10,000 in back rent and has depleted most of her savings as she tries to find work and pay some of the rent that is due.

With landlords and tenants both looking for a way forward, the Mayor of New York City, Eric Adams, proposed in the New York Times article "if rents and the other costs of living are going to go up with inflation and other economic issues, then so too must government support, which is why I have been fighting for a more generous housing voucher program, a more robust earned income tax credit and significant investments in child care.”

The New York City Comptroller Brad Lander released a newsletter recently where he outlined “NYC’s hospitality and tourism sectors are bouncing back with Broadway ticket sales, hotel occupancy, and airport volumes at or exceeding 90% of pre-pandemic levels. Office occupancy, however, remains well below pre-pandemic levels, with a number of indicators pointing to a more permanent shift to remote and hybrid work schedules in office sectors.”

That empty office space should lend itself to a popular idea that has been floated and has seen wide success in the FiDi neighborhood – transforming empty office spaces into housing. The zoning changes and construction that would be needed to accomplish this would give a fantastic new life to empty or underutilized commercial buildings throughout New York City. The financial investments that developrers and building owners would need to make in order to do this could be offset by city, state or even federal subsidies. Without the government as a partner in this project, the work needed to change office spaces into homes could be too financially cumbersome in the current climate to see it take place.

The advantages of retrofitting unused commercial spaces into homes would be a great way to reenergize New York City while offer more housing options. We’re looking forward to seeing what the Adam’s administration offers to enhance New York City’s vibrancy and create innovative ways for landlords, developers and the government to work together to achieve shared goals.