The Rent Debate in NYC

April 26, 2023

THE BIG SPLASH

The Rent Debate in NYC

New York City residents already struggling with the high cost of living in the city may face another blow as a panel that regulates rent-stabilized apartments discussed potential rent increases of up to 15.75 percent on two-year leases, the highest figure in almost two decades.

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  • The Rent Guidelines Board, which sets the percentage by which landlords of rent-stabilized apartments can raise rent, released preliminary estimates that consider factors such as landlord costs and affordability.

  • However, history suggests that the final figures will likely be lower than the initial estimates.

  • Tenant advocates have called for rent decreases, citing the pandemic's impact on low-income New Yorkers.

  • On the other hand, landlords argue that any increase should be at least in the upper range of the figures discussed to cover rising costs.

  • The board is expected to take a preliminary vote on proposed increases in May, and further meetings will be held in the coming weeks to determine the final figures.

A SCOOP OF IDEAS

How Three Investors Transformed an Abandoned High School

Imagine buying an abandoned high school for just $100,000 and turning it into a trendy apartment building worth $3.3 million. That's exactly what real estate agent Jesse Wig, along with investors Adam Colucci and Dan Spanovich, did in Homestead, Pennsylvania.

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  • The trio saw potential in the abandoned Bowtie High, but the renovation journey was not without challenges.

  • They secured a $2 million mortgage and put in $1.3 million of their own money to bring the historic building back to life. Renovating an old school also meant navigating historical preservation requirements, but the partners went the extra mile by reusing original materials.

  • Leasing started before renovations were even complete, and within six months, the building was fully occupied. Now, the team is reinvesting profits into another abandoned school across the street, with plans for 33 more apartments and modern amenities.

  • Despite the challenges, Wig, Colucci, and Spanovich are committed to revitalizing the area and creating unique living spaces for their community. Renovations are expected to be completed in July 2023, and the adventure continues

A SCOOP OF MARKET DATA

Home Prices Rise in February After 7 Months of Declines

In a surprising turn of events, U.S. home prices rose in February, breaking a seven-month streak of declines, according to two separate housing indexes.

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  • The S&P CoreLogic Case-Shiller U.S. National Home Price Index increased by 0.2% compared to the previous month, while the Federal Housing Finance Agency (FHFA) reported a 0.5% rise in home prices from the previous month in their seasonally adjusted monthly house price index.

  • The unexpected increase was attributed to a decline in mortgage rates and historically low housing inventory, with mortgage rates dropping more than half a percentage point since the peak in November.

  • However, on a yearly basis, home price growth continued to slow down, with housing values up 2.0% in February, lower than the 3.7% gain recorded in January.

  • The report's 20-City Composite index also showed improvement in most cities' results in February compared to January, with Miami, Tampa, and Atlanta seeing the largest year-over-year gains at 10.8%, 7.7%, and 6.6% respectively.

A SCOOP OF GEN Z

How Gen Z is Defying Housing Market Trends

Redfin reveals that Gen Z, the youngest generation of homebuyers, is outpacing their parents' generation when it comes to homeownership.

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  • Unlike Millennials, who faced challenges during the Great Recession, Gen Z has been able to enter the housing market at a younger age due to factors such as stimulus checks, student loan pauses, and a tight labor market.

  • However, while Gen Z is buying homes in more affordable areas, their lower incomes mean they may be spending a larger portion of their income on monthly payments compared to previous generations.

  • The report also discusses potential headwinds in the housing market, including the recent decrease in home prices and the upcoming changes in mortgage fees set to take effect on May 1st.

  • Overall, while Gen Z is making strides in homeownership, challenges still remain for young adults in the housing market.

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