Manhattan Rental Market Not as Tough as They Say

You wouldn’t wish it on your worst enemy. Yet it’s something that has to be done many times a month in Manhattan: the hunt for an apartment to rent.

But the hunt’s no worse here than in L.A. or even Boston. Really.

It just seems that way because of the grim news often batted around about the Manhattan rental market, starting first and foremost with news about the market’s obscenely low vacancy rate. That rate, though, is impossible to determine.

First, no one knows how many apartments are available to rent in Manhattan at any time. The borough doesn’t have a true multiple-listings service that shares all listings and would theoretically allow every broker to work off the same leads. This is unlike the much smaller Manhattan sales market, where most listings are shared among brokerages, even without an M.L.S.

Second, no one knows how many condos or co-ops are being rented by their owners at any time. Third, tracking available subleases is very difficult as well, and not something that brokerages normally do.

Right away, then, those wishing to determine Manhattan’s rental vacancy rate are toiling in an uphill battle against incomplete data and an ever-changing market.

Some, though, are willing to undertake this fight.

Citi Habitats, Manhattan’s largest rental brokerage in terms of leasing, publishes a monthly report on the Manhattan rental market that’s often cited by the media. Since this time last year, the rental-market vacancy rate has been below 1 percent, according to Citi Habitats, settling at 0.80 percent in October, the last month for which data were available.

This low vacancy rate is trumpeted by the media soon after each report, sparking an outbreak of woe among recent college graduates, newcomers headed for Manhattan, ex-boyfriends who got the boot—just about any person trying to move to Gotham. (And people do keep coming to Manhattan: The borough’s population rose by an estimated 69,000-plus from 2000 through 2005, according to the Department of City Planning.)

Citi Habitats bases its monthly vacancy rates on an analysis of its internal listings database, which includes 50,000 to 55,000 rental apartments. The analysis includes apartments in Manhattan below Washington Heights. The borough’s northernmost neighborhoods, Inwood and Washington Heights, are not, in fact, included in the analysis, and Harlem was only added this year.

Citi Habitats’ attempt, then, like others, is a statistical best guess, only as thorough as the data—which, by the very nature of the Manhattan rental market, dangle incompletely. For instance, 50,000 to 55,000 apartments may seem like a lot for a survey (and so it is, for a rental survey), but there are at least 25,000 rental buildings in Manhattan, according to the Web research engine PropertyShark.com.

So what is the real rental vacancy rate for Manhattan?

It is low. But it’s not that low. In fact, it’s not … well, who knows what it’s not?

“I don’t think you could ever find out the true rental vacancy rate in Manhattan,” said Daniel Baum, co-founder and C.O.O. of the Real Estate Group New York brokerage, which does rentals throughout Manhattan. “Manhattan’s the only place in the country with no M.L.S. If there’s no true M.L.S., whatever properties you’re aware of are what you’re working on, and therefore you can only project vacancy rates based upon your inventory at hand.”

An executive at another major rental firm told The Lab earlier this month that any vacancy rate for Manhattan “might as well be plus or minus 10 percent.”

This rough estimate might actually make more sense than attempting pinpoint accuracy. A higher rate would place Manhattan more in line with other larger American cities. (Incidentally, the city’s normally tri-annual Housing and Vacancy Survey put the Manhattan rate at 3.8 percent at the end of 2005, nearly unchanged from 3.9 percent in 2002.)

In Los Angeles, the nation’s second-largest city, the rental vacancy rate rests around 3 percent, according to the commercial brokerage Marcus & Millichap; in Chicago, the rate’s around 6 percent. In Boston—like Manhattan, another Northeastern haven for the newly arrived young and restless—the rate’s been about 5 percent since mid-2003.

Marcus & Millichap, which doesn’t broker rentals in New York, estimates Manhattan’s vacancy rate at 2.8 percent now—nearly identical to L.A.’s.

So, if you’re on the apartment hunt in Manhattan, you have as good a chance as a Bostonian or an Angeleno to find one.

At least, that’s the best guess.