Lower Rents Bring New Innovators to New York City
Rental price reductions and landlord incentives have lured people back to the Big Apple. Here's what it means for the city.
After a year of stress and quarantine, I decided to go to Madison Square Park, my favorite park in the city, and start writing this piece from a bench. New York is far from dead. In the background, jazz music is playing, and people are dancing in the park. People that come here to relax, exercise and work outdoors have created a wave of wonderful energy.
However, the people that live in the city are changing. As wealthy families leave for Miami or the Hamptons, new waves of entrepreneurs are flocking to New York City.
The new wave of innovators
A reduction in the prices of available New York rental apartments created an opportunity for those looking to experience life in the concrete jungle.
Many high-level income New Yorkers moved out of the city during the pandemic. Some bought homes in places such as Connecticut; others chose to relocate to warmer cities like Miami. Most I have spoken to have no interest in coming back.
In March 2020, and with the pandemic’s beginning, prices of available rental apartments in New York City experienced massive reductions. Rental studios, which usually would go for $3,200 per month, were often reduced to $2,500. Landlords began offering concessions to attract renters — sometimes up to four months free in a 16-month lease.
Lower rental prices created opportunities for those looking to innovate. Many visionaries who might not have been able to afford to live in the Big Apple before have seen price reductions as an opportunity for new ventures. And, because so many Americans were unemployed and receiving government financial assistance, they decided that now was the time to start their own business.
The good and the bad
The bad news is that the wealthiest 1% of New Yorkers might leave with more than $133 billion if they choose to leave New York permanently. Access to schooling and education is one factor that keeps the wealthy in the city. However, it's worth noting that the top 1% of wealthy New Yorkers paid over 40% of the city's income tax in 2018, and their departure might be a big blow to the city's economy.
As the CEO of a real-estate listings platform based in New York, I have witnessed a spike in the interest of the lower price points in the city. There’s been a significant increase in the number of people searching for big apartments below $3,000. In boroughs like Manhattan, opportunities like those used to be a rare find.
The good news is that people currently applying for New York rental apartments seem to be filled with youthful energy and looking to create their own businesses. A whole new wave of innovators and visionaries has arrived to the big apple, and many of us are looking forward to seeing how the city evolves with them.
After having daily conversations with real-estate professionals all around the city, I believe that a new wave of innovation has just entered the market. This wave takes the shape of what I like to refer to as “price-sensitive innovators.” They're entrepreneurs with young energy looking to make the most out of this opportunity — and they don’t seem to have moved here only to get to visit different bars.
Renting an apartment in New York has always been a complicated process compared to most other U.S. cities. In New York, landlords often require substantial documents to ensure their tenants can financially support themselves in that unit. Because of that, the new wave of renters coming into the city may be price-sensitive, but still in a good enough financial position to sign a New York standard lease.
People who meet the necessary criteria to rent in New York coupled with lower rental prices and the option to work from home have created a formula for entrepreneurs to establish their businesses in the city. With many recognizing this as an opportunity, the rental market has been on fire these past few months.
Covid-19 is not the only thing contagious in New York — smiles seem to be contagious too. New Yorkers have been very responsible for protecting themselves and others from viruses by wearing a mask. And, now that over 75% of New Yorkers have been vaccinated, I’ve noticed a new breed of New Yorkers: the price-sensitive visionaries.
As I write this in Madison Square Park, a kind young woman just reminded a bike rider not to forget his helmet on the bench before he leaves. Another strong woman is practicing her boxing skills with a trainer while many others sit on a bench with their laptops and tablets, focused on working and building their business.
This is what New York looks like today — there’s less partying and a lot more kindness, compassion and innovation. With a big smile under my mask, I can vouch that New York is very much alive — and there will be new opportunities for those who know where to look for them.
Entrepreneur Leadership Network Contributor