- According to new research from StreetEasy, the COVID-19 pandemic had the greatest impact in neighboring neighborhoods that have already experienced the largest rent burden.
- In neighborhoods that saw the most COVID-19 cases in 2020, rental rates have grown 22% over the past six years. In regions with the fewest cases of COVID-19, rental prices have risen by only 10% over the last six years.
- The areas most affected by the pandemic, including Elmhurst, Corona and Jackson Heights, have more overcrowding and see more evictions than other areas, according to NYU’s Furman Center. They are also home to more immigrants, black and Hispanic New Yorkers, and those with lower incomes.
- In contrast, NYC neighborhoods least affected by COVID-19 were Manhattan areas such as the West Village and Battery Park City, with higher but slower-growing rents.
- Since this spring, the difference in rent rate growth between neighborhoods with relatively many and relatively few COVID-19 cases has only grown. Rents in the least affected areas fell by 1.9%, while rents in the most affected areas continued to grow slowly, by 0.3%.
- StreetEasy will host a virtual event, “Treatment of Liveability during COVID-19,” on Tuesday, Sept. 15, at 2 p.m. EST to discuss these findings and the different effects of COVID-19 across the city. Register now to attend.
As the pace of new COVID-19 cases has slowed in New York City, mitigation of the city’s high rents has come to some neighborhoods – but not to many others.
A new analysis of StreetEasy’s citywide rent finds that the neighborhoods at the epicenter of the virus outbreak also had some of the biggest effects of New York City’s housing crisis. And they still support it.
Our data reveal that in the six years before COVID-19, rents in the most affected areas of the pandemic have grown twice as much as rents across the city. Since this spring, rental prices in these regions have continued to rise – while those in the neighborhoods least affected by COVID-19 have begun to decline.
The neighborhoods hardest hit by the COVID-19 pandemic are suburban areas far from Manhattan, such as Elmhurst, Corona and Jackson Heights. Meanwhile, the neighborhoods least affected by COVID-19 are some of the most expensive in Manhattan, such as Battery Park City and West Village.
In the neighborhoods that have escaped the worst effects of the pandemic, historically high rents have begun to decline, and vacancy rates are rising. However, in the neighborhoods where COVID-19 was most strongly felt, the opposite is true.
Rents grew twice as fast in Areas COVID-19 Strongest
Between July 2014 and July 2020, rents in the zip codes, which would be most affected by COVID-19, grew by 22%. That’s twice the city’s overall rate, where rents have grown 11%. In what would appear to be cheap postal codes COVID-19, rents grew by 10% in the same period.
Many factors play a role here. First, the median rent in the areas hardest hit by COVID-19 was $ 1,760, compared to $ 3,475 for the least affected areas. As we have shown in ours 2018 report on rent, rents in neighborhoods with lower average prices tend to grow faster than those in more expensive neighborhoods.
However, there are many factors that make this growing rent more than a number game. According to research by the NYU Furman Center for Real Estate and Urban Policy, the hardest-hit neighborhoods have lower population density, more limited housing, higher rates of overcrowding, higher rates of tenants experiencing moderate and severe rent, and higher eviction taxes.
Overcrowding is one consequence of the crisis of income affordability, and a factor that exacerbates the cases of coronavirus cases. In fact, the Furman Center found that the busiest neighborhoods – neighborhoods with an average of 1.5 or more people per room per home – had the highest rates of COVID-19 cases in New York City.
The Cost of Moving and the Affordable Crisis Leaded to Overcrowding
In the years before the pandemic, New York City experienced the longest and largest job since the end of World War II. Rapid population growth has led to more competition for affordable rents among limited stock of homes. As a result, household sizes increased: the lower the household income, the more severe the overcrowding. Leading to the pandemic, rents have reached record highs across the city after steady growth, year after year, for a decade.
“Our research has shown that the number of people per square mile is more related to the spread of the pandemic, but the number of people per room,” says Charles McNally, director of foreign affairs at NYU’s Furman Center. National research has since maintained that sustained time in indoor, crowded spaces is the most common way COVID-19 spreads.
The costs of relocation – security depots, furniture, furniture – make it more difficult for residents who are already rented to relocate to a more affordable neighborhood as rents rise. In contrast, tenants in wealthier neighborhoods are more likely to leave their neighborhoods after their leases expire and relocate to a more affordable area.
Moreover, the neighborhoods most affected by COVID-19 are home to large populations of recent immigrants, higher shares of black or Hispanic residents, and New Yorkers earn less average income than less affected neighborhoods. “There are informal networks that are important to people (recent immigrants) to adapt to life in a new country, and these networks tend to keep people in the neighborhoods where they first relocate,” McNally says.
The Different Effects of COVID-19, Rents and Unemployment
Since COVID-19 hit the city, the gap in rent growth between the more and less affected neighborhoods has even widened. Between February and July 2020, rents in the postal codes most affected by COVID-19 continued to grow slowly, by 0.3%, while rents in low COVID zippers fell by 1.9%.
The neighborhoods least affected by COVID-19, such as the Financial District and Downtown, experienced some relief as people left Manhattan elsewhere, leading to high vacancy rates and lower rents. Rental inventory in July 2020 increased by 65% in Manhattan, the biggest year-over-year jump since StreetEasy began tracking this figure in 2010. More inventory on the market as New Yorkers flee the city means lower rents for those who remain. But while price drops are generally good news for tenants, those hoping to find a good deal in Manhattan probably don’t have the highest risk of housing insecurity.
In neighborhoods with the highest rates of COVID-19 cases, residents bear a disproportionate burden of both rising rents and unemployment. In July 2020, New York had unemployment rate of 19.9%. However, the neighborhoods most affected by COVID-19 are also those most tenants who work in professions most vulnerable to job loss, such as hospitality and services. The job losses resulting from the pandemic only made it more difficult to pay for living costs.
“It’s a Manhattan-centered story and‘ rest of the townships, ’” says Barika Williams, director of the Association for Neighborhood and Housing (ANHD).
Unemployment is likely to remain high as long as the coronary pandemic remains a threat to public health. Few trips and the risk of large gatherings will continue to affect many New Yorkers who work in service and hospitality jobs.
Where are we going from here?
In September, the Centers for Disease Control announced a national ban on evictions for tenants who lost income due to COVID-19. This move will be key to preventing tenants from losing their homes in the midst of a pandemic, as well as preventing more overcrowding.
Without federal funding for the missed payments, however, the eviction moratorium still does not know who will bear the burden of the missed rent when the time comes to pay. According to Williams, there is no way to recovery without future lull aid or assistance, whether that is lull cancellation or income subsidies. “We’re talking about people in the community who don’t have more than $ 400 to cover an unexpected cost,” Williams says.
One of the most decisive and protective programs to date has been the enhanced unemployment benefits provided by the CARES Act, which expired in July. The CARES Act nearly replaced the lost employment income for households that were able to benefit from this federal aid. “Without this extra $ 600 a week in aid, we’re likely to see devastating consequences, especially for renters with lower incomes,” says McNally.
At present New York has entered Phase 4, its last phase of reopening, and the pace of new cases in New York has flattened. But the dissimilar effects across the city of both COVID-19 and the crisis of rentability reveal a story of two cities, with persistent inequalities that will last much longer than the pandemic.
To discuss this report and learn more about StreetEasy research, attend “Dealing with Habitat during COVID-19,” a virtual event with economist and report writer Nancy Wu in conversation with Charles McNally of the Furman Center and housing advocate Barika Williams. The talk will take place from 3pm to 3pm at 1pm. Register now to attend.
How We Did It
Data came from the NYC Department of Health data on coronavirus cases by zip code and rentals at StreetEasy.
This analysis utilizes more than a million listings at StreetEasy. We used an advanced statistical process that is based on the methodology behind the Street Rate of Rent Location, adapted for zip codes in the city that were more and less affected by COVID-19. The rental rates are monthly rates that track changes in rent for all residential types in New York City on the market, not including public or subsidized housing. These customized Income Indices give an angle on rent growth, which is not captured by looking at market medians, and less susceptible to bias by the types of units available in a given time frame. Each index uses a repeat rate.
The custom rental index is indexed to July 2014 = 100. For example, an increase to 115 in 2015 means a 15% increase in rents since July 2014. The rates are divided between zip codes with the highest versus the lowest rate of coronavirus cases per 1 million of people. We defined the truncated zip codes as the upper and lower zip codes with the highest and lowest case frequency with the population denominator adding respectively to 1 million people.