Merry Christmas everyone! here is some good news on housing:
Rents got cheaper in several major cities this past year, thanks to an influx of luxury apartment buildings opening their doors and luring tenants to vacate their old homes.
New building openings are bringing rents down as wealthy tenants trade up, forcing landlords to drop prices for older apartments. Rents for older units have fallen as much as 11%, and some are now on offer at rates as low as homes that are usually designated as “affordable” and come with restrictions including rent control and rent stabilization.
The changed dynamic in the rental market is challenging the idea that luxury housing doesn’t help the broader ecosystem.
“More supply is the answer to housing affordability. I think people don’t believe that,” added Géno, of the NMHC.
To be sure, relying on luxury developments to address the housing crisis isn’t a long-term solution — with developers already pulling back on plans for new buildings in places where rents have fallen the most. The number of new apartments opening for rent across the country is expected to drop by half next year from its mid-2024 peak.
I do think the devil is in the numbers.
From the article, rents start to go down when Austin added 10,000 units in one year, Phoenix added 8,000 units and Denver 5,000 units. For a city the size of NYC, we are probably talking about 100,000 units in a year or something (which I don't think it's realistic without serious policy changes).
LOOSEN REGULATIONS AND BS RULES
That won’t prevent the NIMBYS, some places build a lot of housing, I’m looking at you Coney Island, Far Rock, some places build almost none. I’m looking at you Red Hook.
Loosening the power residents have over an area sounds like it's a part of loosening regulations in general.
Of course it’s not realistic.
The City needs like 100,000 new units a year for the next ten years to meaningfully drive down prices.
You can deregulate all you want, it’s not going to happen.
We're all out of ideas and we've tried nothing.
We can also expand out public transit and improve the bus system, updated zoning to be more flexible all while encouraging new housing (that one law that increases pay for contractors over 99 stories hard stifles building height). For example in popular parts of Bushwick, you cannot build new units but you can convert a building to residential. These areas should be zoned for new building as well since they're clearly livable.
Housing isn't a one trick fix all. In a large city like nyc that already has very high density, you need to tackle it from several angles.
Also, I don't think we're as far away as the numbers lead us to believe. With a mild pilgrimage out of nyc during covid we saw dramatic rental reductions.
There’s been serious policy change.
Or massive eminent domain and the city developing every inch of land
Where you gonna get the money for eminent domain, it's not a magic formula. And can't claim it on everything.
That’s the point, a lot of the land that would be required for 100,000 units would require eminent domain. Even decking over sunnyside yard would only produce 12k apartments and that’s the biggest open plot of land in NYC as a whole, that can be developed.
The city would still need to pay for the land if they use eminent domain
What about cemeteries
Not sure if you can eminent domain wide section so of the city on behalf of private developers. If the government did it and built the housing expect it to cost seven figure per unit, and most of the cost subsidized by taxpayers so that someone who is at 70% median income can live there.
You people cannot be serious.
It's always been supply and demand.
Except adding 20 luxury apartments to the market isn’t going to have the same effect as adding 200 apartments.
Luxury is a marketing term applied to all new apartments. It basically just means the apartment has new kitchen appliances and maybe a dishwasher and washer/dryer.
From an architectural or construction standpoint try to define what a “non-luxury” new apartment would be.
Isn't a walkup non-luxury?
New walkups are rare nationwide due to modern fire code regulations usually requiring two stairwells and ADA laws requiring an elevator.
Do you know of new walkups built from the ground up in NYC that were not marketed as “luxury?”
Fire code regulations is why the “5 over 1” style condos are the default construction style for anything that’s not being built significantly taller than that.
Maybe, but is using valuable space to build new walkups scalable?
I bet you that current building code would not allow anyone to build a multi unit walk up (at a reasonable cost)
Except for single/two family homes you are correct
When’s the last time you saw a new walk up? Fairly certain ADA accessibility is a requirement in new construction. It doesn’t mean the construction is quality. I lived in a “luxury” building where there was a weight room, but the weights rattled the entire building 3 stories up. The windows were pretty and big, but you could hear what episode of House your neighbor was watching. It’s up to code. It’s not luxurious
Are elevators a luxury?
Luxury is used for pretty much all new rental development at this point. I’m fairly certain all new builds will come with this term.
"Luxury" means no cockroaches. And minimal rats.
people on this sub will talk abt "luxury" apartments and then point to minimalist millennial grey shoeboxes with wood pulp mdf cardboard ikea furniture as examples. until these new constructions outside of billionaire's row are being furnished with persian rugs and pianos made from elephant ivory people need to give this "luxury" talk a rest. same people wont be satisfied until developers personally add roaches in the crawlspace and get the furniture from fb marketplace.
this is luxury
Not enough gray.
If you say so
What did you think new buildings were going to market themselves as — Plain Apartments?
"New Dumpster Fire Apartments for Sale! Call 212.EAT.SHIT for More Details!"
Average NYC apartment ad in the 70s
Yes, they could market themselves as Budget Apartments or Economy Apartments or whatever. But luxury branding is more profitable.
Oh it’s the b r a n d i n g that makes them expensive. So why are similarly branded apartments priced so differently across the country in their respective housing markets?
Are you really asking why apartments are priced differently in different markets across the country? Seriously?
You’re the one who said “branding” is all one needs to set prices lower or higher!
I said that branding enables them to raise the price, and you responded by asking why prices vary in different cities.
You need to work on your logic skills.
"luxury" just means new construction
Yes, that is also part of supply and demand.
That’s supply and demand
It does. New “luxury” housing absorbs the entry of wealthier people. Otherwise, they take the existing stock.
Sure. The most important metric is the quantity of units, not the type of units.
The formula for rent increases is basically:
Rent Delta = (available zoned capacity)x(equilibrium vacancy rate- actual local vacancy rate)
You then add the change in insurance and energy costs to this. This only breaks down when the median rent hits 45% of the AMI, which then results in the rent increase becoming bound to wage increases (which is currently is now in NYC)
That’s my point.
Too bad the city council doesn't understand economics
Maybe we should get some economics degrees up there instead of poly sci leading the way.
They don't pay well enough for them. The economics people all work in finance or tech.
Economics is poly sci in a math colored trenchcoat
They do, they just don't care because a significant amount of members represent groups of people who don't want home values to decline
No many don't. Which is why they think rent stabilization is the solution.
They do, we just don’t live in Sim City and the actual economics in practice are far more complex than just plop a million new units somewhere out of thin air.
I hate to break it to you, but you’ll get all the deregulation you want and they still won’t be able to build enough units quickly enough to meaningfully drive down prices for most people.
This is New York City, not New Mexico.
Yea because of all the other policies we have. Long eviction processes, rent stabilization, voucher programs etc. nyc rental market is not normal
It’s always been supply and demand
Make it harder to build benefits current owners
Make it easier to build benefits current renters
Make it really easy to build benefits majority except the current building owners
Removing or increasing all zoning, majority of electrical and plumbing requirements are more expensive than cities like Tokyo or Zurich, removing parking minimums and reducing environmental impact regulation would help nyc more than anything to make it more affordable with minimum sacrifice to safety
When in doubt just match the regulations with a city that currently builds effectively
Breaking news! When you increase housing stock, rent goes down.
Every apartment is priced like it’s a luxury apartment
They added a 300 dollar dishwasher 15 years ago. Don’t you feel the luxury?
Mine kept the crackhead from pissing in the lobby. Now they piss on the wall outside.
This article literally discusses how adding more of those pushes rent down below it lol
Because demand to live in NYC is so high
Build baby build. It’s the only thing that will bring rents down. This is so simple I don’t know why we can’t figure it out.
People dunk on “luxury” but what’s not being said in the Mamdani new housing plan https://www.zohranfornyc.com/policies/housing-by-and-for-new-york is that all these new builds would qualify as “luxury” if they were contemplated by the private market instead of the government.
Luxury builds are just new builds in a city desperately lacking it, and increasing supply of them would certainly bring down prices.
I mean, it’s not like anyone thinks you get 200k new brownstones, right? And certainly no one wants 200k new tenements?
It’s worth mentioning that most people would prefer regular, market rate housing rather than applying through a city lottery for an “affordable” unit in an all rental building. Which is basically the only housing category the city seems to want to build
🤣👍
Another thing that would also lower rents is getting rid of rent stabilization. However, that is a conversation that most people are not ready to have/accept, regardless of the facts.
As a society we must prioritize those who called dibs first.
Numerous studies done over years have shown same conclusion; ending RS would largely only have an effect in Manhattan. Even then we're largely talking about south of 125th street.
In outer boroughs legal rent for good part of RS units is actually *higher* than market. This is or was one reason why so many RS units out there had preferential rents.
Ending RS would provide incentive for LLs to fix up and rent the thousands of units currently being kept off market (warehoused), again which would have huge effect in Manhattan were good number of those units happen to be.
Personally know of about five or ten apartments in UES/Yorkville where previous tenant died two, three, four or more years ago but units have sat empty ever since. These are RS units were deceased was a lifer tenant who likely lived in unit for 50 or more years. Thus, legal RS rent is probably below to way below current UES market rate.
But you can raise the rent to max allowed once a tenant dies/leaves. Of course, sometimes it gets passed on to children that don't even live here but keep it because it's so cheap.
The big brained democratic socialists of america will tell you all luxury housing is gentrification and will drive rents up further.
They will do so without realizing that those apartments rent for 1400$ in places like Charlotte, Houston, Dallas or Atlanta.
The key is to build. Make it easy to build, then housing becomes affordable. Tokyo does not have any kind of affordability problem despite having population greater than New York. Two people earning minimum wage in six of the wards can rent without being rent burdened.
https://www.nytimes.com/2023/09/11/opinion/editorials/tokyo-housing.html
Get out of here with that, false equivalence.
Landlords in Tokyo cannot raise the rent without stated good reason AND the tenant agreeing to it on the majority of leases. And tenants rights in Tokyo are stronger than NYC market rate leases. You have no idea what you're talking about or are just trying a bamboozle.
Yes I am sure you with your deep thoughts no better than RAND corporation and economists who have studied this issue. That is why you are in expert whose opinion people care about.
“you are in expert”
yes people make typos on the internet. I also wrote Know as no. Care to point that out?
You talk like tarzan regardless of your typos lol
Just to make things clear: https://housekey.jp/when-can-you-raise-tenant-rent-in-japan/
Tokyo's housing laws are heavily influenced by Japanese culture. Cannot simply say such laws would work elsewhere in world were things are seen differently.
If you knew anything about Japanese economic history, which you don't, you would know that one Japan had significant price appreciation all the way through the 1990s when its real estate and asset bubble collapsed.
You are also assuming landlords do not raise rents when ever there is a vancancy. Tokyo has no rent stabilization. Even in NYC the average rent increase for a current tenant is about inflation.
Again big brained redditors know better. Never mind that housing cost is falling in most other major U.S. in 2025, mean while New York had a 6 percent increase. Because of course you and your friends in bushwick know better than economist, urban policy professors and just about everyone else.
Shocker, building housing makes rents fall
Am I out of touch? No it's the YIMBYs who are wrong.
Funny how rents drop when unemployment climbs.
They said in early 08 that it was due to housing supply too. As people lose jobs and move/downsize rents go down.
Anything to gaslight the economy as usual.
I mean you're mostly right, it's the balance of supply vs demand. If unemployment skyrockets than demand will go down.
But we don't want demand to fall, as that almost exclusively means something bad has happened. So increasing supply is the solution.
Another example is the massive drop in rent during COVID. Supply didn't change, but the demand to live in NYC plummeted due to COVID rules.
Demand dropping doesn’t have to be a bad thing. Demand decreases as transit further out improves too.
But this is just a conservative article arguing Trump economic policy works.
Nah, you can't dismiss the YIMBY movement by trying to call it "Trump policy". Even if Trump did support it, that doesn't make it necessarily wrong. Broken clock and all that. Trump pushed COVID vaccines, but that didn't make me an anti-vaxxer.
But either way, this isn't Trump policy. The best example is Austin. Their city council that voted for changes to allow more housing weren't MAGA. NYC recently had a primary where many democratic candidates were yimby. It's not because they like Trump.
Building more is the evidence-based primary solution to the housing crisis. There's room for some things like public housing, for people who wouldn't be able to pay for even affordable homes. But the main solution that will help the most people is building more.
In theory that could be true, but it isn't the current reality. This would rely on significant unused housing stock sitting around that we just need to build transit to. That's obviously not the present situation.
New transit can be a help for sure, but we also need to build more densely around areas that transit goes. Have to do both.
Austin has lower rents because so many jobs left after all the disfunction with the Tx electrical grid and RTO pulling people back to CA or losing their jobs.
Regionally it’s been in a recession since 2023 at the latest.
Which proves my point: you’re trying to make a recession sound like a good thing.
You're just hypothesizing alternative explanations with no data, and ignoring the overwhelming amount of evidence here. It's not just Austin. Look at the graph in this very article comparing many cities. See the obvious correlation.
And note that cities in recession don't normally build a ton of housing.
Again, this has been studied to death. Many papers examining data from many cities. It's just the basic law of supply and demand playing out in the housing market. For some reason a chunk of people really want to believe housing is somehow different and doesn't work the same as everything else. But it isn't, and people have proven that repeatedly.
Building more housing will always lower housing costs.
Actually there’s a concept of “induced demand” that suggest housing prices increase when enough is built because it brings more buyers to the market. That was actually a housing term before people applied the concept to roads. I remember reading that in my economics textbook in college.
It’s also what banks account for when deciding to finance a project as the value of the property depends on the future market value.
You’re conveniently ignoring that whole part.
Banks aren’t in the business of losing money, if they’re factoring that in, it’s a sound economic pattern.
You've got several arguments here so let's go through them.
Induced demand is just supply and demand. Supply increases, that causes prices to fall (or for traffic, travel time) which causes demand to rise. Things rebalance at a new equilibrium point with a lower price. That's fine. It's in fact better if more people can live in the city they want to for a lower price.
Second, you're hinting at the idea that new housing will actually increase prices. Usually due to making the area nicer. A common myth/misunderstanding. I'll just drop this article: We show that new buildings absorb many high-income households and increase the local housing stock substantially. If buildings improve nearby amenities, the effect is not large enough to increase rents.
Third, the idea that "why would they build more if rent would go down.". This misunderstanding is easily cleared up with an analogy: why would Wendy's open up a restaurant next to McDonald's if it means McDonald's will lose money? Because they aren't the same people, of course.
If rents are high, people will build to profit from it, increasing supply. There's not one bank, one developer, one landlord for a city. Incumbent landlords do indeed love to block new housing to limit competition and allow them to charge more. But other people want to compete and take a portion of their absurd profit.
So you regularly post on specific political topics like a lobbyist rather than a human.
And you’re not even responding directly to what I said, you’re using AI generated answers that are indirect. That’s a strategy used in the 2020 republican campaign for all federal offices to put parallel statements alongside responses knowing humans will sometimes conflate emotions regardless of context to get the intended response. Nice try, but some of us know what to look for.
And if you look at the budget of a building, it’s clear margins are low, it’s just a volume business for the past 20 years, hence all the market consolidation. So again, you’re making up things.
It's pretty simple, yet you have people arguing against the most logical and proven solution. Build more
Those who say it's not possible are the people who think Mamdani will get us a $30/hr, raise taxes on high earners and make busses/childcare free. They're more than happy to indulge in hard to do ideas when it fits their belief system.
They just can't fathom something that helps develops and real estate types regardless because they've been taught that anyone is real estate is bad and helping them is always bad. Meanwhile, making their lives harder also makes building the amount of housing we need nearly impossible
It's just dumb but we seem destined to repeat the same mistakes
"To be sure, relying on luxury developments to address the housing crisis isn’t a long-term solution — with developers already pulling back on plans for new buildings in places where rents have fallen the most. The number of new apartments opening for rent across the country is expected to drop by half next year from its mid-2024 peak."
This is what people need to know and understand.
At some point if housing prices (rent or sales price) drops too low developers will pull back and and or sources of funding (private market) will do so as well.
The pricing is just bad since people are trying to sell their condos bought during covid with low interest rate. I bought a luxury condo in Brooklyn but not to to live in luxury or anything. I bought it because every other condo in the neighborhood that wasn't a luxury condo was priced at roughly the same as the luxury condo with roughly 85%~ the price tag BUT with 2-3x the hoa and 1/3rd the amenities. The the condo across the street from mine cost 66% the price but the hoa was 4x the amount and literally didn't have a single amenity.
This is a combination of cherry picking ("some cities") and improperly inferring causation from correlation (the housing market is softening overall in many cities).
The propaganda to deregulate the real estate market is ramping up. Regulations are written in blood, folks. Don't vote to repeal them, nor to give handouts to developers.
Just mindlessly being for all regulations (or against all regulations) is dumb.
There are good regulations we should leave. There are well-intentioned regulations that we now know are flawed. There are bad regulations intentionally created to benefit a few despite harm to the city.
Lets take a real easy example: there should be no required parking anywhere in NYC. That's a dumb regulation that makes housing more expensive, and transfers money from car free people to car owners (who, on average, make way more money).
NYC has plenty of dumb regulations we need to reform. Don't believe that our current laws are perfect, that is obviously not true.
The headline sounds suspiciously like it's PR for all these multimillion-dollar investment units that do nothing for NYC.
Wow, I was wondering why housing was so affordable lately. It seems like everywhere I go people are remarking how amazing this turn of events has been, with non-luxury housing dropping in price! I guess I need to read the Journal of Trickle Down Economic BS more often because free markets are always right, reality is not to be believed, just eat their propaganda and let them run the world they want to and shut up!
I mean the numbers are in the article. Austin built like crazy, rents went down.
NYC didn’t.
But by all means keep regurgitating anti-intellectual populist nonsense.
Supply and demand isn't "trickle down economics".
Don't talk about ignoring reality if you're going to deny that the housing crisis is fundamentally a housing shortage.
The cities quoted are IMO not quite the same as a market like NYC where investment buying accounts for a significant chunk of the luxury market and there is a long-term supply backlog that'll take much longer to alleviate. But, yes, increased supply does generally result in lower prices, eventually.
Places like Austin and Tampa used to have reasonable rents. It was the pandemic-related demand that made them shoot up, so now they're coming back to the long-term average (and they'll probably overshoot it). NYC has always been expensive because it's always had a supply/demand mismatch due to its relative popularity.
Trickle down housing…again????
🤣🤣🤣
An increase in supply lowers price. Simple as that.
This is tangential to trickle down economics.
What if, hear me out, you build new housing and people from out of town (recent grads, job transplants, foreigners of all stripes) occupy that new housing and none of the incumbent residents have the chance to move because there are no empty apartments to move because no one is “moving up” to the luxury apartments so the occupancy rate stays the same because demand for housing from outsiders is so great? Wouldn’t happen, would it?
"people from out of town" will want to move here anyway. Whoever is willing to pay more for the same apartment will get it, whether they already live here, don't live here yet, have some imaginary birthright to living in NYC because they were born here but grew up in Omaha, whatever. So, do you want fewer apartments so that we can continue pricing out everyone with less money?
🤣🤣🤣
trickle down housing works since hoarding homes is a lot more work than hoarding money
And yet they persevere https://jacobin.com/2024/05/single-family-homes-rentals-wall-street
Get a job.
🤭🤭🤭
Shhh you'll upset the Abundance bros in this thread
Lol! Yes some of them are abundance bros, I disagree with them but they come from a misguided but decent place
Others are just bots fomenting division
And then the rest are shitty high end real estate brokers, landlords, retiring wall street bros looking to invest in real estate, luxury skyscraper enthusiasts, conservatives & neoliberals. That group sucks ass
You understand that you’re taking the side of real estate investors and landlords, right?
If not, imagine you own a bunch of gold. Do you want more gold to be discovered, or less, in order for your investment to be maximally profitable?
They're being edgy, not smart
Blah blah blah. Save it for someone who cares
Shilling for landlords is a weird way to spend your free time but whatever brings you joy I guess
So you regularly post on specific political topics like a lobbyist rather than a human.
And you’re not even responding directly to what I said, you’re using AI generated answers that are indirect. That’s a strategy used in the 2020 republican campaign for all federal offices to put parallel statements alongside responses knowing humans will sometimes conflate emotions regardless of context to get the intended response.