Brooklyn Rental Market Faced with Challenges and Changes

In many places throughout the United States, the price of homes has gone up significantly over the past year, but rentals are not following the same trends.

Single-family homes are in demand, while supply has remained the same, causing prices to rise. Apartments face different challenges.

For instance, in Brooklyn’s 11201 zip code, the rent for a one-bedroom apartment went up from $2,570 in the fiscal year 2020 to $2,700 in the fiscal year 2021. Four-bedroom apartments experienced a similar increase, from $3,970 to $4,180.

Fair market values leave out luxury and non-market rental housing as well as rentals constructed within the past two years. The rates are used to help government agencies determine amounts for assistance programs such as rental vouchers.

Fair market rents are also used to forecast rates. In New York, there was a 7% vacancy rate during the first quarter of 2021, according to the Census Bureau. That was a bit more than the national figure of 6.8%.

In general, apartment rents have not grown as much as single-family homes. Many cities have only seen small rent increases, while central city luxury apartment rents have gone down. The trends for the future are that as workers go back to working in the office, central city luxury apartment rents will go back up. But if more people maintain working from home, it will be hard to predict what will happen to rent prices. Even a small upward trend in remote work could push up the demand for suburban homes.